These synopses are intended only as aids to the reader in

Bulletin No. 2000–9

February 28, 2000

Internal Revenue

bulletin

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. 2000–7, page 712.

EMPLOYMENT TAX

Removal costs, capital expenditures. This ruling holds

that if the retirement and removal of a depreciable asset occurs in connection with the installation or production of a replacement asset, the costs incurred in removing the retired

asset are not required to be capitalized under section 263

or 263A of the Code as part of the cost of the replacement

asset. Rev. Proc. 99–49 modified and amplified.

Page 721.

EMPLOYEE PLANS

Rev. Proc. 2000–18, page 722.

T.D. 8873, page 713.

Final regulations under sections 402(f), 411(a)(11), and

3405(e) of the Code provide applicable standards for transmitting certain notices and consents through electronic

media and modify the timing requirements for providing certain distribution-related notices.

Notice 2000–2, page 727.

Weighted average interest rate update. Guidelines are set

forth for determining the weighted average interest rate for

February 2000 and the resulting permissible range of interest

rates used to calculate current liability for purposes of the full

funding limitation under section 412(c)(7) of the Code.

Railroad retirement; rate determination; quarterly. The

Railroad Retirement Board has determined that the rate of

tax imposed by section 3221 of the Code shall be 26 1/2

cents for the quarter beginning January 1, 2000.

ADMINISTRATIVE

Automobile owners and lessees. This procedure provides

owners and lessees of passenger automobiles (including

electric automobiles) with tables detailing the limitations on

depreciation deductions for automobiles first placed in service during calendar year 2000 and the amounts to be included in income for automobiles first leased during calendar year 2000. In addition, this revenue procedure provides

the maximum allowable value of employer-provided automobiles first made available to employees for personal use in

calendar year 2000 for which the vehicle cents-per-mile valuation rule provided under section 1.61–21(e) of the Income

Tax Regulations may be applicable.

(Continued on next page)

Actions Relating to Court Decisions is on the page following the Introduction.

Finding Lists begin on page ii.

Department of the Treasury

Internal Revenue Service

ADMINISTRATIVE—Continued

Notice 2000–12, page 727.

Pilot pre-filing agreement program. This notice announces

a pilot program for Pre-Filing Agreements (PFAs) under which

large business taxpayers may request examination and resolution of specific issues relating to tax returns they expect to file

between September and December 2000.

Notice 2000–13, page 732.

Low-income housing tax credit. Resident population figures for the states, Puerto Rico, and the insular areas (American Samoa, Guam, Northern Mariana Islands, and the U.S.

Virgin Islands) for determining the 2000 calendar year (1)

February 28, 2000

state housing credit ceiling under section 42(h) of the Code,

and (2) private activity bond volume cap under section 146,

are reproduced.

Announcement 2000–9, page 733.

This document contains a correction to Notice 2000–4

(2000–3 I.R.B. 313) in which an erroneous address was

given for comments to be submitted electronically.

Announcement 2000–10, page 733.

This announcement contains a change to the date and time

of a public hearing relating to proposed regulations

(REG–116733–98, 1999–36 I.R.B. 392) under section

355(e) of the Code. The original public hearing on January

26, 2000, has been rescheduled for March 2, 2000.

2000–9 I.R.B.

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.

2000–9 I.R.B.

February 28, 2000

Actions Relating to Court Decisions

It is the policy of the Internal Revenue

Service to announce at an early date

whether it will follow the holdings in certain cases. An Action on Decision is the

document making such an announcement.

An Action on Decision will be issued at

the discretion of the Service only on unappealed issues decided adverse to the

government. Generally, an Action on Decision is issued where its guidance would

be helpful to Service personnel working

with the same or similar issues. Unlike a

Treasury Regulation or a Revenue Ruling,

an Action on Decision is not an affirmative statement of Service position. It is not

intended to serve as public guidance and

may not be cited as precedent.

Actions on Decisions shall be relied

upon within the Service only as conclusions applying the law to the facts in the

particular case at the time the Action on

Decision was issued. Caution should be

exercised in extending the recommendation of the Action on Decision to similar

cases where the facts are different. Moreover, the recommendation in the Action

on Decision may be superseded by new

legislation, regulations, rulings, cases, or

Actions on Decisions.

Prior to 1991, the Service published ac-

quiescence or nonacquiescence only in

certain regular Tax Court opinions. The

Service has expanded its acquiescence

program to include other civil tax cases

where guidance is determined to be helpful. Accordingly, the Service now may acquiesce or nonacquiesce in the holdings

of memorandum Tax Court opinions, as

well as those of the United States District

Courts, Claims Court, and Circuit Courts

of Appeal. Regardless of the court deciding the case, the recommendation of any

Action on Decision will be published in

the Internal Revenue Bulletin.

The recommendation in every Action

on Decision will be summarized as acquiescence, acquiescence in result only,

or nonacquiescence. Both “acquiescence” and “acquiescence in result only”

mean that the Service accepts the holding

of the court in a case and that the Service

will follow it in disposing of cases with

the same controlling facts. However, “acquiescence” indicates neither approval

nor disapproval of the reasons assigned

by the court for its conclusions; whereas,

“acquiescence in result only” indicates

disagreement or concern with some or all

of those reasons. “Nonacquiescence” signifies that, although no further review

was sought, the Service does not agree

with the holding of the court and, generally, will not follow the decision in disposing of cases involving other taxpayers. In reference to an opinion of a circuit

court of appeals, a “nonacquiescence” indicates that the Service will not follow

the holding on a nationwide basis. However, the Service will recognize the

precedential impact of the opinion on

cases arising within the venue of the deciding circuit.

The Actions on Decisions published in

the weekly Internal Revenue Bulletin are

consolidated semiannually and appear in

the first Bulletin for July and the Cumulative Bulletin for the first half of the

year. A semiannual consolidation also appears in the first Bulletin for the following January and in the Cumulative Bulletin for the last half of the year.

The Commissioner NONACQUIESCES in the following decision:

Simpson v. United States,1

183 F.3d 812 (8th Cir. 1999), rev’g

17 F. Supp. 2d 972 (W.D. Mo. 1998)

1 Nonacquiescence relating to whether a transfer of property to decedent’s grandchildren, pursuant to decedent’s exercise of a general testamentary power of appointment, was exempt from the generation-skipping transfer (GST) tax under the effective date provisions in the Tax Reform Act of 1986 (TRA 86).

February 28, 2000

2000–9 I.R.B.

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

Section 61.—Gross Income

Defined

26 CFR 1.61–21: Taxation of fringe benefits.

This procedure provides the maximum value of employer-provided automobiles first made available to

employees for personal use in calendar year 2000 for

which the vehicle cents-per-mile valuation rule provided under §1.61–21(e) of the Income Tax Regulations

may be applicable. See Rev. Proc. 2000–18, page 722.

Section 162.—Trade or Business

Expenses

26 CFR 1.162–1: Business expenses.

If the retirement and removal of a depreciable asset

occurs in connection with the installation or production

of a replacement asset, are the costs incurred in removing the retired asset required to be capitalized under §

263(a) or 263A as part of the cost of the replacement

asset? See Rev. Rul. 2000–7, page 712.

Section 165.—Losses

26 CFR 1.165–3: Demolition of buildings.

If the retirement and removal of a depreciable

asset occurs in connection with the installation or

production of a replacement asset, are the costs incurred in removing the retired asset required to be

capitalized under § 263(a) or 263A as part of the

cost of the replacement asset? See Rev. Rul. 2000–7,

page 712.

Section 167.—Depreciation

26 CFR 1.167(a)–8: Retirements.

If the retirement and removal of a depreciable

asset occurs in connection with the installation or

production of a replacement asset, are the costs incurred in removing the retired asset required to be

capitalized under § 263(a) or 263A as part of the

cost of the replacement asset? See Rev. Rul. 2000–7,

page 712.

Section 263.—Capital

Expenditures

26 CFR 1.263(a)–1: Capital expenditures; in

general. (Also §§ 162, 165, 167, 263A; 1.165–3,

1.167(a)–8, 1.167(a)–11, 1.263A–1)

Removal costs, capital expenditures.

This ruling holds that if the retirement and

removal of a depreciable asset occurs in

connection with the installation or pro-

February 28, 2000

duction of a replacement asset, the costs

incurred in removing the retired asset are

not required to be capitalized under section 263 or 263A of the Code as part of

the cost of the replacement asset.

Rev. Rul. 2000–7

ISSUE

If the retirement and removal of a depreciable asset occurs in connection with

the installation or production of a replacement asset, are the costs incurred in removing the retired asset required to be

capitalized under section 263(a) or 263A

as part of the cost of the replacement

asset?

FACTS

The assets of X, a telephone company,

include telephone poles A and B. X

placed Pole A in service in 1979 on land it

owned. X placed Pole B in service in

1982 on land owned by Y under the terms

of an easement permitting X to have one

pole on Y’s land. In 2000, X undertakes a

project to replace telephone poles in the

service area in which Pole A is situated.

As part of that project, X incurs costs in

2000 in removing and discarding Pole A

and installing a new telephone pole, Pole

C, in the same location. X also undertakes

a second project to replace telephone

poles in the service area in which Pole B

is situated. X installs a new telephone

pole, Pole D, on Y’s land, but not in the

same location as Pole B. As part of this

second project and to comply with the

easement, X incurs costs in 2000 in removing and discarding Pole B.

LAW AND ANALYSIS

Section 162 of the Internal Revenue

Code and § 1.162–1 of the Income Tax

Regulations generally allow a deduction

for all the ordinary and necessary expenses paid or incurred during the taxable

year in carrying on any trade or business.

Section 165 allows as a deduction any

loss sustained during the taxable year and

not compensated for by insurance or otherwise. For the allowance under § 165(a)

of losses arising from the permanent withdrawal of depreciable property from use

712

in a trade or business or in the production

of income, § 1.165–2(c) cross references

§ 1.167(a)–8(a), which permits, in part, a

loss from physical abandonment of retired

property.

Under §§ 263(a) and 1.263(a)–1(a), no

deduction is allowed for capital expenditures, such as amounts paid for new buildings or for permanent improvements or

betterments made to increase the value of

any property. Section 1.263(a)–2(a) provides that capital expenditures include the

costs of acquisition, construction, or erection of buildings, machinery and equipment, furniture and fixtures, and similar

property having a useful life substantially

beyond the taxable year.

Section 263A generally requires taxpayers that are producing real or tangible

personal property to capitalize direct material costs, direct labor costs, and indirect

costs that are properly allocable to the

produced property. Section 263A(g)(1)

provides that, for purposes of § 263A, the

term “produce” includes construct, build,

install, manufacture, develop, or improve.

Under § 1.263A–1(e)(3)(i), indirect costs

are allocable to produced property under

§ 263A when the costs directly benefit or

are incurred by reason of the performance

of production activities.

The costs of removing an asset have

been historically allocable to the removed

asset and, thus, generally deductible when

the asset is retired and the costs are incurred. A deduction generally is allowed

whether a taxpayer accounts for the retired asset in a single asset account or in a

multiple asset account (e.g., a general

asset account or a mass asset account).

See § 1.165–3(b); § 1.167(a)–1(c); §

1.167(a)– 11(d)(3)(x); Rev. Rul. 74–455,

1974–2 C.B. 63; Rev. Rul. 75–150,

1975–1 C.B. 73. But see § 280B, requiring that the costs of demolishing buildings be added to the basis of the land, and

§ 1.165–3(a), requiring capitalization of

demolition costs when the taxpayer acquires an asset with the intent to demolish

it. See, e.g., Wood County Telephone Co.

v. Commissioner, 51 T.C. 72 (1968); Rev.

Rul. 69–62, 1969–1 C.B. 58.

The removal costs of Poles A and B are

not required to be capitalized under

§ 263(a). In both situations the removal

costs are properly allocable to the retired

2000–9 I.R.B.

poles, and thus do not relate to assets having a useful life in the taxpayer’s business

extending substantially beyond the taxable

year in which the removal costs are incurred. The fact that Poles A and B are retired as part of a replacement project does

not mean that the removal costs are required to be capitalized under § 263(a).

Furthermore, the removal costs are not required to be capitalized under § 263A because the costs are incurred for the purpose

of retiring Poles A and B and not by reason

of the installation of Poles C and D. The

analysis in this ruling does not apply to the

removal of a component of a depreciable

asset, the costs of which are either deductible or capitalizable based on whether

replacement of the component constitutes a

repair or an improvement. See §1.162–4

and § 1.263(a)–1(b).

HOLDING

If the retirement and removal of a depreciable asset occurs in connection with

the installation or production of a replacement asset, the costs incurred in removing

the retired asset are not required to be

capitalized under § 263(a) or 263A as part

of the cost of the replacement asset.

APPLICATION

Any change in a taxpayer’s method of accounting to conform with this revenue ruling

is a change in method of accounting to

which the provisions of §§ 446 and 481 and

the regulations thereunder apply. Except for

assets for which depreciation is determined

in accordance with § 1.167(a)–11 (ADR),

the taxpayer’s new method of treating removal costs for assets accounted for in a

multiple asset account must be consistent

with the taxpayer’s method of treating salvage proceeds. See Rev. Rul. 74– 455. (See

sections 2.01 and 2.02 of the Appendix of

Rev. Proc. 99–49, 1999–52 I.R.B. 725, for

changing a taxpayer’s present method of

treating salvage proceeds.) A taxpayer wanting to change its method of accounting to

conform with the holding in this revenue ruling must follow the automatic change in accounting method provisions of Rev. Proc.

99–49, except that the scope limitations in

section 4.02 of Rev. Proc. 99–49 do not

apply. However, if the taxpayer is under examination, before an appeals office, or before a federal court with respect to any income tax issue, the taxpayer must provide a

copy of the Form 3115, Application for

2000–9 I.R.B.

Change in Accounting Method, to the examining agent(s), appeals officer, or counsel for

the government, as appropriate, at the same

time that it files the copy of the Form 3115

with the national office. The Form 3115

must contain the name(s) and telephone

number(s) of the examining agent(s), appeals officer, or counsel for the government,

as appropriate. In addition, if the asset is

public utility property within the meaning of

§ 168(i)(10) or former § 167(l)(3)(A), the

taxpayer must comply with the terms and

conditions in section 2.01(3)(b)(vi) of the

Appendix of Rev. Proc. 99–49.

Section 411.—Minimum Vesting

Standards

EFFECT ON OTHER DOCUMENTS

AGENCY: Internal Revenue Service

(IRS), Treasury.

Rev. Proc. 99–49 is modified and amplified to include this change in accounting method in the APPENDIX.

26 CFR 1.411(a)–11: Restriction and valuation of

distributions.

T.D. 8873

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1, 35, and 602

New Technologies in Retirement

Plans

ACTION: Final regulations.

26 CFR 1.263A–1: Uniform capitalization of costs.

SUMMARY: This document contains

amendments to the regulations governing

certain notices and consents required in

connection with distributions from retirement plans. Specifically, these regulations set forth applicable standards for the

transmission of those notices and consents through electronic media and modify the timing requirements for providing

certain distribution-related notices. The

regulations provide guidance to plan

sponsors and administrators by interpreting the notice and consent requirements in

the context of the electronic administration of retirement plans. The regulations

affect retirement plan sponsors, administrators, and participants.

If the retirement and removal of a depreciable asset

occurs in connection with the installation or production of a replacement asset, are the costs incurred in removing the retired asset required to be capitalized

under § 263(a) or 263A as part of the cost of the replacement asset? See Rev. Rul. 2000–7, page 712.

DATES: Effective Date: These regulations are effective January 1, 2001.

Applicability Date: These regulations

apply to plan years beginning on or after

January 1, 2001.

DRAFTING INFORMATION

The principal author of this revenue

ruling is Beverly Katz of the Office of Assistant Chief Counsel (Income Tax and

Accounting). For further information regarding this revenue ruling contact Ms.

Katz on (202) 622-4950 (not a toll-free

call).

Section 263A.—Capitalization

and Inclusion in Inventory Costs

of Certain Expenses

Section 280F.—Limitation on

Depreciation for Luxury

Automobiles; Limitation where

Certain Property Used for

Personal Purposes

26 CFR 1.280F–7: Property leased after December

31, 1986.

This procedure provides owners and lessees of passenger automobiles (including electric automobiles)

with tables detailing the limitations on depreciation

deductions for automobiles first placed in service during calendar year 2000 and the amounts to be included

in income for automobiles first leased during calendar

year 2000. See Rev. Proc. 2000–18, page 722.

713

FOR FURTHER INFORMATION CONTACT: Catherine Livingston Fernandez,

(202) 622-6030 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

The collection of information contained in these final regulations has 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 15451632. Responses to this collection of information are mandatory.

An agency may not conduct or sponsor,

and a person is not required to respond to,

February 28, 2000

a collection of information unless the collection of information displays a valid

control number.

The estimated annual burden per respondent and/or recordkeeper is 76 minutes.

Comments concerning the accuracy of

this burden estimate and suggestions for

reducing this burden should be sent to the

Internal Revenue Service, Attn: IRS Reports Clearance Officer, OP:FS:FP, Washington, DC 20224, and to the Office of

Management and Budget, Attn: Desk Officer for the Department of the Treasury,

Office of Information and Regulatory Affairs, Washington, DC 20503.

Books or records relating to this 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.

Background

This document contains amendments to

the Income Tax Regulations (26 CFR parts

1 and 35) under sections 402(f), 411(a)(11)

and 3405(e)(10)(B). The regulations under

section 3405(e)(10)(B) (new Q/A d–35 and

d–36 of section 35.3405–1), like the regulations under sections 402(f) and 411(a)(11)

are final regulations. These regulations finalize proposed regulations that were published as a notice of proposed rulemaking

(REG–118662–98, 1999–13 I.R.B. 13) in

the Federal Register (63 FR 70071) on

December 18, 1998. A public hearing was

held on the proposed regulations on April

15, 1999.

In addition to the proposed regulations,

the IRS and Treasury issued Notice 99–1

(1999–2 I.R.B. 8), and Announcement

99–6 (1999–4 I.R.B. 24), concerning the

use of electronic media under retirement

plans. Notice 99–1 confirms that the “paperless” administration of participant enrollments, contribution elections, investment elections, beneficiary designations

(other than designations requiring spousal

consent), direct rollover elections, and

certain other transactions do not cause a

qualified plan to fail to satisfy the requirements of section 401(a) (or the requirements for a qualified cash or deferred

arrangement under section 401(k)). Announcement 99–6 authorizes the electronic transmission of Form W-4P.

The proposed regulations, Notice 99–1,

February 28, 2000

and Announcement 99–6 were issued pursuant to section 1510 of the Taxpayer Relief

Act of 1997. That section provides for the

Secretary of the Treasury to issue guidance

designed to interpret the notice, election,

consent, disclosure, time, and related

recordkeeping requirements under the Code

and the Employee Retirement Income Security Act of 1974 (ERISA) regarding the use

of new technologies by sponsors and administrators of retirement plans and to clarify the extent to which writing requirements

under the Code relating to retirement plans

permit paperless transactions. Section 1510

provides that the guidance must protect participant and beneficiary rights. Any final

regulations applicable to this guidance may

not be effective until the first plan year beginning at least six months after issuance as

final regulations.

Explanation of Provisions

General

Commentators generally praised the approach taken in the proposed regulations of

providing broad, flexible standards for the

transmission of certain notices and consent

required for distributions through electronic

media. Commentators stated that the

guidelines set forth in the proposed regulations facilitate the expanded use of new

technologies and recognize the likelihood

of future technological advances in plan administration. Accordingly, the final regulations retain this approach and:

• Permit electronic delivery of the notice

of distribution options and the right to

defer distribution under section

411(a)(11), the rollover notice under

section 402(f), and the withholding notice under section 3405(e)(10)(B);

• Permit electronic transmission of participant consent to a distribution under

section 411(a)(11); and

• Permit a plan to provide the section

411(a)(11) and section 402(f) notices

more than 90 days before a distribution,

if the plan provides a summary of the

notices within 90 days before the distribution.

Notices Under Sections 402(f),

411(a)(11), and 3405(e)(10)(B)

1. Use of electronic media for delivery of

notices

The proposed regulations provide that,

in general, a plan may furnish a notice re-

714

quired under section 402(f), 411(a)(11),

or 3405(e)(10)(B) either on a written

paper document or through an electronic

medium reasonably accessible to the participant to whom the notice is given. The

proposed regulations require that any

electronic notice be provided under a system reasonably designed to give the notice in a manner no less understandable to

the participant than a written paper document and that the participant be advised

of the right to request and to receive a

copy of the notice on a written paper document without charge. The final regulations adopt these rules without change.

One commentator noted that the proposed regulations do not define the term

reasonably accessible and suggested that

the final regulations require that participants have effective access at their place

of work to any electronic medium used to

deliver the notices under sections 402(f),

411(a)(11), and 3405(e)(10)(B). The IRS

and Treasury, after further consideration,

believe that the reasonably accessible

standard protects the interests of plan participants and, therefore, have retained the

proposed terminology.

The same commentator raised more

general concerns with the use of electronic media to transmit notices. This

commentator argued that an electronic

notice should be “actually received (not

just sent or available) and read by the participant, be permanently accessible, and

easily converted to a printed document,

by using an available printer and/or

through a request for a paper writing.” In

response to these concerns, the IRS and

Treasury reiterate the view, expressed in

the preamble to the proposed regulations,

that the legal standards for the delivery of

distribution-related notices under sections

402(f), 411(a)(11), and 3405(e)(10)(B)

should be the same regardless of the

medium of delivery. Additionally, the

IRS and Treasury note that many of the

concerns raised by this commentator

about electronic media are adequately addressed by the requirement in the regulations that participants always have the

right to request and to receive a written

paper notice without charge.

Several commentators objected to the requirement that participants be able to receive the notice on a written paper document upon request. These commentators

argued that simply making written paper

2000–9 I.R.B.

notices available through an electronic

medium (such as a printing option on an email system or a plan web site) protects the

interests of participants in having access to

written paper notices without placing the

burden of providing written paper notices

on plan sponsors and administrators. However, the IRS and Treasury believe that the

right to request and to receive a written

paper notice is an important fail-safe for paperless plan administration. The requirement ensures that no participant is denied

ready access to a usable copy of a required

distribution notice, and it limits the need for

the IRS and Treasury to regulate the manner in which written paper notices are made

available through electronic media. The

IRS and Treasury believe that the burden

for plan sponsors and administrators to

maintain a process that will generate written paper notices upon request is outweighed by the important safeguards provided by the requirement. In addition, as

indicated in the preamble to the proposed

regulations, the written paper notice provided on request need not be identical to

the electronic notice. Therefore, the written

paper notice can be either a printed version

of the electronic notice or a separate notice

prepared for distribution on paper. In light

of these considerations, the requirement is

retained in the final regulations.

One commentator requested clarification that the proposed regulations under

section 3405 would permit the electronic

delivery of the annual notice described in

section 3405(e)(10)(B)(i)(III) (which is

provided to recipients of periodic payments). The proposed regulations, as

written, apply to that annual notice; however, the final regulations make this point

expressly. One commentator asked that

the proposed regulations be amended to

provide for electronic withholding elections under section 3405 in addition to

electronic transmission of notices under

section 3405. It is unclear what, if any,

utility such a change in the regulations

would have in light of the ability to use

electronic media for transmission of Form

W-4P, as set out in Announcement 99–6.

Therefore, no change has been made to

the regulations on this point.

2. Flexibility for timing requirement in

providing notices

Commentators favored the provision in

the proposed regulations that provided

flexibility with respect to the 90-day pe-

2000–9 I.R.B.

riod under sections 402(f) and 411(a)(11)

by providing an alternative timing rule.

Under this alternative timing rule, a plan

may give the full section 402(f) and section 411(a)(11) notices more than 90 days

before the distribution and provide the

participant a summary of the notice during the 90/30-day period under those sections. The full notice is not required to be

provided on a regular periodic basis and

may be provided in connection with other

materials (for example, in the summary

plan description or in a brochure describing plan distribution features), but it must

be updated (and provided to the participant) as necessary to ensure accuracy as

of the time the summary is given. The

proposed regulations provide that the

summary notice must set out the principal

provisions of the full notice, must refer

the participant to the most recent occasion

on which the full notice was provided,

and must advise the participant of the

right to request and to receive a copy of

the full notice without charge.

Several commentators interpreted the

requirement in the proposed regulations

that the summary refer the participant to

the most recent occasion on which the full

notice was provided as requiring an indication of the precise date on which the

participant was given the full notice and

the precise location of the full notice if it

was provided in a document containing

other information (such as the summary

plan description). These commentators

argued that this information may vary on

a participant-by-participant basis and so

imposes a considerable administrative

burden on plan sponsors and administrators.1

The IRS and Treasury did not intend

for the proposed regulations to be construed as requiring individualized information about the full notice. Therefore,

the final regulations clarify, first, that the

summary must refer participants to the

most recent version of the full notice.

The purpose of this rule is to minimize

confusion among participants if more

than one version of a full notice has been

provided in the past. In many of those

1 For example, many plan sponsors provide a copy

of the summary plan description to each employee

when the employee is first hired. If the full notice is

provided through the summary plan description, the

precise date on which the full notice was last provided could differ for each participant.

715

cases, this reference could reasonably be

made by calendar year (for example, by

referring to the 1999 version of the section 402(f) notice). If more than one version of a distribution notice was provided

in a single calendar year, more precise

reference should be made (for example,

by referring to the May 1999 version of

the section 402(f) notice). Reference to

the notice by month or year would not be

necessary if only one version of the notice

had been provided in the past. If the full

notice were constantly available (for example, a notice that is available on a plan

web site and is kept up-to-date), it would

be adequate to state that fact.

Additionally, the regulations have been

modified to provide that, in the case of a

full notice provided in a document containing other information, the summary

must identify that document and must

provide a reasonable indication of where

the notice may be found in the document.

This requirement could be satisfied

through a number of means, including

identification of page number, section

heading, an index reference, the title of

the notice, or any other reference that

would reasonably direct the participant to

the notice.

One commentator objected to the alternative timing rule set out in the proposed

regulations. This commentator argued

that distribution-related notices should be

tied to a specific event (such as a participant request for a distribution) and that “it

is inappropriate to provide a notice of the

notice when using electronic or other new

technologies when it is just as easy to provide the actual notice itself.” The IRS

and Treasury agree that the information

contained in the section 402(f) and section 411(a)(11) notices should be provided to a participant in connection with

the participant’s contemplation of a distribution, but the IRS and Treasury believe

that providing a summary of a previously

provided notice and informing the participant of the right to request and to receive

the full notice adequately protect the interests of participants in this regard.

The preamble to the proposed regulations includes an example of a summary

section 402(f) notice provided through an

automated telephone system. Many commentators raised questions about this example. Several commentators argued that

the sample summary is too long and com-

February 28, 2000

plex to be of use in plan administration;

others argued that it does not include reference to every potentially applicable rule

concerning the taxation of plan distributions (for example, it does not refer to the

taxation of net unrealized appreciation on

the distribution of employer securities).

Commentators also inquired about the

legal status of the example because of its

placement in the preamble. The example

was intended merely to illustrate a summary notice that, in the view of the IRS

and Treasury, satisfies the requirements of

the proposed regulations. It was not intended as a model summary or as the exclusive form for such a summary. Although the example is not restated in

these final regulations, the IRS and Treasury are considering whether to issue additional guidance providing additional examples of summary notices. In this

regard, the IRS and Treasury will solicit

comments from interested parties regarding the development of those examples

and will invite interested parties to submit

draft summary notices to assist in the development of that guidance.

Consent Under Section 411(a)(11)

Consistent with the proposed regulations, the final regulations provide that, in

general, a plan may receive a participant’s

consent either on a written paper document or through an electronic medium

reasonably accessible to the participant.

As in the case of participant notices, the

regulations generally do not categorize

particular electronic media as either permissible or impermissible for this purpose

and do not prescribe detailed, media-specific rules. The standards are intended to

parallel the key attributes of participant

consent provided on written paper documents without imposing more stringent

requirements on electronic consents. The

proposed regulations provide that participant consent transmitted through an electronic medium must be given under a system that is reasonably designed to

preclude an individual other than the participant from giving the consent and that

provides the participant a reasonable opportunity to review and to confirm, modify, or rescind the terms of the distribution

before the consent to the distribution becomes effective. Comments on this portion of the proposed regulations were generally favorable, and no change has been

February 28, 2000

made in the final regulations.

One commentator, however, objected

outright to the use of electronic media for

the transmission of participant consent and

argued that, at a minimum, such consent

“should not be effective until after a written

confirmation is received and the participant

has a specified amount of time to revoke

it.” This commentator also argued that the

final regulations should prohibit the use of

automated telephone systems to provide

distribution-related notices and to receive

participant consent unless an automatic,

mandatory written confirmation of the participant’s election of a distribution option is

required along with a seven-day right of revocation. The IRS and Treasury concluded

that it is not advisable to impose new revocation rules based on the medium through

which a participant consents to a distribution. Both the proposed regulations and the

final regulations require that the terms of

any consent made through an electronic

medium be confirmed to the participant.

Additionally, the IRS and Treasury do not

believe that a right of revocation for a defined period after consent is given is more

necessary or appropriate in the case of consent made through an electronic medium

than it is in the case of consent made

through a written paper document. More

generally, the IRS and Treasury do not believe that the use of electronic media is improper or inappropriate for the transmission

of a participant’s consent under section

411(a)(11). If the requirements of the regulations are satisfied, consent provided in

that manner should reflect the considered

wishes of the participant as reliably as a

consent provided through a written paper

document.

Changes to the Examples in the

Regulations

Several commentators expressed concern about details in the examples illustrating the proposed regulations for distribution notices and consent. One of the

concerns involved the statement in the examples that a participant who wished to

change a PIN electronically would be unable to proceed with a distribution transaction until the plan sent a confirmation of the

change to the participant. Commentators

stated that the electronic systems maintained by plan sponsors and administrators

use an array of security features to ensure

participant identity, some of which might

716

permit an electronic transaction to proceed

after a PIN change. Although the prohibition on proceeding with an electronic transaction after a PIN change was intended

only to illustrate a commonly used system

and not as a substantive requirement, the

final regulations omit the statement from

the examples for the sake of clarity. Of

course, the examples in the final regulations presuppose that plan sponsors and administrators maintain adequate measures to

ensure participant identity when a PIN is

changed.

Notice 99–1 and Announcement 99–6

Commentators expressed support for

Notice 99–1, which indicates that a qualified plan will not fail to meet the requirements of section 401(a) (and that a qualified cash-or-deferred arrangement will

not fail to meet the requirements of section 401(k)) merely because it permits a

participant or beneficiary to use electronic

media to effect a transaction for which no

specific provision of the Code, the regulations, or other guidance of general applicability sets forth rules or standards regarding the media through which it may be

conducted. Announcement 99–6 permits

the electronic transmission of Form W-4P.

Commentators asked for clarification

whether Form W-4P may be transmitted

through a telephone system. The underlying standards for the electronic transmission of Form W-4P are intended to be the

same as those for the electronic transmission of Form W-4, as set out in

§31.3402(f)(5)–1(c). The preamble to the

proposed regulations for the electronic

transmission of Form W-4 indicates that

“[i]f an employer chooses to establish an

electronic system, the employer will be

free to determine the type of system (such

as telephone or computer) or systems

available to its employees.” (59 FR

18508 (Apr. 15, 1994)). Therefore, the

use of a telephone system for electronic

transmission of Form W-4P, if otherwise

consistent with Announcement 99–6 and

§31.3402(f)(5)–1(c), is permissible.

Commentators also asked the IRS and

Treasury to reconsider the requirement,

stated in Announcement 99–6, that the

electronic signature on Form W-4P be the

final entry in the submission of the form.

These commentators argue that this effectively requires the participant in most

cases to enter a PIN at both the beginning

2000–9 I.R.B.

and the end of a transaction that involves

the use of an electronic Form W-4P. The

IRS and Treasury are considering this

issue and anticipate issuing additional

guidance on this question.

Scope of These Regulations

These regulations do not address the application of Title I of ERISA (except for

section 203(e)) to the use of electronic

media for any plan communication or

transaction. Several commentators requested that the regulations be expanded to

include matters not covered by the proposed regulations. Most notably, commentators asked that the IRS and Treasury provide guidance on the use of electronic

media for plan loans under section 72(p),

nondiscrimination safe-harbor notices

under sections 401(k)(12) and 401(m)(11),

notices under section 204(h) of ERISA, and

distribution notices, elections, and spousal

consents governed by sections 401(a)(11)

and section 417.

The IRS and Treasury are actively considering comments submitted on regulations proposed under section 72(p) and

expect to issue additional guidance under

that section. It is anticipated that any

guidance on the use of electronic media in

connection with plan loans would be issued in connection with that additional

guidance. As the IRS and Treasury have

noted in the past, notices under sections

401(k)(12) and 401(m)(11) and ERISA

section 204(h) present legal issues distinct

from those presented by notices under

sections 402(f), 411(a)(11), and

3405(e)(10)(B). Notice 2000–3 (2000–4

I.R.B. 413) provides that, pending further

guidance, notices under sections

401(k)(12) and 401(m)(11) may be issued

through electronic media if standards set

forth in Notice 2000–3 which are similar

to those applicable to notices under these

regulations, are satisfied. Because of the

unique considerations applicable to notices under ERISA section 204(h), guidance with respect to the use of electronic

media in connection with section 204(h)

notices is not being issued at this time.

Finally, regarding notices, elections,

and spousal consents governed by sections 401(a)(11) and section 417, the IRS

and Treasury note that the statutory requirement that spousal consent be witnessed either by a notary public or a plan

representative appears to presuppose that

2000–9 I.R.B.

a spouse be in the physical presence of the

notary public or the plan representative at

the time consent is given. This appears to

place significant limitations on the utility

of electronic media in effecting spousal

consent.2 Thus, it is unclear what guidance the IRS and Treasury could issue

that would meaningfully facilitate paperless distributions in the case of plans subject to sections 401(a)(11) and 417.

Drafting Information

Reliance

Amendments to the Regulations

Plan sponsors and administrators may

rely on these final regulations for guidance for distributions made prior to the effective date.

Accordingly, 26 CFR parts 1, 35, and 602

are amended as follows:

Special Analyses

Paragraph 1. The authority citation for

part 1 continues to read, in part, as follows:

Authority: 26 U.S.C. 7805 * * *

Par. 2. Section 1.402(f)–1 is amended

by:

1. Revising Q&A–2.

2. Adding Q&A–5 and Q&A–6.

The revision and additions read as follows:

§1.402(f)–1 Required explanation of eligible rollover distributions; questions and

answers.

*****

Q-2: When must the plan administrator

provide the section 402(f) notice to a distributee?

A-2: The plan administrator must provide the section 402(f) notice to a distributee at a time that satisfies either paragraph (a) or (b) of this Q&A-2.

(a) This paragraph (a) is satisfied if the

plan administrator provides a distributee

with the section 402(f) notice no less than

30 days and no more than 90 days before

the date of a distribution. However, if the

distributee, after having received the section 402(f) notice, affirmatively elects a

distribution, a plan will not fail to satisfy

section 402(f) merely because the distribution is made less than 30 days after the

section 402(f) notice was provided to the

distributee, provided the plan administrator clearly indicates to the distributee that

the distributee has a right to consider the

decision of whether or not to elect a direct

rollover for at least 30 days after the notice is provided. The plan administrator

may use any method to inform the distributee of the relevant time period, provided

that the method is reasonably designed to

It has been determined that this Treasury

decision is not a significant regulatory action as defined in Executive Order 12866.

Therefore, a regulatory impact analysis is

not required. It is hereby certified that

these regulations will not have a significant

economic impact on a substantial number

of small entities. This certification is based

on the fact that the regulations provide paperless alternatives to notices that otherwise must be sent as written paper documents. It is anticipated that most small

businesses affected by these regulations

will be sponsors of retirement plans. Since

these notices are provided only upon distributions and since, in the case of a small

plan, there will be relatively few distributions per year, small plans that implement a

paperless system for delivering these notices will likely contract for them as part of

a paperless system for distributions offered

by outside vendors. The paperless delivery

of the notices will not add more than a

minor increment to the cost of these distribution systems or the plan sponsor will

continue to use a paper-based system. Accordingly, a Regulatory Flexibility Analysis is not required. Pursuant to section

7805(f) of the Code, the notice of proposed

rulemaking preceding these regulations

was submitted to the Chief Counsel for

Advocacy of the Small Business Administration for comment on its impact on small

business.

2

One commentator suggested that electronic transmission of spousal consent be permitted if the plan

has Areasonable certainty that the spouse has consented.@ That suggested standard appears to fall far

short of the witnessing requirement specifically set

forth in the statute.

717

The principal author of these regulations

is Catherine Livingston Fernandez, Office

of the Associate Chief Counsel (Employee

Benefits and Exempt Organizations), IRS.

However, personnel from other offices of

the IRS and Treasury Department participated in their development.

* * * * *

PART 1—INCOME TAXES

February 28, 2000

attract the attention of the distributee. For

example, this information could be either

provided in the section 402(f) notice or

stated in a separate document (e.g., attached to the election form) that is provided at the same time as the notice. For

purposes of satisfying the requirement in

the first sentence of paragraph (a) of this

Q&A-2, the plan administrator may substitute the annuity starting date, within the

meaning of §1.401(a)–20, Q&A-10, for

the date of the distribution.

(b) This paragraph (b) is satisfied if the

plan administrator—

(1) Provides a distributee with the section 402(f) notice;

(2) Provides the distributee with a summary of the section 402(f) notice within

the time period described in paragraph (a)

of this Q&A-2; and

(3) If the distributee so requests after

receiving the summary described in paragraph (b)(2) of this Q&A-2, provides the

section 402(f) notice to the distributee

without charge and no less than 30 days

before the date of a distribution (or the annuity starting date), subject to the rules

for the distributee’s waiver of that 30-day

period. The summary described in paragraph (b)(2) of this Q&A-2 must set forth

a summary of the principal provisions of

the section 402(f) notice, must refer the

distributee to the most recent version of

the section 402(f) notice (and, in the case

of a notice provided in any document containing information in addition to the notice, must identify that document and

must provide a reasonable indication of

where the notice may be found in that

document, such as by index reference or

by section heading), and must advise the

distributee that, upon request, a copy of

the section 402(f) notice will be provided

without charge.

*****

Q-5: Will the requirements of section

402(f) be satisfied if a plan administrator

provides a distributee with the section

402(f) notice or the summary of the notice

described in paragraph (b)(2) of Q&A-2

of this section other than through a written paper document?

A-5: A plan administrator may provide

a distributee with the section 402(f) notice

or the summary of that notice described in

paragraph (b)(2) of Q&A-2 of this section

either on a written paper document or

through an electronic medium reasonably

February 28, 2000

accessible to the distributee. A notice or

summary provided through an electronic

medium must be provided under a system

that satisfies the following requirements:

(a) The system must be reasonably designed to provide the notice or summary

in a manner no less understandable to the

distributee than a written paper document.

(b) At the time the notice or summary is

provided, the distributee must be advised

that the distributee may request and receive the notice on a written paper document at no charge, and, upon request, that

document must be provided to the distributee at no charge.

Q-6: Are there examples that illustrate

the provisions of Q&A-2 and Q&A-5 of

this section?

A-6: The following examples illustrate

the provisions of Q&A-2 and Q&A-5 of

this section:

Example 1. (i) A qualified plan (Plan A) permits

participants to request distributions by e-mail.

Under Plan A’s system for such transactions, a participant must enter his or her account number and

personal identification number (PIN); this information must match that in Plan A’s records in order for

the transaction to proceed. If a participant requests a

distribution from Plan A by e-mail and the distribution is an eligible rollover distribution, the plan administrator provides the participant with a section

402(f) notice by e-mail. The plan administrator also

advises the participant that he or she may request the

section 402(f) notice on a written paper document

and that, if the participant requests the notice on a

written paper document, it will be provided at no

charge. To proceed with the distribution by e-mail,

the participant must acknowledge receipt, review,

and comprehension of the section 402(f) notice.

(ii) In Example 1, Plan A does not fail to satisfy

the notice requirement of section 402(f) merely because the notice is provided to the participant other

than through a written paper document.

Example 2. (i) A qualified plan (Plan B) permits

participants to request distributions through the Plan

B web site (Internet or intranet). Under Plan B’s

system for such transactions, a participant must

enter his or her account number and personal identification number (PIN); this information must match

that in Plan B’s records in order for the transaction

to proceed. A participant may request a distribution

from Plan B by following the applicable instructions

on the Plan B web site. After the participant has requested a distribution that is an eligible rollover distribution, the participant is automatically shown a

page on the web site containing a section 402(f) notice. Although this page of the web site may be

printed, the page also advises the participant that he

or she may request the section 402(f) notice on a

written paper document by calling a telephone number indicated on the web page and that, if the participant requests the notice on a written paper document, it will be provided at no charge. To proceed

with the distribution by e-mail, the participant must

acknowledge receipt, review, and comprehension of

the section 402(f) notice.

718

(ii) In this Example 2, Plan B does not fail to satisfy the notice requirement of section 402(f) merely

because the notice is provided to the participant

other than through a written paper document.

Example 3. (i) A qualified plan (Plan C) permits

participants to request distributions through Plan C’s

automated telephone system. Under Plan C’s system

for such transactions, a participant must enter his or

her account number and personal identification number (PIN); this information must match that in Plan

C’s records in order for the transaction to proceed.

Plan C provides the section 402(f) notice in the summary plan description, the most recent version of

which was distributed to participants in 1997. A participant may request a distribution from Plan C by

following the applicable instructions on the automated telephone system. In 1999, a participant,

using Plan C’s automated telephone system, requests

a distribution that is an eligible rollover distribution.

The automated telephone system refers the participant to the most recent version of the section 402(f)

notice which was provided in the summary plan description, informs the participant where the section

402(f) notice may be located in the summary plan description, and provides an oral summary of the material provisions of the section 402(f) notice. The system also advises the participant that the participant

may request the section 402(f) notice on a written

paper document and that, if the participant requests

the notice on a written paper document, it will be

provided at no charge. Before proceeding with the

distribution, the participant must acknowledge receipt, review, and comprehension of the summary.

Under Plan C’s system for processing such transactions, the participant’s distribution will be made no

more than 90 days and no fewer than 30 days after

the participant requests the distribution and receives

the summary of the section 402(f) notice (unless the

participant waives the 30-day period).

(ii) In this Example 3, Plan C does not fail to satisfy the notice requirement of section 402(f) merely

because Plan C provides a summary of the section

402(f) notice or merely because the summary is provided to the participant other than through a written

paper document.

Example 4. (i) Same facts as Example 3, except

that, pursuant to Plan C’s system for processing such

transactions, a participant who so requests is transferred to a customer service representative whose

conversation with the participant is recorded. The

customer service representative provides the summary of the section 402(f) notice by reading from a

prepared text.

(ii) In this Example 4, Plan C does not fail to satisfy the notice requirement of section 402(f) merely

because Plan C provides a summary of the section

402(f) notice or merely because the summary of the

section 402(f) notice is provided to the participant

other than through a written paper document.

Example 5. (i) Same facts as Example 3, except

that Plan C does not provide the section 402(f) notice in the summary plan description. Instead, the

automated telephone system reads the section 402(f)

notice to the participant.

(ii) In this Example 5, Plan C does not satisfy the

notice requirement of section 402(f) because oral

delivery alone of the section 402(f) notice through

the automated telephone system is not sufficient.

Example 6. (i) The facts are the same as in Example 1, except that Participant D requested a distri-

2000–9 I.R.B.

bution by e-mail, then terminated employment, and,

following the termination, no longer has reasonable

access to Plan A e-mail.

(ii) In this Example 6, Plan A does not satisfy the

notice requirement of section 402(f) because the

electronic medium through which the notice is provided is not reasonably accessible to Participant D.

Plan A must provide the section 402(f) notice to Participant D in a written paper document or by an electronic means that is reasonably accessible to Participant D.

Par. 3. Section 1.411(a)–11 is amended

by:

1. Revising paragraphs (c)(2)(i) and

(iii).

2. Removing the language “Written

consent” in paragraph (c)(2)(ii) and (c)(3)

and adding “Consent” in its place.

3. Adding paragraphs (f) and (g).

The revisions and additions read as follows:

§1.411(a)–11 Restriction and valuation of

distributions.

*****

(c) * * *

(2) Consent. (i) No consent is valid

unless the participant has received a general description of the material features of

the optional forms of benefit available

under the plan. In addition, so long as a

benefit is immediately distributable, a

participant must be informed of the right,

if any, to defer receipt of the distribution.

Furthermore, consent is not valid if a significant detriment is imposed under the

plan on any participant who does not consent to a distribution. Whether or not a

significant detriment is imposed shall be

determined by the Commissioner by examining the particular facts and circumstances.

*****

(iii) A plan must provide a participant

with notice of the rights specified in this

paragraph (c)(2) at a time that satisfies either paragraph (c)(2)(iii)(A) or (B) of this

section:

(A) This paragraph (c)(2)(iii)(A) is satisfied if the plan provides a participant

with notice of the rights specified in this

paragraph (c)(2) no less than 30 days and

no more than 90 days before the date the

distribution commences. However, if the

participant, after having received this notice, affirmatively elects a distribution, a

plan will not fail to satisfy the consent requirement of section 411(a)(11) merely

because the distribution commences less

than 30 days after the notice was provided

to the participant, provided the plan ad-

2000–9 I.R.B.

ministrator clearly indicates to the participant that the participant has a right to at

least 30 days to consider whether to consent to the distribution.

(B) This paragraph (c)(2)(iii)(B) is satisfied if the plan—

(1) Provides the participant with notice

of the rights specified in this paragraph

(c)(2);

(2) Provides the participant with a summary of the notice within the time period

described in paragraph (c)(2)(iii)(A) of

this section; and

(3) If the participant so requests after

receiving the summary described in paragraph (c)(2)(iii)(B)(2) of this section, provides the notice to the participant without

charge and no less than 30 days before the

date the distribution commences, subject

to the rules for the participant’s waiver of

that 30-day period. The summary described in paragraph (c)(2)(iii)(B)(2) of

this section must advise the participant of

the right, if any, to defer receipt of the distribution, must set forth a summary of the

distribution options under the plan, must

refer the participant to the most recent

version of the notice (and, in the case of a

notice provided in any document containing information in addition to the notice,

must identify that document and must

provide a reasonable indication of where

the notice may be found in that document,

such as by index reference or by section

heading), and must advise the participant

that, upon request, a copy of the notice

will be provided without charge.

*****

(f) Medium for notice and consent—

(1) Notice. The notice of a participant’s

rights described in paragraph (c)(2) of this

section or the summary of that notice described in paragraph (c)(2)(iii)(B)(2) of

this section may be provided either on a

written paper document or through an

electronic medium reasonably accessible

to the participant. A notice or summary

provided through an electronic medium

must be provided under a system that satisfies the following requirements:

(i) The system must be reasonably designed to provide the notice or summary

in a manner no less understandable to the

participant than a written paper document.

(ii) At the time the notice or summary

is provided, the participant must be advised that he or she may request and re-

719

ceive the notice on a written paper document at no charge, and, upon request, that

document must be provided to the participant at no charge.

(2) Consent. The consent described in

paragraphs (c)(2) and (3) of this section

may be given either on a written paper

document or through an electronic

medium reasonably accessible to the participant. A consent given through an electronic medium must be given under a system that satisfies the following

requirements:

(i) The system must be reasonably designed to preclude any individual other

than the participant from giving the consent.

(ii) The system must provide the participant with a reasonable opportunity to review and to confirm, modify, or rescind

the terms of the distribution before the

consent to the distribution becomes effective.

(iii) The system must provide the participant, within a reasonable time after the

consent is given, a confirmation of the

terms (including the form) of the distribution either on a written paper document or

through an electronic medium under a

system that satisfies the requirements of

paragraph (f)(1) of this section.

(g) Examples. The provisions of paragraph (f) of this section are illustrated by

the following examples:

Example 1. (i) A qualified plan (Plan A) permits

participants to request distributions by e-mail. Under

Plan A’s system for such transactions, a participant

must enter his or her account number and personal

identification number (PIN); this information must

match that in Plan A’s records in order for the transaction to proceed. If a participant requests a distribution

from Plan A by e-mail, the plan administrator provides

the participant with a section 411(a)(11) notice by email. The plan administrator also advises the participant by e-mail that he or she may request the section

411(a)(11) notice on a written paper document and

that, if the participant requests the notice on a written

paper document, it will be provided at no charge. To

proceed with the distribution by e-mail, the participant

must acknowledge receipt, review, and comprehension of the section 411(a)(11) notice and must consent

to the distribution within the time required under section 411(a)(11). Within a reasonable time after the

participant’s consent by e-mail, the plan administrator,

by e-mail, sends confirmation of the terms (including

the form) of the distribution to the participant and advises the participant that he or she may request the

confirmation on a written paper document that will be

provided at no charge.

(ii) In this Example 1, Plan A does not fail to satisfy

the notice or consent requirement of section

411(a)(11) merely because the notice and consent are

provided other than through written paper documents.

February 28, 2000

Example 2. (i) Same facts as Example 1, except

that, instead of sending a confirmation of the distribution by e-mail, the plan administrator, within a reasonable time after the participant’s consent, sends the participant an account statement for the period that

includes information reflecting the terms of the distribution.

(ii) In this Example 2, Plan A does not fail to satisfy

the consent requirement of section 411(a)(11) merely

because the consent is provided other than through a

written paper document.

Example 3. (i) A qualified plan (Plan B) permits

participants to request distributions through the Plan B

web site (Internet or intranet). Under Plan B’s system

for such transactions, a participant must enter his or

her account number and personal identification number (PIN); this information must match that in Plan B’s

records in order for the transaction to proceed. A participant may request a distribution from Plan B by following the applicable instructions on the Plan B web

site. After the participant has requested a distribution,

the participant is automatically shown a page on the

web site containing a section 411(a)(11) notice. Although this page of the web site may be printed, the

page also advises the participant that he or she may request the section 411(a)(11) notice on a written paper

document by calling a telephone number indicated on

the web page and that, if the participant requests the

notice on a written paper document, it will be provided

at no charge. To proceed with the distribution by email, the participant must acknowledge receipt, review, and comprehension of the section 411(a)(11) notice and must consent to the distribution within the

time required under section 411(a)(11). The web site

requires the participant to review and confirm the

terms (including the form) of the distribution before

the transaction is completed. After the participant has

given consent via e-mail, the Plan B web site confirms

the distribution to the participant and advises the participant that he or she may request the confirmation on

a written paper document that will be provided at no

charge.

(ii) In this Example 3, Plan B does not fail to satisfy

the notice or consent requirement of section

411(a)(11) merely because the notice and consent are

provided other than through written paper documents.

Example 4. (i) A qualified plan (Plan C) permits

participants to request distributions through Plan C’s

automated telephone system. Under Plan C’s system

for such transactions, a participant must enter his or

her account number and personal identification number (PIN); this information must match that in Plan C’s

records in order for the transaction to proceed. Plan C

provides only the following distribution options: a

lump sum and annual installments over 5, 10, or 20

years. A participant may request a distribution from

Plan C by following the applicable instructions on the

automated telephone system. After the participant has

requested a distribution, the automated telephone system reads the section 411(a)(11) notice to the participant. The automated telephone system also advises

the participant that he or she may request the notice on

a written paper document and that, if the participant

requests the notice on a written paper document, it will

be provided at no charge. Before proceeding with the

distribution transaction, the participant must acknowledge receipt, review, and comprehension of the section

411(a)(11) notice and must consent to the distribution

within the time required under section 411(a)(11). The

automated telephone system requires the participant to

February 28, 2000

review and confirm the terms (including the form) of

the distribution before the transaction is completed.

After the participant has given consent, the automated

telephone system confirms the distribution to the participant and advises the participant that he or she may

request the confirmation on a written paper document

that will be provided at no charge. Because Plan C has

relatively few and simple distribution options, the provision of the section 411(a)(11) notice over the automated telephone system is no less understandable to

the participant than a written paper notice.

(ii) In this Example 4, Plan C does not fail to satisfy

the notice or consent requirement of section

411(a)(11) merely because the notice and consent are

provided other than through written paper documents.

Example 5. (i) Same facts as Example 4, except

that, pursuant to Plan C’s system for processing such

transactions, a participant who so requests is transferred to a customer service representative whose conversation with the participant is recorded. The customer service representative provides the section

411(a)(11) notice from a prepared text and processes

the participant’s distribution in accordance with predetermined instructions of the plan administrator.

(ii) In this Example 5, Plan C does not fail to satisfy

the notice or consent requirement of section

411(a)(11) merely because the notice and consent are

provided other than through written paper documents.

Example 6. (i) Same facts as Example 1, except

that Participant D requested a distribution by e-mail,

then terminated employment and, following the termination, no longer has access to e-mail.

(ii) In this Example 6, Plan A does not satisfy the

notice or consent requirement of section 411(a)(11)

because the electronic medium through which the notice is provided is not reasonably accessible to Participant D. Plan A must provide Participant D the section

411(a)(11) notice in a written paper document or by an

electronic means that is reasonably accessible to Participant D.

Par. 4. The heading for part 35 is revised to read as follows:

PART 35—EMPLOYMENT TAX AND

COLLECTION OF INCOME TAX AT

SOURCE REGULATIONS UNDER

THE TAX EQUITY AND FISCAL

RESPONSIBILITY ACT OF 1982

Par. 5. The authority citation for part

35 is revised to read as follows:

Authority: 26 U.S.C. 6047(e), 7805;

68A Stat. 917; 96 Stat. 625; Public Law

97–248 (96 Stat. 623).

Section 35.3405–1 also issued under 26

U.S.C. 3405(e)(10)(B)(iii).

Section 35.3405–1T also issued under

26 U.S.C. 3405(e)(10)(B)(iii).

Par. 6. Redesignate §35.3405–1 as

§35.3405–1T and revise the heading to

read as follows:

§35.3405–1T Questions and answers relating to withholding on pensions, annuities, and certain other deferred income

(temporary regulations).

*****

720

Par. 7. A new §35.3405–1 is added to

read as follows:

§35.3405–1 Questions and answers relating to withholding on pensions, annuities, and certain other deferred income.

The following questions and answers

relate to withholding on pensions, annuities, and other deferred income under

section 3405 of the Internal Revenue

Code of 1986, as added by section 334 of

the Tax Equity and Fiscal Responsibility

Tax Act of 1982 (Pub. L. 97–248)

(TEFRA).

a-1 through d-34 [Reserved] For further guidance, see §35.3405–1T.

*****

d-35. Q. Through what medium may

a payor provide the notice required under

section 3405 to a payee?

A. A payor may provide the notice required under section 3405 (including the

abbreviated notice described in d-27 of

§35.3405–1T and the annual notice described in d-31 of §35.3405–1T) to a

payee either on a written paper document

or through an electronic medium reasonably accessible to the payee. A notice

provided through an electronic medium

must be provided under a system that satisfies the following requirements:

(a) The system must be reasonably designed to provide the notice in a manner

no less understandable to the payee than a

written paper document.

(b) At the time the notice is provided,

the payee must be advised that the payee

may request and receive the notice on a

written paper document at no charge, and,

upon request, that document must be provided to the payee at no charge.

d-36. Q. Are there examples that illustrate the provisions of d-35 of this section?

A. The provisions of d-35 of this section

are illustrated by the following examples:

Example 1. (i) An employer deferred compensation plan (Plan A) permits participants to request distributions by e-mail. Under Plan A’s system for such

transactions, a participant must enter his or her account number and personal identification number

(PIN); this information must match that in Plan A’s

records in order for the transaction to proceed. The

plan administrator is the payor. If a participant requests a distribution from Plan A by e-mail, the plan

administrator provides the participant with the notice

required under section 3405 by e-mail. The plan administrator also advises the participant by e-mail that

he or she may request the notice on a written paper

document and that, if the participant requests the notice on a written paper document, it will be provided at

no charge. To proceed with the distribution by e-mail,

2000–9 I.R.B.

the participant must acknowledge receipt, review, and

comprehension of the notice.

(ii) In this Example 1, the plan administrator does

not fail to satisfy the notice requirement of section

3405 merely because the notice is provided to the participant other than through a written paper document.

Example 2. (i) An employer deferred compensation plan (Plan B) permits participants to request distributions through the Plan B web site (Internet or intranet). Under Plan B’s system for such transactions, a

participant must enter his or her account number and

personal identification number (PIN); this information

must match that in Plan B’s records in order for the

transaction to proceed. The plan administrator is the

payor. A participant may request a distribution from

Plan B by following the applicable instructions on the

Plan B web site. After the participant has requested a

distribution, the participant is automatically shown a

page on the web site containing the notice required by

section 3405. Although this page of the web site may

be printed, the page also advises the participant that he

or she may request the notice on a written paper document and that, if the participant requests the notice on

a written paper document, it will be provided at no

charge. To proceed with the distribution through the

web site, the participant must acknowledge receipt, review, and comprehension of the notice.

(ii) In this Example 2, the plan administrator does

not fail to satisfy the notice requirement of section

3405 merely because the notice is provided to the participant other than through a written paper document.

Example 3. (i) An employer deferred compensation plan (Plan C) permits participants to request distributions through Plan C’s automated telephone system. Under Plan C’s system for such transactions, a

participant must enter his or her account number and

personal identification number (PIN); this information

must match that in Plan C’s records in order for the

transaction to proceed. The plan administrator is the

payor. A participant may request a distribution from

Plan C by following the applicable instructions on the

automated telephone system. After the participant has

requested a distribution, the automated telephone system reads the notice required by section 3405 to the

participant. The automated telephone system also advises the participant that he or she may request the notice on a written paper document and that, if the participant requests the notice on a written paper document,

it will be provided at no charge. Before proceeding

with the distribution transaction, the participant must

acknowledge receipt, review, and comprehension of

the notice.

(ii) In this Example 3, the plan administrator does

not fail to satisfy the notice requirement of section

3405 merely because the notice is provided to the participant other than through a written paper document.

Example 4. (i) Same facts as Example 3, except

that, pursuant to the system for processing such transactions, a participant who so requests is transferred to

a customer service representative whose conversation

with the participant is recorded. The customer service

representative provides the notice required by section

3405 by reading from a prepared text.

(ii) Conclusion. In this Example 4, the plan administrator does not fail to satisfy the notice requirement

of section 3405 merely because the notice is provided

to the participant other than through a written paper

document.

Example 5. (I) Same facts as Example 1, except

that Participant D requested a distribution by e-mail

and then terminated employment. Participant D no

longer has access to e-mail.

(ii) In this Example 5, Plan A does not satisfy the

notice requirement of section 3405 because the electronic medium through which the notice is provided is

not reasonably accessible to Participant D. Plan A

CFR Part or Section Where

Identified and Described

must provide the notice required by section 3405 to

Participant D in a written paper document or by an

electronic medium that is reasonably accessible to Participant D.

PART 602—OMB CONTROL

NUMBERS UNDER THE

PAPERWORK REDUCTION ACT

Par. 6. The authority citation for part

602 continues to read as follows:

Authority: 26 U.S.C. 7805.

Par. 7. In §602.101, paragraph (b) is

amended by adding the following entry in

the table in numerical order to read as follows:

§602.101 OMB Control numbers.

*****

(b) * * *

Robert E. Wenzel,

Deputy Commissioner

of Internal Revenue.

Approved January 20, 2000.

Jonathan Talisman,

Acting Assistant Secretary

of the Treasury.

(Filed by the Office of the Federal Register on February 7, 2000, 8:45 a.m., and published in the issue

of the Federal Register for February 8, 2000, 65 F.R.

6001)

Current OMB

Control No.

*****

1.402(f)–1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1545–1632

*****

1.411(a)–11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1545–1632

*****

Section 3221.—Rate of Tax

Determination of Quarterly Rate

of Excise Tax for Railroad

Retirement Supplemental

Annuity Program

In accordance with directions in Section

3221(c) of the Railroad Retirement Tax Act

(26 U.S.C., Section 3221(c)), the Railroad

Retirement Board has determined that the

excise tax imposed by such Section 3221(c)

on every employer, with respect to having

individuals in his employ, for each work-

2000–9 I.R.B.

hour for which compensation is paid by

such employer for services rendered to him

during the quarter beginning January 1,

2000, shall be at the rate of 26 1/2 cents.

In accordance with directions in Section

15(a) of the Railroad Retirement Act of

1974, the Railroad Retirement Board has determined that for the quarter beginning January 1, 2000, 38.7 percent of the taxes collected under Sections 3211(b) and 3221(c)

of the Railroad Retirement Tax Act shall be

credited to the Railroad Retirement Account

and 61.3 percent of the taxes collected under

such Sections 3211(b) and 3221(c) plus 100

721

percent of the taxes collected under Section

3221(d) of the Railroad Retirement Tax Act

shall be credited to the Railroad Retirement

Supplemental Account.

Dated December 2, 1999.

By Authority of the Board.

Beatrice Ezerski,

Secretary of the Board.

(Filed by the Office of the Federal Register on December 12, 1999, 8:45 a.m., and published in the

issue of the Federal Register for December 13, 1999,

64 F.R. 69575)

February 28, 2000

Part III. Administrative, Procedural, and Miscellaneous

26 CFR 601.105: Examination of returns and

claims for refund, credit, or abatement;

determination of correct tax liability.

(Also Part I, sections 61, 280F; 1.61.21, 1.280F–7)

Rev. Proc. 2000-18

SECTION 1. PURPOSE

This revenue procedure provides: (1)

limitations on depreciation deductions for

owners of passenger automobiles first

placed in service during calendar year

2000, including separate limitations on

passenger automobiles designed to be

propelled primarily by electricity and

built by an original equipment manufacturer (electric automobiles); (2) the

amounts to be included in income by

lessees of passenger automobiles first

leased during calendar year 2000, including separate inclusion amounts for electric automobiles; and (3) the maximum

allowable value of employer-provided automobiles first made available to employees for personal use in calendar year 2000

for which the vehicle cents-per-mile valuation rule provided under § 1.61-21(e) of

the Income Tax Regulations may be applicable. The tables detailing these depreciation limitations and lessee inclusion

amounts reflect the automobile price inflation adjustments required by §

280F(d)(7) of the Internal Revenue Code.

The maximum allowable automobile

value for applying the vehicle cents-permile valuation rule reflects the automobile price inflation adjustment of §

280F(d)(7) as required by § 1.6121(e)(1)(iii)(A).

SECTION 2. BACKGROUND

For owners of automobiles, § 280F(a)

imposes dollar limitations on the depreciation deduction for the year that the automobile is placed in service and each succeeding year. In the case of electric

automobiles placed in service after August 5, 1997, and before January 1, 2005,

§ 280F(a)(1)(C) requires tripling of these

limitation amounts. Section 280F(d)(7)

requires the amounts allowable as depreciation deductions to be increased by a

price inflation adjustment amount for passenger automobiles placed in service after

1988.

February 28, 2000

For leased automobiles, § 280F(c) requires a reduction in the deduction allowed to the lessee of the automobile.

The reduction must be substantially

equivalent to the limitations on the depreciation deductions imposed on owners of

automobiles. Under § 1.280F-7(a), this

reduction requires the lessees to include

in gross income an inclusion amount determined by applying a formula to the

amount obtained from a table. There is a

table for lessees of electric automobiles

and a table for all other passenger automobiles. Each table shows inclusion

amounts for a range of fair market values

for each tax year after the automobile is

first leased.

For automobiles first provided by employers to employees that meet the requirements of § 1.61-21(e)(1), the value

to the employee of the use of the automobile may be determined under the vehicle

cents-per-mile valuation rule of § 1.6121(e). Section 1.61-21(e)(1)(iii)(A) provides that for an automobile first made

available after 1988 to any employee of

the employer for personal use, the value

of the use of the automobile may not be

determined under the vehicle cents-permile valuation rule for a calendar year if

the fair market value of the automobile

(determined pursuant to § 1.6121(d)(5)(i) through (iv)) on the first date

the automobile is made available to the

employee exceeds $12,800 as adjusted by

§ 280F(d)(7).

SECTION 3. SCOPE AND OBJECTIVE

01. The limitations on depreciation deductions in section 4.02 of this revenue

procedure apply to automobiles (other

than leased automobiles) that are placed

in service in calendar year 2000 and continue to apply for each tax year that the

automobile remains in service.

02. The tables in section 4.03 of this

revenue procedure apply to leased automobiles for which the lease term begins in

calendar year 2000. Lessees of such automobiles must use these tables to determine the inclusion amount for each tax

year during which the automobile is

leased.

03. See Rev. Proc. 96-25, 1996-1 C.B.

681, for information on determining in-

722

clusion amounts for automobiles first

leased before January 1, 1997; Rev. Proc.

97-20, 1997-1 C.B. 647, for automobiles

first leased during calendar year 1997, including electric automobiles first leased

on or after January 1, 1997, and before

August 6, 1997; Rev. Proc. 98-24, 1998-1

C.B. 663, for electric automobiles first

leased after August 5, 1997, and before

January 1, 1998; Rev. Proc. 98-30, 1998-1

C.B. 930, for all automobiles first leased

in calendar year 1998; and Rev. Proc. 9914, 1999-5 I.R.B. 56, for all automobiles

first leased in calendar year 1999.

04. The maximum fair market value

figure in section 4.04(2) of this revenue

procedure applies to employer-provided

automobiles first made available to any

employee for personal use in calendar

year 2000. See Rev. Proc. 97-20, for the

maximum fair market value figure for automobiles first made available in calendar

year 1997; Rev. Proc. 98-30, for the maximum fair market value figure for automobiles first made available in calendar year

1998; and Rev. Proc. 99-14, for the maximum fair market value figure for automobiles first made available in calendar year

1999.

SECTION 4. APPLICATION

01. A taxpayer placing an automobile

in service for the first time during calendar year 2000 is limited to the depreciation deduction shown in Table 1 of section 4.02(2) of this revenue procedure or,

in the case of an electric automobile,

Table 2 of this revenue procedure. A taxpayer first leasing an automobile in calendar year 2000 must determine the inclusion amount that is added to gross income

using Table 3 of section 4.03 of this revenue procedure or, in the case of an electric automobile, Table 4 of this revenue

procedure. In addition, the procedures of

§ 1.280F-7(a) must be followed. An employer providing an automobile for the

first time in calendar year 2000 for the

personal use of any employee may determine the value of the use of the automobile by using the cents-per-mile valuation

rule in § 1.61-21(e) if the fair market

value of the automobile does not exceed

the amount specified in section 4.04(2) of

this revenue procedure. If the fair market

2000–9 I.R.B.

value of the automobile exceeds the

amount specified in section 4.04(2) of this

revenue procedure, the employer may determine the value of the use of the automobile under the general valuation rules

of § 1.61-21(b) or under the special valuation rules of § 1.61-21(d) (Automobile

lease valuation) or § 1.61-21(f) (Commuting valuation) if the applicable requirements are met.

02. Limitations on Depreciation Deductions for Certain Automobiles.

(1) Amount of the Inflation Adjustment. Under § 280F(d)(7)(B)(i), the automobile price inflation adjustment for any

calendar year is the percentage (if any) by

which the CPI automobile component for

October of the preceding calendar year

exceeds the CPI automobile component

for October 1987. The term “CPI automobile component” is defined in §

280F(d)(7)(B)(ii) as the “automobile

component” of the Consumer Price Index

for all Urban Consumers published by the

Department of Labor (the CPI). The new

car component of the CPI was 115.2 for

October 1987 and 138.8 for October

1999. The October 1999 index exceeded

the October 1987 index by 23.6. The Internal Revenue Service has, therefore, determined that the automobile price inflation adjustment for 2000 is 20.49 percent

(23.6/115.2 x 100%). This adjustment is

applicable to all automobiles that are first

placed in service in calendar year 2000.

The dollar limitations in § 280F(a) must

therefore be multiplied by a factor of

0.2049, and the resulting increases, after

rounding to the nearest $100, are added to

the 1988 limitations to give the depreciation limitations applicable to passenger

automobiles (other than electric automo-

biles) for calendar year 2000. To determine the dollar limitations applicable to

an electric automobile first placed in service during calendar year 2000, the dollar

limitations in § 280F(a) are tripled in accordance with § 280F(a)(1)(C) and are

then multiplied by a factor of 0.2049; the

resulting increases, after rounding to the

nearest $100, are added to the tripled

1988 limitations to give the depreciation

limitations for calendar year 2000.

(2) Amount of the Limitation. For

automobiles (other than electric automobiles) placed in service in calendar year

2000, Table 1 of this revenue procedure

contains the dollar amount of the depreciation limitations for each tax year. For

electric automobiles placed in service in

calendar year 2000, Table 2 of this revenue procedure contains these amounts.

REV. PROC. 2000-18, TABLE 1

DEPRECIATION LIMITATIONS FOR AUTOMOBILES

(OTHER THAN ELECTRIC AUTOMOBILES)

FIRST PLACED IN SERVICE IN CALENDAR YEAR 2000

Tax Year

Amount

1st Tax Year

2nd Tax Year

3rd Tax Year

Each Succeeding Year

$3,060

$4,900

$2,950

$1,775

REV. PROC. 2000-18, TABLE 2

DEPRECIATION LIMITATIONS FOR ELECTRIC AUTOMOBILES

FIRST PLACED IN SERVICE IN CALENDAR YEAR 2000

Tax Year

Amount

1st Tax Year

2nd Tax Year

3rd Tax Year

Each Succeeding Year

$9,280

$14,800

$8,850

$5,325

03. Inclusions in Income of Lessees of

Automobiles.

The inclusion amounts for automobiles

first leased in calendar year 2000 are cal-

2000–9 I.R.B.

culated under the procedures described in

§ 1.280F-7(a). Lessees of automobiles

other than electric automobiles should use

Table 3 of this revenue procedure in ap-

723

plying these procedures, while lessees of

electric automobiles should use Table 4 of

this revenue procedure.

February 28, 2000

REV. PROC. 2000-18, TABLE 3

DOLLAR AMOUNTS FOR AUTOMOBILES (OTHER THAN ELECTRIC AUTOMOBILES)

WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2000

Fair Market Value

of Automobile

Tax Year During Lease

Over

Not Over

$ 15,500

15,800

16,100

16,400

16,700

17,000

17,500

18,000

18,500

19,000

19,500

20,000

20,500

21,000

21,500

22,000

23,000

24,000

25,000

26,000

27,000

28,000

29,000

30,000

31,000

32,000

33,000

34,000

35,000

36,000

37,000

38,000

39,000

40,000

41,000

42,000

43,000

44,000

45,000

46,000

47,000

48,000

49,000

50,000

51,000

52,000

53,000

15,800

16,100

16,400

16,700

17,000

17,500

18,000

18,500

19,000

19,500

20,000

20,500

21,000

21,500

22,000

23,000

24,000

25,000

26,000

27,000

28,000

29,000

30,000

31,000

32,000

33,000

34,000

35,000

36,000

37,000

38,000

39,000

40,000

41,000

42,000

43,000

44,000

45,000

46,000

47,000

48,000

49,000

50,000

51,000

52,000

53,000

54,000

February 28, 2000

1st

2nd

3rd

4th

5th and

Later

3

5

8

10

13

16

20

25

29

33

37

41

45

50

54

60

68

77

85

93

102

110

119

127

135

144

152

160

169

177

185

194

202

210

219

227

235

244

252

260

269

277

285

294

302

311

319

6

12

17

23

28

36

45

54

63

72

81

91

100

109

118

132

150

168

187

205

223

241

259

278

296

314

333

351

369

388

406

424

443

461

479

497

516

534

552

571

589

607

626

644

662

680

699

9

17

25

33

42

52

66

79

93

107

121

133

147

160

174

194

222

249

276

303

330

358

385

412

439

467

493

521

548

574

602

629

656

683

710

738

765

792

819

846

873

901

927

954

982

1,009

1,036

10

20

30

40

49

62

78

95

111

127

143

160

176

193

209

234

266

298

331

364

396

429

461

493

527

558

591

623

656

689

721

754

786

819

852

884

916

949

982

1,014

1,047

1,079

1,112

1,145

1,177

1,210

1,242

12

23

34

45

57

72

91

109

128

147

166

185

204

222

241

269

306

345

381

419

457

494

532

570

607

645

683

720

757

795

833

870

908

946

983

1,021

1,058

1,095

1,133

1,171

1,208

1,246

1,284

1,321

1,359

1,396

1,433

724

2000–9 I.R.B.

REV. PROC. 2000-18, TABLE 3 (Cont’d.)

DOLLAR AMOUNTS FOR AUTOMOBILES (OTHER THAN ELECTRIC AUTOMOBILES)

WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2000

Fair Market Value

of Automobile

Tax Year During Lease

Over

Not Over

54,000

55,000

56,000

57,000

58,000

59,000

60,000

62,000

64,000

66,000

68,000

70,000

72,000

74,000

76,000

78,000

80,000

85,000

90,000

95,000

100,000

110,000

120,000

130,000

140,000

150,000

160,000

170,000

180,000

190,000

200,000

210,000

220,000

230,000

240,000

55,000

56,000

57,000

58,000

59,000

60,000

62,000

64,000

66,000

68,000

70,000

72,000

74,000

76,000

78,000

80,000

85,000

90,000

95,000

100,000

110,000

120,000

130,000

140,000

150,000

160,000

170,000

180,000

190,000

200,000

210,000

220,000

230,000

240,000

250,000

2000–9 I.R.B.

1st

2nd

3rd

4th

5th and

Later

327

336

344

352

361

369

381

398

415

432

448

465

482

498

515

532

561

603

644

686

749

832

916

999

1,083

1,166

1,250

1,333

1,416

1,500

1,583

1,667

1,750

1,834

1,917

717

735

754

772

790

808

836

873

909

945

982

1,019

1,055

1,092

1,129

1,165

1,229

1,320

1,412

1,504

1,641

1,824

2,006

2,190

2,372

2,556

2,738

2,921

3,105

3,287

3,470

3,653

3,836

4,019

4,202

1,063

1,090

1,117

1,145

1,172

1,199

1,240

1,294

1,348

1,403

1,457

1,511

1,566

1,620

1,673

1,728

1,823

1,959

2,095

2,230

2,433

2,705

2,977

3,248

3,520

3,790

4,062

4,334

4,605

4,877

5,148

5,419

5,691

5,962

6,233

1,275

1,308

1,340

1,372

1,405

1,438

1,486

1,551

1,617

1,681

1,747

1,811

1,876

1,942

2,007

2,072

2,186

2,349

2,511

2,674

2,918

3,243

3,569

3,894

4,219

4,545

4,871

5,196

5,521

5,846

6,172

6,498

6,823

7,148

7,474

1,471

1,508

1,546

1,584

1,621

1,659

1,715

1,790

1,865

1,941

2,016

2,092

2,166

2,241

2,317

2,392

2,523

2,711

2,899

3,087

3,369

3,745

4,120

4,496

4,872

5,248

5,623

5,998

6,374

6,750

7,126

7,501

7,877

8,253

8,629

725

February 28, 2000

REV. PROC. 2000-18, TABLE 4

DOLLAR AMOUNTS FOR ELECTRIC AUTOMOBILES

WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2000

Fair Market Value

of Automobile

Tax Year During Lease

Over

Not Over

$ 47,000

48,000

49,000

50,000

51,000

52,000

53,000

54,000

55,000

56,000

57,000

58,000

59,000

60,000

62,000

64,000

66,000

68,000

70,000

72,000

74,000

76,000

78,000

80,000

85,000

90,000

95,000

100,000

110,000

120,000

130,000

140,000

150,000

160,000

170,000

180,000

190,000

200,000

210,000

220,000

230,000

240,000

48,000

49,000

50,000

51,000

52,000

53,000

54,000

55,000

56,000

57,000

58,000

59,000

60,000

62,000

64,000

66,000

68,000

70,000

72,000

74,000

76,000

78,000

80,000

85,000

90,000

95,000

100,000

110,000

120,000

130,000

140,000

150,000

160,000

170,000

180,000

190,000

200,000

210,000

220,000

230,000

240,000

250,000

February 28, 2000

1st

2nd

3rd

4th

5th and

Later

7

14

20

27

33

39

46

52

59

65

72

78

85

95

107

120

133

146

159

172

185

198

211

234

266

298

331

379

444

509

574

638

703

768

833

897

962

1,027

1,092

1,156

1,221

1,286

17

31

45

59

74

88

102

116

130

145

159

173

187

208

237

266

294

322

351

379

407

436

464

514

585

656

727

834

975

1,117

1,259

1,402

1,543

1,685

1,827

1,970

2,112

2,253

2,395

2,538

2,680

2,821

26

47

69

90

110

132

153

174

195

216

237

258

279

311

353

394

437

480

521

564

606

648

690

763

869

975

1,080

1,237

1,449

1,660

1,870

2,080

2,292

2,503

2,713

2,923

3,134

3,346

3,556

3,766

3,977

4,189

32

57

82

107

133

157

183

209

234

259

284

310

335

373

423

474

524

574

625

675

727

777

828

916

1,042

1,168

1,295

1,485

1,737

1,990

2,243

2,496

2,748

3,000

3,254

3,506

3,759

4,011

4,264

4,517

4,769

5,022

36

66

95

124

153

183

211

240

270

299

328

357

387

430

489

547

606

664

723

781

838

897

955

1,058

1,204

1,350

1,495

1,714

2,006

2,297

2,589

2,881

3,173

3,465

3,756

4,049

4,340

4,632

4,924

5,215

5,507

5,798

726

2000–9 I.R.B.

04. Maximum Automobile Value for

Using the Cents-per- mile Valuation Rule.

(1) Amount of Adjustment. Under §

1.61-21(e)(1)(iii)(A), the limitation on the

fair market value of an employer-provided

automobile first made available to any employee for personal use after 1988 is to be

adjusted in accordance with § 280F(d)(7).

Accordingly, the adjustment for any calendar year is the percentage (if any) by which

the CPI automobile component for October

of the preceding calendar year exceeds the

CPI automobile component for October

1987. See, section 4.02(1) of this revenue

procedure. The new car component of the

CPI was 115.2 for October 1987 and 138.8

for October 1999. The October 1999 index

exceeded the October 1987 index by 23.6.

The Internal Revenue Service has, therefore, determined that the adjustment for

2000 is 20.49 percent (23.6/115.2 x 100%).

This adjustment is applicable to all employer-provided automobiles first made

available to any employee for personal use

in calendar year 2000. The maximum fair

market value specified in § 1.6121(e)(1)(iii)(A) must therefore be multiplied by a factor of 0.2049, and the resulting increase, after rounding to the nearest

$100, is added to $12,800 to give the maximum value for calendar year 2000.

(2) The Maximum Automobile Value.

For automobiles first made available in

calendar year 2000 to any employee of

the employer for personal use, the vehicle

cents-per-mile valuation rule may be applicable if the fair market value of the automobile on the date it is first made available does not exceed $15,400.

SECTION 5. EFFECTIVE DATE

This revenue procedure applies to automobiles (other than leased automobiles)

that are first placed in service during calendar year 2000, to leased automobiles

that are first leased during calendar year

2000, and to employer-provided automobiles first made available to employees

for personal use in calendar year 2000.

DRAFTING INFORMATION

The principal author of this revenue procedure is Bernard P. Harvey of the Office

of the Assistant Chief Counsel

(Passthroughs and Special Industries). For

further information regarding the depreciation limitations and lessee inclusion

amounts in this revenue procedure, contact

Mr. Harvey at (202) 622-3110; for further

information regarding the maximum automobile value for applying the vehicle

Month

Year

Weighted

Average

February

2000

6.03

Drafting Information

The principal author of this notice is

Todd Newman of Employee Plans, Tax Exempt and Government Entities Division.

For further information regarding this notice, call the Employee Plans Actuarial hotline, (202) 622-6076 between 2:30 and

3:30 p.m. Eastern time (not a toll-free number). Mr. Newman’s number is (202) 6228458 (also not a toll-free number).

Pre-Filing Agreements Pilot

Program

Notice 2000-12

1. INTRODUCTION OF PILOT

PROGRAM

2000–9 I.R.B.

Weighted Average Interest Rate

Update

Notice 2000-2

Notice 88-73 provides guidelines for

determining the weighted average interest

rate and the resulting permissible range of

interest rates used to calculate current liability for the purpose of the full funding

limitation of § 412(c)(7) of the Internal

Revenue Code as amended by the Omnibus Budget Reconciliation Act of 1987

and as further amended by the Uruguay

Round Agreements Act, Pub. L. 103-465

(GATT).

The average yield on the 30-year Treasury Constant Maturities for January 2000

is 6.63 percent.

The following rates were determined

for the plan years beginning in the month

shown below.

90% to 105%

Permissible

Range

90% to 110%

Permissible

Range

5.43 to 6.34

5.43 to 6.64

This Notice announces a pilot program

for Pre-Filing Agreements (PFAs), under

which large business taxpayers may request examination and resolution of specific issues relating to tax returns they expect to file between September and

December, 2000. The purpose of the program is to enable both taxpayers and the

Internal Revenue Service (IRS) to resolve

before filing the treatment of issues otherwise likely to be disputed in post-filing

audits. Through a cooperative effort, the

program is intended to reduce the costs,

burden and delays encountered in post-filing examinations.

The program is administered by the Large

and Mid-size Business Division (LMSB)

of the IRS. In its pilot phase, the program

is open to large businesses that currently

have a Coordinated Examination Team on

site. Taxpayers interested in participating

727

cents-per-mile valuation rule, contact Ms.

Lynne Camillo of the Office of the Associate Chief Counsel (Employee Benefits and

Exempt Organizations) at (202) 622-6040

(not toll-free calls).

in the pilot program, or with questions

about the program and its suitability to

their situation, should contact their on site

Case Manager as soon as possible, and

are encouraged to apply on or before

March 15, 2000, to ensure their application will be given full consideration.

LMSB is willing to meet with taxpayers

considering participation in the program

to answer questions and explore the desirability of their participation.

During the pilot phase of the program,

LMSB plans to select approximately five

to ten taxpayers from among those requesting participation in the program.

LMSB will select participants as soon as

possible after March 15, 2000, and provide taxpayers and audit teams an orientation about the program. The team will

work with the selected taxpayer with the

expectation of resolving the designated

February 28, 2000

issue by the taxpayer’s filing deadline.

Taxpayers participating in the pilot program will be asked to assist in monitoring

and evaluating the process. After completing the pilot cases, the IRS will evaluate the program, and may then offer the

program, after further modification, on a

permanent basis.

The IRS believes that the PFA program

offers significant potential benefits for

taxpayers as well as the IRS, and invites

large business taxpayers to participate in

this program.

2. DESCRIPTION OF A PRE-FILING

AGREEMENT

A PFA is a closing agreement under § 7121

of the Internal Revenue Code between the

IRS and taxpayer relating to one or more

specific issues arising from transactions entered into by the taxpayer during a taxable

period ending prior to the date of the agreement. The agreement specifies the treatment of the transaction(s) on a tax return to

be filed by the taxpayer subsequent to the

date of the agreement. A PFA may also resolve related specific items affecting other

taxable periods. See Rev. Proc. 68-16,

1968-1 C.B. 770, which describes the

preparation of closing agreements under §

7121.

The PFA’s application of the law to the

taxpayer’s facts may result in treating an

item differently from earlier treatments of

similar items in prior taxable years (e.g.,

deducting items that previously were capitalized, such as certain ISO 9000 costs).

If so, the differing treatment may constitute a change in the method of accounting

for that item. The PFA will resolve only

the factual characterization of the items at

issue, but will not constitute the Commissioner’s consent to make any accounting

method change that may be required to

conform the agreed upon treatment of the

item with identical items in earlier years.

Permission to make any accounting

method changes required by the PFA’s

resolution of the factual and legal issues

must be obtained using the applicable administrative procedures. See Rev. Proc.

99-49, 1999-52 I.R.B. 725 (automatic

consent to change certain accounting

methods); Rev. Proc. 97-27, 1997-1 C.B.

680.

3. SUBJECT MATTER OF AN LMSB

PRE-FILING AGREEMENT

February 28, 2000

In general. The PFA program is intended

to advance the resolution of issues that are

otherwise likely to be disputed in post-filing audits. The program is intended to

reach agreement on factual issues and

apply settled legal principles to those facts.

In such cases, the presence of an LMSB

audit team on site shortly after the completion of the transaction is most likely to enhance the prospects for an agreed resolution of the issue. Questions concerning the

correct interpretation of legal rules the interpretation of which is not well settled are

more properly presented in requests for private letter rulings. See Rev. Proc. 2000-1,

2000-1 I.R.B. 4. Moreover, the program is

not available to settle disagreements between a taxpayer and the IRS over the correct interpretation of the tax laws (except as

authorized under Delegation Order No. 236

or 247 regarding settlement guidelines).

The IRS will consider entering into a PFA

on any issue involving the application of

settled legal principles requested by the taxpayer, except as noted below. Issuance of a

PFA is discretionary with the LMSB Industry Director. A PFA cannot resolve issues

for taxpayers or years outside the jurisdiction of LMSB. In evaluating whether to

proceed with the PFA process and to enter

into a PFA, the IRS will determine that the

issue presented is consistent with the overall goals of the program stated above.

Examples. The following are examples

of issues likely to be suitable for resolution through the PFA program:

(1) The valuation of assets (except in

the context of transfer pricing), and

the allocation of the purchase or

sale price of a business among the

assets acquired or sold;

(2) The identification and documentation of hedging transactions;

(3) Issues relating to in-house research

expenses under section 41;

(4) The allocation of costs among different categories of deductible and

capitalizable items in contexts in

which there is a published revenue

ruling, e.g., repairs (Rev. Rul. 9412, 1994-1 C.B. 36), advertising

(Rev. Rul. 92-80, 1992-2 C.B. 57),

and Y2K costs (Rev. Proc. 97-50,

1997-2 C.B. 525);

(5) The determination of which costs

are investigatory costs incurred to

determine whether to enter a new

business and which business to

728

enter for purposes of qualifying as

start-up costs under § 195 (see Rev.

Rul. 99-23, 1999-20 I.R.B. 3);

(6) The determination of ‘market’ for

taxpayers using the lower of cost or

market method of inventory valuation in situations involving inactive

markets. See § 1.471-4(b);

(7) Whether a taxpayer ’s financial

statement preparation of its last-in,

first-out (LIFO) inventory is consistent with the LIFO conformity requirement under § 1.472-2(e);

(8) Whether a taxpayer’s inventory

contains ‘sub-normal’ goods within

the meaning of § 1.471-2(c) and the

valuation placed thereon;

(9) Whether a taxpayer is considered

the tax owner of the property being

produced under § 1.263A2(a)(1)(ii)(A);

(10) Whether a manufacturing contract

newly entered into by a taxpayer is

required to be accounted for as a

long-term contract under § 460; and

(11) The determination of appropriate

asset classes for depreciable property placed in service during the

taxable period.

Excluded subjects. A PFA will not be

entered into with respect to the following

issues:

(1) Issues that can be included in an

Advance Pricing Agreement under

Rev. Proc. 96-53, 1996-2 C.B. 375,

(e.g., transfer pricing);

(2) Issues that can be resolved by requesting a change in accounting

method on Form 3115;

(3) Issues under the jurisdiction of the

Commissioner, Tax Exempt and

Government Entities Division (e.g.,

employee plans);

(4) Issues regarding transactions that

lack a bona fide business purpose or

have as their principal purpose the

reduction of federal taxes;

(5) The satisfaction, for purposes of

Subtitle F (Procedure and Administration), of reasonable cause, due

diligence, good faith, clear and convincing evidence, or any similar

standard; and

(6) The applicability of any penalty or

criminal sanction.

Excluded circumstances. In addition,

the IRS will not entertain a request for a

PFA in the following circumstances:

2000–9 I.R.B.

(1)

The issue (for the taxpayer) involves a partnership item as defined

in § 6231, or is subject to the procedures set forth in § 6221 through §

6233.

(2) The issue is or will be the subject of

a pending or contemporaneous request for a private letter ruling or a

change in accounting method by the

taxpayer;

(3) The taxpayer’s proposed resolution

of the issue is contrary to a private

letter ruling, technical advice memorandum, or closing agreement previously issued to or regarding the

taxpayer;

(4) The taxpayer’s proposed resolution

of the issue is contrary to a position

adverse to the taxpayer proposed by

the IRS in response to a private letter ruling (or accounting method

change) request that was withdrawn

by the taxpayer; or

(4) The issue is the subject of litigation

(or has been designated for litigation by the Office of Chief Counsel)

between the IRS and the taxpayer

with respect to an earlier taxable

period.

For the purposes of these excluded circumstances, any reference to the taxpayer also

includes a related taxpayer and any predecessor of the taxpayer or a related taxpayer.

A related taxpayer is one related within the

meaning of § 267 or a member of an affiliated group within the meaning of § 1504

that includes the taxpayer. A predecessor is

an entity the tax liability of which the taxpayer or a related taxpayer is or was primarily or secondarily liable.

4. PROCEDURES FOR

REQUESTING AN LMSB PREFILING AGREEMENT

Before initiating a formal request. Taxpayers interested in participating in the

pilot program, or with questions about the

program and its suitability to their situation, should contact the LMSB Case Manager supervising the audit of the return

currently under examination as soon as

possible. Taxpayers also may contact

John Petrella, the PFA Program Manager,

at (202) 283-8390 (not a toll-free number), for further information about the

PFA program.

Initiating the request. After discussing

the proposed request with their Case

2000–9 I.R.B.

Manager, the taxpayer must submit a request for a PFA in writing through the

Case Manager to the LMSB Industry Director. Taxpayers are encouraged to submit the request on or before March 15,

2000, to ensure their application will be

given full consideration. The PFA Program Manager and the Case Manager are

available to assist in the preparation of the

submission.

Contents of the request. The written

statement requesting a PFA should concisely:

(1) Provide the taxpayer’s name, EIN,

and address and the name, title, address and telephone number of a

person to contact;

(2) Provide the Case Manager’s name

and telephone number;

(3) Identify the taxable period for

which the PFA is sought, the last

date on which the taxpayer may file

(with extensions) a timely return for

that period, and (if earlier) the date

on which the taxpayer intends to

file that return;

(4) Describe the issue(s) for which the

PFA is sought. Summarize the material facts and state the legal

issue(s) involved. For the purpose

of ascertaining that the issue involves the application of settled

law, discuss the taxpayer’s interpretation of these legal rules and their

proposed application to the facts in

question;

(5) Discuss the suitability of the issue

for the PFA program in light of the

purposes and criteria set forth in

section 3, above;

(6) Represent that the issue is not described in any of the “Excluded Circumstances” listed in section 3,

above;

(7) Discuss whether the resolution of

this issue will have any effect in

taxable periods either before or

after the taxable period for which

the PFA is sought;

(8) State whether the taxpayer has ever

applied, or intends to apply, for

Competent Authority assistance

with respect to the issue for the year

in question or any prior year;

(9) Discuss whether the issue identified

can be resolved through a PFA by

the date on which the taxpayer intends to file its return for the tax-

729

able period in question;

(10) Describe the organization and location of the records and other evidence that substantiate the taxpayer’s proposed position on the

issue;

(11) State that the taxpayer agrees that

the inspection of records and testimony under the PFA procedures

will not preclude or impede (under

§ 7605(b) or any administrative

provisions adopted by the IRS) a

later examination of a return or inspection of records with respect to

any tax year needed to resolve the

issue(s) in the request for a PFA,

and that the IRS need not comply

with any applicable procedural restrictions (such as providing notice

under § 7605(b)) before beginning

such examination or inspection; and

(12) Indicate the taxpayer’s willingness

to participate in a pilot program and

to assist in monitoring and evaluating the process.

Perjury statement. A request for a PFA,

and any supplemental submission (including additional documents), must include a

declaration, signed by a person currently

authorized to sign the taxpayer’s federal

income tax return, in the following form:

Under penalties of perjury, I declare

that I have examined this request, including accompanying documents,

and, to the best of my knowledge and

belief, the facts presented in support of

the request for the Pre-Filing Agreement are true, correct and complete.

Signature. The request for a PFA must

be signed by the taxpayer or the taxpayer’s authorized representative. If the

request is signed by an authorized representative, a copy of Form 2848, Power of

Attorney and Declaration of Representative, must accompany the request.

No user fee. During the pilot phase of

this program, no user fee is required to request a PFA.

5. PROCEDURES FOR SELECTING

TAXPAYERS FOR THE PILOT

PROGRAM

Case Manager’s role. Case Managers will

inform the PFA Program Manager of all instances in which taxpayers express interest

in participation in the program, and will

forward a copy of any written request to the

LMSB Industry Director and the PFA Pro-

February 28, 2000

gram Manager. The Case Manager will

also submit to the LMSB Industry Director

a recommendation as to whether LMSB

should proceed with the PFA request. The

Case Manager should discuss, in particular,

the IRS resources required (including any

specialists or outside consultants), the ability to coordinate the PFA process with the

examination of the taxpayer’s previously

filed returns, the availability of taxpayer

records and personnel, and the probability

of completing examination of the issue in a

timely manner. If the Case Manager plans

to recommend against proceeding with

consideration of the PFA request, the Case

Manager will discuss the proposed recommendation with the taxpayer before submitting the recommendation.

LMSB Industry Director’s decision. The

LMSB Industry Director with jurisdiction

over the taxpayer will make the final decision as to whether to proceed with the taxpayer’s request towards resolution through

the PFA program. Criteria for selecting

taxpayers to participate in the pilot phase of

the PFA program include:

(1) The suitability of the issue presented for the program;

(2) The direct or indirect impact of a

PFA upon other years, issues, taxpayers, or related cases;

(3) Providing a cross-section of issues

and industries for the pilot; and

(4) The probability of completing the

examination of the issue and entering into a PFA by the target date.

Communication with taxpayer. The

LMSB Industry Director or Field Operations Director will contact the taxpayer

within 14 days of receipt of the request to

discuss the potential suitability of the requested issue for inclusion in the pilot

program. Thereafter, LMSB will inform

the taxpayer in writing of LMSB Industry

Director’s decision to accept or reject the

issue(s) for consideration in the PFA pilot

program. A taxpayer is not entitled to a

conference to appeal an LMSB Industry

Director’s decision not to go forward with

the PFA process. A taxpayer not selected

for the pilot program remains eligible for

other procedures for early issue resolution, including the Accelerated Issue Resolution (AIR) program (see Rev. Proc. 9467, 1994-2 C.B. 800).

6. PROCESSING A REQUEST FOR

AN LMSB PRE-FILING

AGREEMENT

February 28, 2000

Consultation with taxpayer. If the IRS

accepts the request for consideration, the

LMSB Industry Director or Field Operations Director, will contact the taxpayer to

discuss scheduling an orientation program

about the PFA process with the taxpayer

and the audit team. This will initiate a

planning process for factual development

and issue resolution with respect to the

issue(s) accepted for consideration. In

this planning process, the IRS and the taxpayer will seek to agree on a proposed

time-frame, the identification of relevant

records and testimony, IRS access to

records and testimony, and, ultimately, the

potential scope and nature of the proposed

agreement(s),

Factual and issue development. After

acceptance by the LMSB Industry Director, the Case Manager will contact the

taxpayer to discuss any questions that the

IRS may have, to ask for any additional

information needed to process the request, to verify data supplied, or to request additional supporting data. True

copies of all contracts, agreements, instruments and other documents, as well as

testimony pertaining to a request for a

PFA must be submitted by the taxpayer

upon request. The issues will be developed and facts confirmed consistent with

auditing standards and all other applicable

rules and regulations in effect regarding

proper auditing techniques. The audit

team will work closely with the taxpayer

to resolve the issue.

Audit Team recommendation. After developing the facts and issues, the Case

Manager will prepare a recommendation

for the LMSB Industry Director about entering into a PFA with the taxpayer. Before submitting the recommendation to

the LMSB Industry Director, the Case

Manager will provide the proposed recommendation to the taxpayer. If the taxpayer disagrees with the Case Manager’s

proposed recommendation, the Case

Manager will offer the taxpayer an opportunity for a conference before submitting

the recommendation to the LMSB Industry Director.

Coordination with other functions. In

considering the request for a PFA, the

LMSB Industry Director will obtain approval from, or coordinate with, all appropriate IRS functions as necessary or, in

his judgment, desirable.

Program Manager and Chief Counsel

730

review. The LMSB Industry Director

will submit any proposed PFA to the PFA

Program Manager, and through the PFA

Program Manager to the Office of Chief

Counsel, for review before it is executed.

Conference with LMSB Industry Director. If the Case Manager recommends

entering into a PFA on terms agreed to by

the taxpayer, but the LMSB Industry Director is tentatively unwilling to enter into

such a agreement, the LMSB Industry Director will offer the taxpayer an opportunity for a conference before rejecting all

or part of a proposed PFA. In all other

cases, the LMSB Industry Director is not

obligated to offer the taxpayer such a conference, although the taxpayer may request one.

Executing the PFA. The LMSB Industry

Director may execute a PFA if the LMSB

Industry Director determines:

(1) That entering into the PFA is consistent with the goals of the PFA

program as stated in this Notice;

(2) That the tax results provided for in

the PFA reflect settled legal principles and correctly apply those principles (or positions authorized

under Delegation Order No. 236 or

247) to the facts found by the Audit

Team; and

(3) That there appears to be an advantage in having the issue(s) permanently and conclusively closed for

the taxable period covered by the

PFA, or that the taxpayer shows

good and sufficient reasons for desiring a closing agreement and that

the United States will sustain no

disadvantage through consummation of such an agreement (see §

301.7121-1(a) of the Regulations

on Procedure and Administration).

Return filing requirements not affected. The IRS’ acceptance of a taxpayer’s request to attempt to reach a PFA

on specified issue(s) does not suspend or

waive the normal filing requirements for

any tax returns that are affected by the

proposed PFA. In the event that a PFA is

reached prior to the filing of the return,

the taxpayer will report the transaction(s)

addressed in the PFA in accordance with

the terms of the PFA.

Continuation of process after filing, coordination with Accelerated Issue Resolution procedure, and Appeals. If a

PFA is not executed prior to the filing of

2000–9 I.R.B.

the return(s), the IRS and the taxpayer

may continue to attempt to resolve the

issue and enter into a PFA under these

procedures until July 31, 2001. If, as of

July 31, 2001, the IRS and taxpayer have

not entered into a PFA and the IRS disagrees with the taxpayer’s claimed tax

treatment of the transaction(s), the taxpayer and the IRS can continue the effort

to reach an agreement using AIR procedures under Rev. Proc. 94-67, 1994-2

C.B. 800. This continuation of the issue

resolution process does not require a new

application. In addition to the AIR procedures, the taxpayer retains the right to

pursue administrative appeal either by requesting an Early Referral to Appeals, or

by protesting any proposed deficiency related to the issue.

7. WITHDRAWAL FROM THE PFA

PROCESS

Withdrawal by the taxpayer or the

LMSB Industry Director. At any time

prior to the execution of the PFA by the

LMSB Industry Director, either the taxpayer or the LMSB Industry Director may

withdraw all or part of the request for a

PFA from consideration. The withdrawal

must be communicated in writing.

Effect of withdrawal. Notwithstanding

the withdrawal by either the taxpayer or

the LMSB Industry Director of any or all

of the issues in the request for a PFA, the

taxpayer’s agreement that the inspection

of records and testimony under the PFA

procedures will not preclude or impede

(under § 7605(b) or any administrative

provisions adopted by the IRS) a later examination of a return or inspection of

records with respect to any tax year

needed to resolve the issue(s) in the request for a PFA, and that the IRS need not

comply with any applicable procedural

restrictions (such as providing notice

under § 7605(b)) before beginning such

examination or inspection, will remain effective.

Availability of Early Referral to Appeals. If the taxpayer and the IRS are unable to reach either a PFA or an AIR

agreement, the possibility of forwarding

the disputed issues to Appeals may be

available under the Early Referral to Appeals procedures set forth in Rev. Proc.

99-28, 1999-29 I.R.B. 109.

8. FORM AND CONTENT OF A PRE-

2000–9 I.R.B.

FILING AGREEMENT

A PFA between the taxpayer and the IRS

is a closing agreement under § 7121. See

Rev. Proc. 68-16, 1968-1 C.B. 770, for

further information on the form and content of a closing agreement. A PFA must

comply with the requirements of Rev.

Proc. 68-16. The PFA will be prepared by

the taxpayer and the examination team

with assistance, as necessary, from the

PFA Program Manager, the Office of

Chief Counsel, or other IRS personnel.

9. DISCLOSURE

PFAs are closing agreements entered into

pursuant to I.R.C. § 7121. As such, it is

the position of the IRS that both PFAs and

the information generated or received by

the IRS during the PFA process constitute

confidential return information as defined

by I.R.C. § 6103(b)(2)(A), that PFAs are

not written determinations under I.R.C. §

6110, and, accordingly, are exempt from

disclosure to the public under the Freedom of Information Act (FOIA). However, the issue of whether certain closing

agreements must be disclosed under the

FOIA has been the subject of recent litigation; thus far, courts addressing this issue

have agreed with the IRS position. See

Tax Analysts v. IRS, 53 F.Supp. 2d 449

(D.D.C. 1999); Tax Analysts v. IRS, 1999

U.S. Dist. LEXIS 16733 (D.D.C. Aug. 6,

1999), appeal docketed, No. 5284 (D.C.

Cir. Aug. 13, 1999).

10. MISCELLANEOUS

Record keeping requirements. No aspect of the PFA process will affect the

record keeping requirements imposed by

any section of the Internal Revenue Code.

Record retention. The taxpayer must

maintain a copy of the PFA and supporting documents, and books of account and

records sufficient to enable the IRS to examine the taxpayer’s compliance with the

PFA. These records may be specified in

the PFA itself or in separate agreements.

11. PAPERWORK REDUCTION ACT

The collection of information contained

in this notice has been reviewed and approved by the Office of Management and

Budget in accordance with the Paperwork

Reduction Act of 1995 (44 U.S.C. 3507)

under the control number 1545-1684.

An agency may not conduct or sponsor,

731

and a person is not required to respond to,

a collection of information unless it displays a valid OMB control number. The

collections of information in this notice

are in sections 4, 6, and 10. The information collected under section 4 (application) is required to provide the IRS with

the information necessary to determine

which taxpayers should be included in the

PFA pilot program. The information collected under section 6 will be used to resolve the taxpayer’s issue and to support

any PFA entered into between the taxpayer and the IRS. The recordkeeping requirement under section 10 will be used

for tax administration. The collections of

information under sections 4 and 6 are

voluntary. Once a PFA is entered into, the

recordkeeping requirements under section

10 are mandatory. The likely respondents

are businesses or other for-profit institutions.

The estimated total annual reporting

and/or recordkeeping burden is 967

hours.

The estimated annual burden per respondent/recordkeeper varies from 5 hours to

126 hours, depending on whether a taxpayer applying to the PFA pilot program

is accepted into the program. The estimated annual burden for taxpayers who

apply to the PFA pilot program and are

accepted is 126 hours. The estimated annual burden for taxpayers that apply to the

PFA pilot program and are not accepted is

5 hours. The estimated number of taxpayers who apply to the PFA pilot program and are accepted is 7. The estimated number of taxpayers who apply to

the PFA pilot program and are not accepted is 17. The estimated total number

of respondents and/or recordkeepers is

24.

The estimated annual frequency of responses is on occasion.

Books or records relating to a collection

of information must be retained so 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.

12. COMMENTS

The IRS invites interested persons to

comment on this program. Send submissions to CC:DOM:CORP:R (Notice

2000-12), room 5226, Internal Revenue

February 28, 2000

Service, POB 7604, Ben Franklin Station,

Washington, DC 20044. Submissions

also may be hand delivered Monday

through Friday between the hours of 8

a.m. and 5 p.m. to CC:DOM:CORP:R

(Notice 2000-12), Courier’s Desk, Internal Revenue Service, 1111 Constitution

Avenue, NW., Washington, DC. Alternatively, interested persons may submit

comments via e-mail to:

sharon.y.horn@m1.irscounsel.treas.gov

the states, Puerto Rico, and the insular

areas (American Samoa, Guam, Northern

Mariana Islands, and U.S. Virgin Islands)

of the United States for July 1, 1999, released by the Bureau of the Census on

December 29, 1999, in press releases

CB99-251, CB99-253, and CB99-254.

For convenience, these estimates are

reprinted below.

Puerto Rico

3,889,507

Rhode Island

990,819

South Carolina

South Dakota

3,885,736

733,133

Tennessee

Texas

5,483,535

20,044,141

U.S. Virgin Islands

Utah

119,615

2,129,836

Resident Population Estimates

for July 1, 1999.

Vermont

Virginia

593,740

6,872,912

Washington

West Virginia

Wisconsin

Wyoming

5,756,361

1,806,928

5,250,446

479,602

These addresses are for comments on the

pilot program. Requests by eligible taxpayers to participate in the pilot program

should be submitted through their Case

Manager.

Alabama

Alaska

American Samoa

Arizona

Arkansas

4,369,862

619,500

63,781

4,778,332

2,551,373

13. FURTHER INFORMATION

California

Colorado

Connecticut

33,145,121

4,056,133

3,282,031

Delaware

D.C.

753,538

519,000

Florida

15,111,244

Georgia

Guam

7,788,240

151,968

Hawaii

1,185,497

Idaho

Illinois

Indiana

Iowa

1,251,700

12,128,370

5,942,901

2,869,413

Kansas

Kentucky

2,654,052

3,960,825

Louisiana

4,372,035

Maine

Maryland

Massachusetts

Michigan

Minnesota

Mississippi

Missouri

Montana

1,253,040

5,171,634

6,175,169

9,863,775

4,775,508

2,768,619

5,468,338

882,779

Nebraska

Nevada

New Hampshire

New Jersey

New Mexico

New York

North Carolina

North Dakota

Northern Mariana Islands

1,666,028

1,809,253

1,201,134

8,143,412

1,739,844

18,196,601

7,650,789

633,666

69,216

Ohio

Oklahoma

Oregon

11,256,654

3,358,044

3,316,154

Pennsylvania

11,994,016

For further information regarding this Notice, contact John Petrella on (202) 2838390 (not a toll-free number).

Low-Income Housing Tax

Credit–2000 Calendar Year

Resident Population Estimates

Notice 2000-13

This notice informs (1) state and local

housing credit agencies that allocate lowincome housing tax credits under § 42 of

the Internal Revenue Code and (2) states

and other issuers of tax-exempt private

activity bonds under § 141, of the proper

population figures to be used for calculating the 2000 calendar year populationbased component of the state housing

credit ceiling (Credit Ceiling) under §

42(h)(3)(C)(i) and the 2000 calendar year

volume cap (Volume Cap) under § 146.

The population figures both for the

population-based component of the Credit

Ceiling and for the Volume Cap are determined by reference to § 146(j). That section provides generally that determinations of population for any calendar year

are made on the basis of the most recent

census estimate of the resident population

of a state (or issuing authority) released

by the Bureau of the Census before the

beginning of such calendar year.

The proper population figures for calculating the Credit Ceiling and the Volume Cap for the 2000 calendar year are

the estimates of the resident population of

February 28, 2000

732

The principal authors of this notice are

Christopher J. Wilson of the Office of Assistant Chief Counsel (Passthroughs and

Special Industries) and Timothy L. Jones

of the Office of Assistant Chief Counsel

(Financial Institutions and Products). For

further information regarding this notice

contact Mr. Wilson on (202) 622-3040

(not a toll-free call).

2000–9 I.R.B.

Part IV. Items of General Interest

Like-kind Exchange and

Involuntary Conversion of

MACRS Property; Correction

Announcement 2000-9

This document contains a correction to

Notice 2000-4 (2000-3 I.R.B. 313), in

which an erroneous address was given for

comments to be submitted electronically.

Notice 2000-4 provides that the Internal

Revenue Service and the Treasury Department intend to issue regulations under

§ 168 of the Internal Revenue Code

(MACRS property) to address the depreciation of MACRS property acquired in a

§ 1031 like-kind exchange or § 1033 involuntary conversion.

The corrected provision reads as follows:

Alternatively, comments may be submitted electronically via:

sharon.y.horn@m1.irscounsel.treas.gov

Guidance Under Section 355(e);

Recognition of Gain on Certain

Distributions of Stock or

Securities in Connection With an

Acquisition; Hearing

2000–9 I.R.B.

Announcement 2000-10

AGENCY: Internal Revenue Service

(IRS), Treasury.

ACTION: Change of date and time of

public hearing.

SUMMARY: This document contains a notice of date and time change of a public

hearing on proposed regulations relating to

recognition of gain on certain distributions

of stock or securities of a controlled corporation in connection with an acquisition.

DATES: The public hearing originally

scheduled for Wednesday, January 26,

2000, is rescheduled for Thursday, March

2, 2000, at 10 a.m. The due date for outlines of topics to be discussed at the hearing was January 5, 2000.

ADDRESSES: The public hearing is

being held in room 2615, Internal Revenue Building, 1111 Constitution Avenue,

NW., Washington, DC. Due to building

security procedures, visitors must enter at

the 10th Street entrance, located between

Constitution and Pennsylvania Avenues,

NW. In addition, all visitors must present

photo identification to enter the building.

FOR FURTHER INFORMATION CONTACT: Concerning the hearing, and/or to

733

be placed on the building access list to attend the hearing LaNita VanDyke, (202)

622-7190 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

The subject of the public hearing is

proposed regulations (REG-116733-98,

1999-36 I.R.B. 392) that was published in

the Federal Register on Thursday, August 24, 1999 (64 FR 46155).

The rules of 26 CFR 601.601(a)(3)

apply to the hearing.

A period of 10 minutes is allotted to

each person for presenting oral comments.

After the deadline for receiving outlines has passed, the IRS will prepare an

agenda containing the schedule of speakers. Copies of the agenda will be made

available, free of charge, at the hearing.

Because of access restrictions, the IRS

will not admit visitors beyond the immediate entrance area more than 15 minutes before the hearing starts. For information

about having your name placed on the

building access list to attend the hearing,

see the “FOR FURTHER INFORMATION

CONTACT” section of this document.

Cynthia E. Grigsby,

Chief, Regulations Unit

Assistant Chief Counsel (Corporate).

February 28, 2000

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.

February 28, 2000

i

2000–9 I.R.B.

Numerical Finding List1

Bulletins 2000–1 through 2000–8

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

Notices:

2000–1, 2000–2 I.R.B. 288

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

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–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–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

Revenue Rulings continued:

2000–4, 2000–4 I.R.B. 331

2000–5, 2000–5 I.R.B. 436

2000–6, 2000–6 I.R.B. 512

2000–8, 2000–7 I.R.B. 617

2000–9, 2000–6 I.R.B. 497

2000–10, 2000–8 I.R.B. 643

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

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

8874, 2000–8 I.R.B. 644

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

2000–20, 2000–6 I.R.B. 553

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

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.

2000–9 I.R.B.

ii

February 28, 2000

Finding List of Current Actions

on Previously Published Items1

Bulletins 2000–1 through 2000–8

Announcements:

99–50

Modified by

Rev. Proc. 2000–20, 2000–6 I.R.B. 553

Revenue Procedures—Continued:

Revenue Procedures—Continued:

93–10

Superseded by

Rev. Proc. 2000–20, 2000–6 I.R.B. 553

2000–6

Modified by

Rev. Proc. 2000–20, 2000–6 I.R.B. 553

94–12

Modified, amplified, and superseded by

Rev. Proc. 2000–11, 2000–3 I.R.B. 309

2000–8

Modified by both

Rev. Proc. 2000–16, 2000–6 I.R.B. 518 and

Rev. Proc. 2000–20, 2000–6 I.R.B. 553

Notices:

94–42

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

96–13

Modified by

Rev. Proc. 2000–1, 2000–1 I.R.B. 4

92–48

Obsoleted by

Notice 2000–11, 2000–6 I.R.B. 572

98–22

Modified and superseded by

Rev. Proc. 2000–16, 2000–6 I.R.B. 518

97–19

Modified by

Rev. Proc. 2000–1, 2000–1 I.R.B. 4

98–27

Superseded by

Rev. Proc. 2000–12, 2000–4 I.R.B. 387

98–22

Obsoleted by

T.D. 8870, 2000–8 I.R.B. 647

98–64

Superseded by

Rev. Proc. 2000–9, 2000–2 I.R.B. 280

98–52

Modified by

Notice 2000–3, 2000–4 I.R.B. 413

99–1

Superseded by

Rev. Proc. 2000–1, 2000–1 I.R.B. 4

98–61

Modified and superseded by

Rev. Proc. 2000–15, 2000–5 I.R.B. 447

99–2

Superseded by

Rev. Proc. 2000–2, 2000–1 I.R.B. 73

99–8

Obsoleted by

Rev. Proc. 2000–12, 2000–4 I.R.B. 387

99–3

Superseded by

Rev. Proc. 2000–3, 2000–1 I.R.B. 103

Revenue Procedures:

99–4

Superseded by

Rev. Proc. 2000–4, 2000–1 I.R.B. 115

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

92–13A

Modified, amplified, and superseded by

Rev. Proc. 2000–11, 2000–3 I.R.B. 309

92–41

Superseded by

Rev. Proc. 2000–20, 2000–6 I.R.B. 553

93–9

Superseded by

Rev. Proc. 2000–20, 2000–6 I.R.B. 553

Revenue Rulings:

88–36

Modified by

Rev. Proc. 2000–6, 2000–6 I.R.B. 512

98–30

Amplified and superseded by

Rev. Rul. 2000–8, 2000–7, I.R.B. 617

Treasury Decisions:

8734

Modified by

T.D. 8856, 2000–3, I.R.B. 298

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

99–6

Superseded by

Rev. Proc. 2000–6, 2000–1 I.R.B. 187

99–7

Superseded by

Rev. Proc. 2000–7, 2000–1 I.R.B. 227

99–8

Superseded by

Rev. Proc. 2000–8, 2000–1 I.R.B. 230

99–13

Modified and superseded by

Rev. Proc. 2000–16, 2000–6 I.R.B. 518

99–31

Modified and superseded by

Rev. Proc. 2000–16, 2000–6 I.R.B. 518

99–49

Modified and amplified by both

Rev. Rul. 2000–4, 2000–4 I.R.B. 331 and

Notice 2000–4, 2000–3 I.R.B. 313

99–51

Superseded by

Rev. Proc. 2000–3, 2000–1 I.R.B. 103

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.

February 28, 2000

iii

2000–9 I.R.B.

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