# Bulletin No. 1996–50

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/agency%3Airs%3Aabf14c5ea0843b53

## Record

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

## Text

Bulletin No. 1996–50
December 9, 1996

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. 96–57, page 5.
Federal rates; adjusted federal rates; adjusted federal long-term rate, and the long-term exempt rate.
For purposes of sections 1274, 1288, 382, and other
sections of the Code, tables set forth the rates for
December 1996.
Rev. Rul. 96–58, page 4.
Fringe benefits aircraft valuation formula. For purposes of section 1.61–21(g) of the Regulations, relating
to the rule for valuing non-commercial flights on
employer-provided aircraft, the Standard Industry Fare
Level (SIFL), cents-per-mile rates and terminal charges in
effect for 1996, are set forth. Rev. Rul. 96–25 modified.
Rev. Rul. 96–59, page 4.
Low-income housing credit; satisfactory bond; ‘‘bond
factor’’ amounts for the period October through
December 1996. This ruling announces the monthly
bond factor amounts to be used by taxpayers who dispose of qualified low-income buildings or interests therein during the period October through December 1996.

EMPLOYEE PLANS
Rev. Proc. 96–55, page 10.
Model amendment; Rev. Rul. 94–76. This procedure
provides a model amendment for certain sponsors of
profit-sharing and stock bonus plans to amend their
plans to reflect the requirements of Rev. Rul. 94–76. An
extension to June 30, 1997, is given for affected plans
to make the necessary amendment.

ESTATE TAX
Rev. Proc. 96–54, page 9.
Sample paragraphs to be used to satisfy governing
instrument requirements contained in sections

Finding Lists begin on page 16.
Announcement of Disbarments and Suspensions begins on page 13.

20.2056A–2(d)(1)(i) and (d)(1)(ii) of the Estate Tax
Regulations. The Service will recognize a trust as
meeting the requirements of sections 20.2056A–
2(d)(1)(i) and (d)(1)(ii) if the trust instrument contains
language that is the same in all material respects as the
paragraphs provided in this revenue procedure.

GIFT TAX
Rev. Rul. 96–56, page 7.
If certain conditions are satisfied, the delivery of a
check to a noncharitable donee will be deemed to be
complete for federal gift and estate tax purposes when
the check is deposited, cashed against available funds
of the donee, or presented for payment in the calendar
year for which favorable gift tax treatment is sought.
Rev. Rul. 67–396 modified.

TAX CONVENTIONS
Page 8.
The bilateral agreements between the United States and
Jordan, providing for the reciprocal tax exemption of
income from the international operation of ships and/or
aircraft, are set forth.

ADMINISTRATIVE
Announcement 96–126, page 12.
A ZIP code change is given for the Information Reporting
Program at the Martinsburg Computing Center.
Announcement 96–127, page 12.
Task Force for Africa/Los Angeles Relations, Pasadena,
CA, no longer qualifies as an organization to which
contributions are deductible under section 170 of the
Code.

Mission of the Service
The purpose of the Internal Revenue Service is to
collect the proper amount of tax revenue at the least
cost; serve the public by continually improving the

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

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

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

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

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

2

Introduction
The Internal Revenue Bulletin is the authoritative instrument of the Commissioner of Internal Revenue for
announcing official rulings and procedures of the Internal Revenue Service and for publishing Treasury Decisions, Executive Orders, Tax Conventions, legislation,
court decisions, and other items of general interest. It is
published weekly and may be obtained from the Superintendent of Documents on a subscription basis. Bulletin
contents of a permanent nature are consolidated semiannually into Cumulative Bulletins, which are sold on a
single-copy basis.

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

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

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

Revenue rulings represent the conclusions of the Service on the application of the law to the pivotal facts
stated in the revenue ruling. In those based on positions
taken in rulings to taxpayers or technical advice to
Service field offices, identifying details and information
of a confidential nature are deleted to prevent unwarranted invasions of privacy and to comply with statutory
requirements.

Part IV.—Items of General Interest.
With the exception of the Notice of Proposed Rulemaking and the disbarment and suspension list included in
this part, none of these announcements are consolidated in the Cumulative Bulletins.

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

The first Bulletin for each month includes an index for
the matters published during the preceding month.
These monthly indexes are cumulated on a quarterly and
semiannual basis, and are published in the first Bulletin
of the succeeding quarterly and semi-annual 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, D.C. 20402.

3

Part I. Rulings and Decisions Under the Internal Revenue Code of 1986
Section 42.—Low-Income Housing
Credit
The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the
month of December 1996. See Rev. Rul. 96–57,
page 5.

Low-income housing credit; satisfactory bond; ‘‘bond factor’’ amounts
for the period October through December 1996. This ruling announces the
monthly bond factor amounts to be used
by taxpayers who dispose of qualified

low-income buildings or interests therein
during the period October through December 1996.

by the Secretary under § 42(j)(6) of the
Internal Revenue Code. It further announced that the Secretary would publish in the Internal Revenue Bulletin a
table of ‘‘bond factor’’ amounts for
dispositions occurring during each calendar month.
This revenue ruling provides in Table
1 the bond factor amounts for calculating the amount of bond considered
satisfactory under § 42(j)(6) for dispositions of qualified low-income buildings
or interests therein during the period
October through December 1996.

Rev. Rul. 96–59
In Rev. Rul. 90–60, 1990–2 C.B. 3,
the Internal Revenue Service provided
guidance to taxpayers concerning the
general methodology used by the Treasury Department in computing the bond
factor amounts used in calculating the
amount of bond considered satisfactory
Table 1
Rev. Rul. 96–59

Monthly Bond Factor Amounts for Dispositions Expressed
As a Percentage of Total Credits
Calendar Year Building Placed in Service
or, if Section 42(f)(1) Election Was Made,
the Succeeding Calendar Year
Month of
Disposition

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

Oct. ’96
Nov. ’96
Dec. ’96

80.39
80.17
79.96

82.78
82.56
82.35

85.39
85.16
84.95

88.44
88.21
87.99

92.03
91.80
91.57

96.15
95.90
95.67

100.41
100.16
99.92

104.49
104.25
104.02

108.44
108.24
108.06

112.52
112.52
112.52

For a list of bond factor amounts
applicable to dispositions occurring during other calendar years, see the following revenue rulings: Rev. Rul. 90–60,
1990–2 C.B. 3, for dispositions occurring during calendar years 1987, 1988,
and 1989; Rev. Rul. 90–88, 1990–2 C.B.
7, for dispositions occurring during calendar year 1990; Rev. Rul. 91–67,
1991–2 C.B. 13, for dispositions occurring during calendar year 1991; Rev.
Rul. 92–101, 1992–2 C.B. 9, for dispositions occurring during calendar year
1992; Rev. Rul 93–83, 1993–2 C.B. 6,
for dispositions occurring during calendar year 1993; Rev. Rul. 94–71, 1994–2
C.B. 4, for dispositions occurring during
calendar year 1994; Rev. Rul. 95–83,
1995–2 C.B. 8, for dispositions occurring during calendar year 1995; Rev.
Rul. 96–16, 1996–11 I.R.B. 4, for dispositions occurring during the period January through March 1996; Rev. Rul.
96–33, 1996–27 I.R.B. 4, for dispositions occurring during the period April
through June 1996; and Rev. Rul. 96–
45, 1996–39 I.R.B. 5, for dispositions

occurring during the period July through
September 1996.
DRAFTING INFORMATION
The principal author of this revenue
ruling is Jack Malgeri of the Office of
Assistant Chief Counsel (Passthroughs
and Special Industries). For further information regarding this revenue ruling,
contact Mr. Malgeri at (202) 622–3040
(not a toll-free call).

Section 61.—Gross Income Defined
26 CFR 1.61–21: Taxation of fringe benefits.

Fringe benefits aircraft valuation
formula. For purposes of section 1.61–
21(g) of the regulations, relating to the
rule for valuing non-commercial flights
on employer-provided aircraft, the Standard Industry Fare Level (SIFL), centsper-mile rates and terminal charges in
effect for 1996 are set forth. Rev. Rul.
96–25 modified.

4

Rev. Rul. 96–58
For purposes of the taxation of fringe
benefits under section 61 of the Internal
Revenue Code, section 1.61–21(g) of
the Income Tax Regulations provides a
rule for valuing noncommercial flights
on employer-provided aircraft. Section
1.61–21(g)(5) provides an aircraft valuation formula to determine the value of
such flights. The value of a flight is
determined under the base aircraft valuation formula (also known as the Standard Industry Fare Level formula or
SIFL) by multiplying the SIFL centsper-mile rates applicable for the period
during which the flight was taken by the
appropriate aircraft multiple provided in
section 1.61–21(g)(7) and then adding
the applicable terminal charge. The SIFL
cents-per-mile rates in the formula and
the terminal charge are calculated by the
Department of Transportation and are
reviewed semi-annually.
The following charts sets forth the
terminal charges and SIFL mileage
rates:

Period During Which the Flight Was Taken
7/1/96–12/31/96

Terminal Charge
$31.61

SIFL Mileage Rates
Up to 500 miles = $.1729 per mile
501–1500 miles = $.1318 per mile
Over 1500 miles = $.1267 per mile

DRAFTING INFORMATION
The principal author of this revenue
ruling is Felicia A. Daniels of the Office
of the Associate Chief Counsel (Employee Benefits and Exempt Organizations). For further information regarding
this revenue ruling contact Ms. Daniels
on (202) 622–6050 (not a toll-free call).
Section 280G.—Golden Parachute
Payments
Federal short-term, mid-term, and long-term
rates are set forth for the month of December
1996. See Rev. Rul. 96–57, this page.

Section 382.—Limitation on Net
Operating Loss Carryforwards and
Certain Built-In Losses Following
Ownership Change
The adjusted federal long-term rate is set forth
for the month of December 1996. See Rev. Rul.
96–57, this page.

Section 412.—Minimum Funding
Standards
The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the
month of December 1996. See Rev. Rul. 96–57,
this page.

Section 467.—Certain Payments
for the Use of Property or Services
The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the
month of December 1996. See Rev. Rul. 96–57,
this page.

Section 468.—Special Rules for
Mining and Solid Waste
Reclamation and Closing Costs
The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the
month of December 1996. See Rev. Rul. 96–57,
this page.

Section 483.—Interest on Certain
Deferred Payments
The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the
month of December 1996. See Rev. Rul. 96–57,
this page.

Section 807.—Rules for Certain
Reserves
The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the
month of December 1996. See Rev. Rul. 96–57,
this page.

Section 846.—Discounted Unpaid
Losses Defined
The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the
month of December 1996. See Rev. Rul. 96–57,
this page.

Section 1274.—Determination of
Issue Price in the Case of Certain
Debt Instruments Issued for
Property

and the long-term exempt rate. For
purposes of sections 1274, 1288, 382,
and other sections of the Code, tables
set forth the rates for December 1996.
Rev. Rul. 96–57
This revenue ruling provides various
prescribed rates for federal income tax
purposes for December 1996 (the current month.) Table 1 contains the shortterm, mid-term, and long-term applicable federal rates (AFR) for the current
month for purposes of section 1274(d)
of the Internal Revenue Code. Table 2
contains the short-term, mid-term, and
long-term adjusted applicable federal
rates (adjusted AFR) for the current
month for purposes of section 1288(b).
Table 3 sets forth the adjusted federal
long-term rate and the long-term taxexempt rate described in section 382(f).
Table 4 contains the appropriate percentages for determining the low-income
housing credit described in section
42(b)(2) for buildings placed in service
during the current month. Table 5 contains the federal rate for determining the
present value of an annuity, an interest
for life or for a term of years, or a
remainder or a reversionary interest for
purposes of section 7520. Finally, Table
6 contains the 1997 interest rate for
sections 846 and 807.

(Also Sections 42, 280G, 382, 412, 467, 468, 482,
483, 807, 846, 1288, 7520, 7872.)

Federal rates; adjusted federal
rates; adjusted federal long-term rate,

REV. RUL. 96–57 TABLE 1
Applicable Federal Rates (AFR) for December 1996
Period for Compounding
Annual

Semiannual

Quarterly

Monthly

5.75%
6.34%
6.92%
7.51%

5.67%
6.24%
6.80%
7.37%

5.63%
6.19%
6.74%
7.30%

5.60%
6.16%
6.71%
7.26%

Short-Term
AFR
110% AFR
120% AFR
130% AFR

5

REV. RUL. 96–57 TABLE 1—Continued
Applicable Federal Rates (AFR) for December 1996
Period for Compounding
Annual

Semiannual

Quarterly

Monthly

6.31%
6.95%
7.59%
8.23%
9.54%
11.17%

6.21%
6.83%
7.45%
8.07%
9.32%
10.87%

6.16%
6.77%
7.38%
7.99%
9.21%
10.73%

6.13%
6.73%
7.34%
7.94%
9.14%
10.63%

6.77%
7.46%
8.15%
8.85%

6.66%
7.33%
7.99%
8.66%

6.61%
7.26%
7.91%
8.57%

6.57%
7.22%
7.86%
8.51%

Mid-Term
AFR
110% AFR
120% AFR
130% AFR
150% AFR
175% AFR
Long-Term
AFR
110% AFR
120% AFR
130% AFR

REV. RUL. 96–57 TABLE 2
Adjusted AFR for December 1996
Period for Compounding
Annual

Semiannual

Quarterly

Monthly

Short-term
adjusted AFR

3.83%

3.79%

3.77%

3.76%

Mid-term
adjusted AFR

4.58%

4.53%

4.50%

4.49%

Long-term
adjusted AFR

5.48%

5.41%

5.37%

5.35%

REV. RUL. 96–57 TABLE 3
Rates Under Section 382 for December 1996
Adjusted federal long-term rate for the current month

5.48%

Long-term tax-exempt rate for ownership changes during the current month (the highest of the
adjusted federal long-term rates for the current month and the prior two months)

5.64%

REV. RUL. 96–57 TABLE 4
Appropriate Percentages Under Section 42(b)(2) for December 1996
Appropriate percentage for the 70% present value low-income housing credit

8.54%

Appropriate percentage for the 30% present value low-income housing credit

3.66%

REV. RUL. 96–57 TABLE 5
Rate Under Section 7520 for December 1996
Applicable federal rate for determining the present value of an annuity, an interest for life or a
term of years, or a remainder or reversionary interest

6

7.6%

REV. RUL. 96–57 TABLE 6
Rates Under Sections 846 and 807
Applicable rate of interest for 1997 for purposes of sections 846 and 807

Section 1288.—Treatment of
Original Issue Discount on
Tax-Exempt Obligations
The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the
month of December 1996. See Rev. Rul. 96–57,
page 5.

Section 2031.—Definition of Gross
Estate
26 CFR 20.2031–5: Valuation of cash on hand or
on deposit.
Rev. Rul. 67–396 is modified to provide that, if
certain conditions are satisfied, the delivery of a
check to a noncharitable donee will be deemed to
be complete for federal gift and estate tax purposes when the check is deposited, cashed against
available funds of the donee, or presented for
payment in the calendar year for which favorable
gift tax treatment is sought. See Rev. Rul. 96–56,
this page.

Section 2056A.—Qualified
Domestic Trust
26 CFR 20.2056A–2(d)(1): Security and other
arrangements for payment of estate tax imposed
under section 2056A(b)(1).
Sample paragraphs are provided that may be
used to satisfy the governing instrument requirements contained in §§ 20.2056A–2(d)(1)(i) and
(d)(1)(ii) of the Estate Tax Regulations for a
qualified domestic trust (QDOT) as described in
§ 2056A of the Internal Revenue Code. See Rev.
Proc. 96–54, page 9.

Section 2511.—Transfers in
General
26 CFR 25.2511–2: Cessation of donor’s dominion
and control.
(Also § 2031; 20.2031–5.)

If certain conditions are satisfied, the
delivery of a check to a noncharitable
donee will be deemed to be complete
for federal gift and estate tax purposes
when the check is deposited, cashed
against available funds of the donee, or
presented for payment in the calendar
year for which favorable gift tax treatment is sought. Rev. Rul. 67–396 modified.

Rev. Rul. 96–56
In view of the Fourth Circuit’s decision in Metzger v. Commissioner, 38
F.3d 118 (4th Cir. 1994) the Internal
Revenue Service has reconsidered the
rationale for the holding in Situation 1
of Rev. Rul. 67–396, 1967–2 C.B. 351.
In Situation 1, the donor transferred a
gift check on December 25 to a
noncharitable donee, but the donee held
the check until January 2 of the following year when it was cashed by the
drawee bank. Rev. Rul. 67–396 concludes that the gift was not complete for
federal gift tax purposes until the check
was paid by the drawee bank on January
2, because prior to the check’s payment,
certification, acceptance by the drawee,
or negotiation, the donor had not relinquished dominion and control over the
funds. Prior to the occurrence of one of
these events, the donor could have
stopped payment and revoked the gift.
Metzger holds that if a check is
delivered to a noncharitable donee, for
federal gift tax purposes, completion of
the gift relates back to the date the
check was deposited by the donee, provided the check is paid by the drawee
bank while the donor is alive and: (1)
the donor intended to make a gift; (2)
delivery of the check was unconditional;
and (3) the donee presented the check
for payment in the year for which
completed gift treatment is sought and
within a reasonable time of issuance.
The Service will follow the Metzger
decision.
HOLDING
Rev. Rul. 67–396 is modified to provide that the delivery of a check to a
noncharitable donee will be deemed to
be a completed gift for federal gift and
estate tax purposes on the earlier of (i)
the date on which the donor has so
parted with dominion and control under
local law as to leave in the donor no
power to change its disposition, or (ii)

7

6.33%

the date on which the donee deposits the
check (or cashes the check against available funds of the donee) or presents the
check for payment, if it is established
that: (1) the check was paid by the
drawee bank when first presented to the
drawee bank for payment; (2) the donor
was alive when the check was paid by
the drawee bank; (3) the donor intended
to make a gift; (4) delivery of the check
by the donor was unconditional; and (5)
the check was deposited, cashed, or
presented in the calendar year for which
completed gift treatment is sought and
within a reasonable time of issuance.
The result in Situation 1 of Rev. Rul.
67–396 remains the same for two reasons: the check was not delivered unconditionally (the donor requested that
the donee not deposit or cash the check
for a few days) and the check was not
presented for payment in the same calendar year for which completed gift
treatment was sought.
EFFECT ON OTHER DOCUMENTS
Rev. Rul. 67–396 is modified.
DRAFTING INFORMATION
The principal author of this revenue
ruling is Lane Damazo of the Office of
Assistant Chief Counsel (Passthroughs
and Special Industries). For further information regarding this revenue ruling
contact Lane Damazo (202) 622–3090
(not a toll-free call).
Section 7520.—Valuation Tables
The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the
month of December 1996. See Rev. Rul. 96–57,
page 5.

Section 7872.—Treatment of Loans
With Below-Market Interest Rates
The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the
month of December 1996. See Rev. Rul. 96–57,
page 5.

Part II. Treaties and Tax Legislation
Subpart A.—Tax Conventions
JORDON
EMBASSY OF
THE UNITED STATES OF AMERICA
AMMAN, JORDAN
APRIL 7, 1988
Note No. 078
The Embassy of the United States of
America presents its compliments to the
Ministry of Foreign Affairs of Jordan
and has the honor to propose that the
two governments conclude an agreement
to exempt from income tax, on a reciprocal basis, income derived by residents
of the other country from the international operation of ships and aircraft.
The terms of the agreement are as
follows:
• The Government of the United
States of America, in accordance with
Sections 872(b) and 883 of the Internal
Revenue Code, agrees to exempt from
tax gross income derived from the international operation of ships or aircraft by
individuals who are residents of Jordan
(other than U.S. citizens) and corporations organized in Jordan. This exemption is granted on the basis of equivalent
exemptions granted by Jordan to citizens
of the United States (who are not residents of Jordan) and to corporations
organized in the United States (which
are not subject to tax by Jordan on the
basis of residence).
• In the case of a corporation, the
exemption shall apply only if the corporation meets either of the following
conditions:
(1) More than 50 percent of the value
of the corporation’s stock is owned,

directly or indirectly, by individuals who
are residents of Jordan or of another
country which grants a reciprocal exemption to U.S. citizens and corporations; or
(2) The corporation’s stock is primarily and regularly traded on an established securities market in Jordan, or is
wholly owned by a corporation whose
stock is so traded and which is also
organized in Jordan.
For purposes of subparagraph 1, the
Government of Jordan and its wholly
owned public corporations will be
treated as an individual resident of Jordan. For purposes of the exemption
from U.S. tax, subparagraph (1) will be
considered to be satisfied if the corporation is a ‘‘controlled foreign corporation’’ under the Internal Revenue Code.
• Gross income includes all income
derived from the international operation
of ships or aircraft on a full (time or
voyage) basis and income from the
rental of containers and related equipment which is incidental to the international operation of ships or aircraft. It
also includes income from the rental on
a bareboat basis of ships and aircraft
used for international transport.
• The Embassy of the United States
of America considers that this Note,
together with the Ministry’s reply Note
confirming that the Government of Jordan agrees to these terms, constitutes an
agreement amending the agreement of
April 17, 1973 and June 20, 1974.1 This
agreement shall enter into force on the
date of the Ministry’s reply Note and
shall have effect with respect to taxable
years beginning on or after January 1,
1987.
1

TIAS 8002; 26 UST 16.

8

• Either government may terminate
this agreement by giving written notice
of termination through diplomatic channels.
• The Embassy of the United States
of America takes this opportunity to
renew to the Ministry of Foreign Affairs
of Jordan the assurances of its highest
consideration.
HASHEMITE KINGDOM OF
JORDAN
MINISTRY OF
FOREIGN AFFAIRS
APRIL 7, 1988
No. 490
The Ministry of Foreign Affairs of the
Hashemite Kingdom of Jordan present
their compliments to the Embassy of the
United States of America and have the
honour to acknowledge receipt of their
Note No. 078 dated April 7, 1988 which
reads as follows:
[For text of the U.S. note, see above.]
The Ministry have the further honour
to inform the distinguished Embassy
that the foregoing proposal is acceptable
to the Government of the Hashemite
Kingdom of Jordan who therefore agree
that the Embassy’s note together with
this reply shall constitute an agreement
between the two governments which
shall amend the agreement of April 17,
1973 and June 20, 1974 and shall enter
into force on the date of this reply.
The Ministry of Foreign Affairs of the
Hashemite Kingdom of Jordan avail
themselves of this opportunity to renew
to the Embassy of the United States of
America the assurances of their highest
consideration.

Part III. Administrative, Procedural, and Miscellaneous
26 CFR 2056A: Qualified domestic trust.

Rev. Proc. 96–54
SECTION 1. PURPOSE
This revenue procedure provides
sample paragraphs that may be used to
satisfy the governing instrument requirements contained in §§ 20.2056A–
2(d)(1)(i) and (d)(1)(ii) of the Estate Tax
Regulations for a qualified domestic
trust (QDOT) as described in § 2056A(a) of the Internal Revenue Code.
SEC. 2. BACKGROUND
Section 2056A(a)(2) authorizes the
Internal Revenue Service to promulgate
regulations that will ensure the collection of the additional estate tax imposed
under § 2056A(b)(1)(A) and (B). Final
regulations were issued pursuant to this
authorization on December 9, 1996.
Under § 20.2056A–2(d)(1)(i), if the
fair market value of the assets passing
to the QDOT is in excess of $2 million,
either: (A) at least one Trustee must be
a United States bank described in
§ 581, or a U.S. Branch of a foreign
bank; (B) the trustee must furnish a
bond in favor of the Internal Revenue
Service in an amount equal to 65 percent of the fair market value of the trust
corpus; or (C) the trustee must furnish
an irrevocable letter of credit in an
amount equal to 65 percent of the fair
market value of the trust corpus. The
regulations provide detailed descriptions
of the required terms of the bond and
letter of credit and sample forms for
each.
Under § 20.2056A–2(d)(1)(i), the
QDOT may alternate among the arrangements provided in paragraphs
(d)(1)(i)(A), (B), and (C), provided that
at any given time at least one of the
arrangements is in effect.
Under § 20.2056A–2(d)(1)(ii), if the
fair market value of the QDOT assets is
$2 million or less, the QDOT must
provide that the trustee will either satisfy the requirements listed above, or
limit the fair market value of real property that is held by the trust and situated
outside the United States to 35 percent
of the value of the trust at the close of
the taxable year. A special look-through
rule applies for interests in corporations
or partnerships that own real property.
In addition, an executor may elect to
exclude up to $600,000 in value of a
principal residence passing to the QDOT

in determining if the $2 million threshold has been exceeded.
This revenue procedure contains
sample trust language that, if adopted in
the trust instrument, will be recognized
as meeting the requirements of
§ 20.2056A–2(d)(1)(i)(A), (B), and (C),
and (d)(1)(ii).
SEC. 3. SCOPE AND OBJECTIVE
The sample trust language contained
in section 4 of this revenue procedure
meets all of the requirements under
§ 20.2056A–2(d)(1)(i)(A), (B), and (C),
and (d)(1)(ii). If the trust instrument
expressly adopts language that is the
same in all material respects to the
sample paragraphs provided herein, and
otherwise meets the requirements of a
qualified
domestic
trust
under
§ 2056A(a) and § 20.2056A–2, the Service will recognize the trust as satisfying the applicable requirements of
§ 2056A(a) and the corresponding regulations.
SEC. 4. SAMPLE QUALIFIED
DOMESTIC TRUST LANGUAGE
THAT MAY BE USED TO SATISFY
THE ‘‘GOVERNING INSTRUMENT’’
REQUIREMENTS OF
§ 20.2056A–2(d)(1)(i) and (ii).
My trustee shall comply with the
requirements for security arrangements
for qualified domestic trusts as set forth
in Treas. Reg. § 20.2056A–2(d)(1)(i) or
(ii), summarized as follows:
(a) Trust in Excess of $2 Million. If
the fair market value of the assets
passing to the trust (determined without
reduction for any indebtedness thereon)
exceeds $2 million on the relevant valuation date, then my Trustee must at all
times during the term of the Trust either
satisfy the U.S. Bank as Trustee requirement (see Treas. Reg. § 20.2056A–2(d)(1)(i)(A)), or furnish a bond that satisfies the requirements of Treas. Reg.
§ 20.2056A– 2(d)(1)(i)(B), or furnish an
irrevocable letter of credit that satisfies
the requirements of Treas. Reg.
§ 20.2056A–2(d)(1)(i)(C), (hereinafter
referred to as the U.S. Bank, Bond, or
Letter of Credit Requirement). My
Trustee may alternate between any of
the security arrangements described in
the preceding sentence provided that, at
all times during the term of the trust,
one of the arrangements is operative.
If my Trustee elects to furnish a bond
or letter of credit as security, then in the

9

event the Internal Revenue Service
draws on the instrument in accordance
with its terms, neither my U.S. Trustee
nor any other person will seek a return
of any part of the remittance until after
April 15th of the calendar year following the year in which the bond or letter
of credit is drawn upon.
(b) Trust of $2 Million or Less. If the
fair market value of the assets passing
to the trust (determined without reduction for any indebtedness) is $2 million
or less on the relevant valuation date,
then my Trustee must comply with
either the U.S. Bank, Bond, or Letter of
Credit Requirement only if more than
35% of the fair market value of the trust
assets, determined annually on the last
day of the taxable year of the trust,
consists of real property located outside
the United States. For purposes of determining whether more than 35% of the
trust assets consist of foreign real property, Treas. Reg. § 20.2056A–2(d)(1)(ii)(B) applies.
(c) Determination of Value. For purposes of determining whether the fair
market value of the trust assets exceeds
$2 million, my Trustee is authorized to
make the election under Treas. Reg.
§ 20.2056A–2(d)(1)(iv)(A) with respect
to real property used as my spouse’s
personal residence.
(d) Amount of Bond or Letter of
Credit. For purposes of determining the
amount of the bond or letter of credit,
my Trustee is authorized to make the
election under Treas. Reg. § 20.2056A–
2(d)(1)(iv)(B) with respect to real property used as my spouse’s personal residence.
(e) Annual Statements. My Trustee is
directed to file any annual statements
required under Treas Reg. § 20.2056A–
2(d)(3).
(f) General Conduct. Notwithstanding
anything contained herein to the contrary, my U.S. Trustee is hereby authorized to enter into alternative plans or
arrangements with the Internal Revenue
Service pursuant to Treas. Reg.
§ 20.2056A–2(d)(4) to assure collection
of the deferred estate tax, in lieu of the
provisions contained herein.
(g) References to Regulations. All
references to ‘‘Treas. Reg.’’ in this document shall be references to regulations
published under 26 CFR as in effect on
the date of execution of this document,
or, in the event that any such regulation
is amended or superseded thereafter, to

the regulation (or any successor regulation) as so amended.
(h) Dollar Values. The use of the
dollar sign ($) shall indicate amounts
stated in U.S. dollars.
SEC. 5. APPLICATION
The Service will recognize a trust as
meeting all of the requirements of
§ 20.2056A–2(d)(1)(i) and (ii) if the
trust contains language that is the same
in all material respects to the paragraphs
provided in section 4, and the trust
operates in a manner consistent with the
terms of the trust instrument.
SEC. 6. DRAFTING INFORMATION
The principal author of this revenue
procedure is Susan B. Hurwitz of the
Office of Assistant Chief Counsel
(Passthroughs and Special Industries).
For further information regarding this
revenue procedure, contact Ms. Hurwitz
at (202) 622–3090 (not a toll-free number).
SEC. 7. EFFECTIVE DATE
This revenue procedure is effective
for trusts for which qualified domestic
trust elections are made after December
9, 1996, the date of publication of this
revenue procedure in the Internal Revenue Bulletin.
26 CFR 601.201: Rulings and determination letters.

Rev. Proc. 96–55
SECTION 1. PURPOSE
.01 This revenue procedure provides
a model amendment for sponsors of
certain master and prototype (‘‘M&P’’),
regional prototype, volume submitter
specimen, and individually designed
profit-sharing or stock bonus plans in
order to assist these plan sponsors in
amending their plans to comply with
Rev. Rul. 94–76, 1994–2 C.B. 46.
.02 This revenue procedure also extends, until June 30, 1997, the time
period to adopt corrective plan amendments provided for in Rev. Rul. 94–76.
SECTION 2. BACKGROUND AND
GENERAL INFORMATION
.01 Section 401(a) of the Internal
Revenue Code provides that a trust
created or organized in the United States
and forming a part of a qualified stock
bonus, pension, or profit-sharing plan of
an employer constitutes a qualified trust

only if the various requirements set out
in § 401(a) are met.
.02 Section 1.401–1(b)(1)(i) of the
Income Tax Regulations provides the
definition of a pension plan for purposes
of § 401(a). This section provides, in
part, that a pension plan is a plan
established and maintained by an employer primarily to provide for the payment of definitely determinable benefits
to employees over a period of years,
usually for life, after retirement. This
section also provides that a pension plan
may provide for the payment of a
pension due to disability, and may also
provide for incidental death benefits.
.03 Rev. Rul. 56–693, 1956–2 C.B.
282, as modified by Rev. Rul. 60–323,
1960–2 C.B. 148, provides that, pursuant to the definition of a pension plan in
§ 1.401–1(b) of the regulations, a pension plan fails to meet the requirements
of § 401(a) if it permits an employee to
withdraw any part of the employee’s
accrued benefit (other than a benefit
attributable to voluntary employee contributions) prior to certain distributable
events; i.e., retirement, death, disability,
severance of employment, or termination
of the plan.
.04 Rev. Rul. 94–76 provides that, to
satisfy § 401(a), benefits attributable to
assets and liabilities transferred, within
the meaning of § 414(l), from a money
purchase pension plan to a profit-sharing
or stock bonus plan must remain subject
to the restrictions on distributions from
pension plans set forth in Rev. Rul.
56–693 based upon § 1.401–1(b) of the
regulations.
.05 Rev. Rul. 94–76 provides that, in
order to remain qualified under
§ 401(a), profit-sharing or stock bonus
plans that accept transfers of assets and
liabilities from money purchase pension
plans and permit distributions prior to
retirement, death, disability, severance of
employment, or termination of the plan,
must be amended to provide that on or
after a transfer of assets and liabilities
from a money purchase pension plan to
the profit-sharing or stock bonus plan,
the account balances (including the posttransfer earnings thereon) attributable to
the transferred assets and liabilities will
be distributed only on or after the
occurrence of one of these events on or
after which distributions are permitted
from a pension plan.
.06 Rev. Rul. 94–76 provides that
certain profit-sharing plans or stock bonus plans are permitted to be amended

10

to eliminate an optional form of benefit
provided for in the plan prior to December 12, 1994, solely with respect to
benefits attributable to assets and liabilities that are transferred (within the
meaning of § 414(l)) from a money
purchase pension plan (other than any
portion of those assets and liabilities
attributable to voluntary employee contributions), to the extent that the optional form permits distribution of those
benefits prior to the employee’s retirement, death, disability, or severance of
employment, and prior to plan termination. The plan amendment eliminating
the optional form of benefit must be
adopted by the last day of the first plan
year beginning on or after December 12,
1994, and must be made effective not
later than the first day of that plan year,
or, if later, 90 days after December 12,
1994.
.07 With respect to certain plans, employers are entitled to extended reliance
pursuant to Rev. Proc. 89–9, 1989–1
C.B. 780, Rev. Proc. 89–13, 1989–1
C.B. 801 (both as modified by Rev.
Proc. 93–9, 1993–1 C.B. 474), or Rev.
Proc. 93–39, 1993–2 C.B. 513 (relating
to master or prototype plans, regional
prototype plans, and individually designed plans). Except in certain limited
circumstances, plans that are entitled to
this extended reliance generally are not
required to be amended until 1999 to
comply with administrative guidance of
general applicability (e.g., revenue rulings). Accordingly, for a profit-sharing
or stock bonus plan entitled to extended
reliance, if no transfer of assets and
liabilities to the plan from a money
purchase pension plan occurred or occurs after the date of the plan’s most
recent determination letter and prior to
the date that the amendment required by
Rev. Rul. 94–76 is adopted and if the
amendment is made effective within
certain time limits specified in Rev. Rul.
94–76, there is an extended period for
amending the plan.
SECTION 3. MODEL AMENDMENT
.01 All plans—Sponsors described in
subsection .02 may amend their plans by
adopting the model language in the
appendix to this revenue procedure on a
word-for-word basis, in accordance with
the instructions in this revenue procedure. If a sponsor to whom the model
language is available pursuant to subsection .02 adopts the model language,
neither application to the Service nor a
user fee is required. The Service will

not issue new opinion, notification, advisory, or determination letters for plans
that are amended solely to add the
model language described in this section.
.02 The model language is available
only to sponsors of M&P, regional prototype, volume submitter specimen, and
individually designed plans (including
volume submitter plans) that 1) are
eligible for the relief from failure to be
qualified under § 401(a) provided in
Rev. Rul. 94–76 and 2) as of the date of
the adoption of the model amendment
have reliance on a favorable opinion,
notification, or determination letter that
takes into account the requirements of
the Tax Reform Act of 1986, Pub. L.
No. 99–514 (‘‘TRA ’86’’) under Rev.
Proc. 89–9, 1989–1 C.B. 780, as modified; Rev. Proc. 89–13, 1989–1 C.B.
801, as modified; Rev. Proc. 90–20,
1990–1 C.B. 495; Rev. Proc. 91–41,
1991–2 C.B. 697; Rev. Proc. 91–66,
1991–2 C.B. 870; Rev. Proc. 93–39,
1993–2 C.B. 513; or Rev. Proc. 96–6,
1996–1 I.R.B. 151. Condition 2) in the
preceding sentence does not apply to
plans 1) that (a) have received a favorable determination, opinion, or notification letter that considered TEFRA,
DEFRA, and REA, and (b) have been
submitted within the plan’s § 401(b)
remedial amendment period for a determination, opinion, or notification letter
that considers TRA ’86 (TRA ’86 remedial amendment period) but have not yet
received the letter or 2) for which the
TRA ’86 remedial amendment period
has not yet expired, such as adopters of
master and prototype plans, regional
prototype plans, and volume submitter
plans, described in section 3 of Rev.
Proc. 95–12, 1995–1 C.B. 508; governmental plans described in Announcement 95–48, 1995–23 I.R.B. 13; and
plans maintained by tax-exempt organizations, including non-electing church
plans, described in Announcement 95–
48.

.03 M&P, Regional Prototype and
Volume Submitter Plans—M&P, regional prototype and volume submitter
plan sponsors that use the model language must file Form 8837, Notice of
Adoption of Revenue Procedure Model
Amendments.
SECTION 4. EXTENSION OF TIME
TO ADOPT AMENDMENT
The time period for adopting a plan
amendment eliminating an optional form
of benefit pursuant to Rev. Rul. 94–76
is extended to June 30, 1997, for profitsharing or stock bonus plans that otherwise were required, under that revenue
ruling, to be amended to eliminate any
optional form of benefit before that date.
SECTION 5. RELIANCE
An employer entitled to rely on an
opinion, notification, or determination
letter will not lose reliance on the letter
merely because of this amendment.
Plans that are amended in accordance
with section 3 of this revenue procedure
will not cause the plan to lose its
otherwise applicable extended reliance
period under Rev. Procs. 89–9 and 89–
13, as modified by Rev. Proc. 93–9, or
section 13 of Rev. Proc. 93–39.
DRAFTING INFORMATION
The principal author of this revenue
procedure is Richard Wright of the
Employee Plans Division. For further
information regarding this revenue procedure, contact the Employee Plans Division’s telephone assistance service between 1:30 and 4:00 p.m., Eastern Time,
Monday through Thursday on (202)
622–6074/6075 or Mr. Wright at (202)
622–6214. (These telephone numbers
are not toll-free numbers.)
APPENDIX
MODEL LANGUAGE
(Note to Sponsor: The following
model amendment may be used to

11

amend a profit-sharing or stock bonus
plan to eliminate an optional form of
benefit provided for in the plan on or
before December 12, 1994, solely with
respect to benefits attributable to assets
and liabilities that have been transferred,
within the meaning of § 414(l), from a
money purchase pension plan (other
than any portion of those assets and
liabilities attributable to voluntary employee contributions) to the extent that
the optional form permits distribution of
those benefits prior to the employee’s
retirement, death, disability or severance
from employment, and prior to plan
termination.)
This amendment is effective
. (For plans,
other than those entitled to extended
reliance as described in Rev. Rul. 94–
76, insert a date not later than the first
day of the first plan year beginning on
or after December 12, 1994, or, if later,
90 days after December 12, 1994. For
plans entitled to extended reliance, see
Rev. Rul. 94–76 for the permissible
effective date.)
Notwithstanding any provision of this
plan to the contrary, to the extent that
any optional form of benefit under this
plan permits a distribution prior to the
employee’s retirement, death, disability,
or severance from employment, and
prior to plan termination, the optional
form of benefit is not available with
respect to benefits attributable to assets
(including the post-transfer earnings
thereon) and liabilities that are transferred, within the meaning of § 414(l)
of the Internal Revenue Code, to this
plan from a money purchase pension
plan qualified under § 401(a) of the
Internal Revenue Code (other than any
portion of those assets and liabilities
attributable to voluntary employee contributions).

Part IV. Items of General Interest
ZIP Code Change for Information
Reporting Program
Announcement 96–126
A ZIP Code change for the Information Reporting Program at the
Martinsburg Computing Center was effective as of November 12, 1996. The
new ZIP Code will apply only to the
Post Office Box 1359 address. Information returns filed magnetically, correspondence related to the Information
Reporting Program, applications, extension, and waiver requests should be
mailed to the following address:
IRS-Martinsburg Computing Center
Information Reporting Program
P. O. Box 1359, MS–360
Martinsburg, WV 25402–1359
It is important to make this change on
your mailing label as mail containing
incorrect address information will be
returned. The ZIP Code change will
appear in the next revisions of all
publications and forms related to information returns which include the P. O.
Box 1359 address.

1996–50

I.R.B.

Deletions From Cumulative List of
Organizations Contributions to
Which Are Deductible Under
Section 170 of the Code
Announcement 96–127
The name of an organization that no
longer qualifies as an organization described in section 170(c)(2) of the Internal Revenue Code of 1986 is listed
below.
Generally, the Service will not disallow deductions for contributions made
to a listed organization on or before the
date of announcement in the Internal
Revenue Bulletin that an organization
no longer qualifies. However, the Service is not precluded from disallowing a
deduction for any contributions made
after an organization ceases to qualify
under section 170(c)(2) if the organization has not timely filed a suit for
declaratory judgment under section 7428
and if the contributor (1) had knowledge
of the revocation of the ruling or determination letter, (2) was aware that such
revocation was imminent, or (3) was

12

in part responsible for or was aware of
the activities or omissions of the organization that brought about this revocation.
If on the other hand a suit for declaratory judgment has been timely
filed, contributions from individuals and
organizations described in section
170(c)(2) that are otherwise allowable will continue to be deductible.
Protection under section 7428(c) would
begin on December 9, 1996, and would
end on the date the court first determines that the organization is not
described in section 170(c)(2) as more
particularly set forth in section
7428(c)(1). For individual contributors, the maximum deduction protected
is $1,000, with a husband and wife
treated as one contributor. This benefit is not extended to any individual
who was responsible, in whole or in
part, for the acts or omissions of the
organization that were the basis for
revocation.
Task Force for Africa/Los Angeles
Relations
Pasadena, CA

Announcement of the Disbarment, Suspension, or Consent to Voluntary
Suspension of Attorneys, Certified Public Accountants, Enrolled Agents, and
Enrolled Actuaries From Practice Before the Internal Revenue Service
Under 31 Code of Federal Regulations, Part 10, an attorney, certified public accountant, enrolled agent, or enrolled actuary, in order to avoid the
institution or conclusion of a proceeding
for his disbarment or suspension from
practice before the Internal Revenue Service, may offer his consent to suspension
from such practice. The Director of
Practice, in his discretion, may suspend
an attorney, certified public accountant,
enrolled agent, or enrolled actuary in
accordance with the consent offered.
Attorneys, certified public accountants, enrolled agents, and enrolled actuaries are prohibited in any Internal Rev-

enue Service matter from directly or
indirectly employing, accepting assistance from, being employed by or sharing fees with, any practitioner disbarred
or suspended from practice before the
Internal Revenue Service.
To enable attorneys, certified public
accountants, enrolled agents, and enrolled actuaries to identify practitioners
under consent suspension from practice
before the Internal Revenue Service, the
Director of Practice will announce in the
Internal Revenue Bulletin the names and
addresses of practitioners who have
been suspended from such practice, their
designation as attorney, certified public

accountant, enrolled agent, or enrolled
actuary, and date or period of suspension. This announcement will appear in
the weekly Bulletin at the earliest practicable date after such action and will
continue to appear in the weekly Bulletins for five successive weeks or for as
many weeks as is practicable for each
attorney, certified public accountant, enrolled agent, or enrolled actuary so
suspended and will be consolidated and
published in the Cumulative Bulletin.
The following individuals have been
placed under consent suspension from
practice before the Internal Revenue
Service:

Name

Address

Designation

Date of Suspension

Sherman, Richard M.
Hunter, Lewis
Hisken, Donald
Byrne, Steven P.
Mulrey, Robert M.
Edwards, Ronald A.
Hart Jr., Charles E.
Willner, Peter D.
May, Gary
Josephson, Elliott
Capwill Jr., James A.
Hazel, John J.
Jacobs, Patrick
Lau, William
Franklin, Gene L.
Winterhalter, Charles L.
Cremer, Patricia L.
Gardner, Stephen A.
Masini, David
Cunningham, Michael
Smith, Robert

Crystal Lake, IL
Jacksonville, FL
Red Bluff, CA
Arcadia, CA
Milton, MA
Plymouth, MI
Wilmington, OH
Stowe, VT
Madison, WI
Northbrook, IL
Solon, OH
Ridgefield, CT
St. Paul, MN
Crete, IL
Lees Summit, MO
Cincinnati, OH
Roundup, MT
Dallas, TX
Wheat Ridge, CO
Lafayette, IN
Chicago, IL

CPA
CPA
CPA
Attorney
CPA
CPA
Attorney
CPA
Attorney
CPA
CPA
Enrolled Agent
CPA
CPA
Enrolled Agent
CPA
CPA
Attorney
CPA
CPA
CPA

October 18, 1996 to July 17, 1997
October 25, 1996 to January 24, 1997
November 1, 1996 to March 31, 1997
November 1, 1996 to January 31, 1997
November 1, 1996 to October 31, 1997
November 1, 1996 to April 30, 1998
November 1, 1996 to October 31, 1998
November 1, 1996 to April 30, 1997
November 1, 1996 to October 31, 1998
November 1, 1996 to October 31, 1998
November 1, 1996 to February 28, 1997
November 1, 1996 to January 31, 1997
November 1, 1996 to December 31, 1996
November 1, 1996 to June 30, 1997
November 1, 1996 to January 31, 1997
November 1, 1996 to April 30, 1998
November 5, 1996 to May 4, 1997
November 7, 1996 to May 6, 1999
November 12, 1996 to November 11, 1997
November 12, 1996 to August 11, 1997
January 1, 1997 to December 31, 1997

13

Announcement of the Expedited Suspension of Attorneys, Certified Public
Accountants, Enrolled Agents, and Enrolled Actuaries From Practice Before the
Internal Revenue Service
Under title 31 of the Code of Federal
Regulations, section 10.76, the Director
of Practice is authorized to immediately
suspend from practice before the Internal
Revenue Service any practitioner who,
within five years, from the date the
expedited proceeding is instituted, (1)
has had a license to practice as an
attorney, certified public accountant, or
actuary suspended or revoked for cause;
or (2) has been convicted of any crime
under title 26 of the United States Code
or, of a felony under title 18 of the
United States Code involving dishonesty
or breach of trust.
Attorneys, certified public accountants, enrolled agents, and enrolled actu-

aries are prohibited in any Internal Revenue Service matter from directly or
indirectly employing, accepting assistance from, being employed by, or sharing fees with, any practitioner disbarred
or suspended from practice before the
Internal Revenue Service.
To enable attorneys, certified public
accountants, enrolled agents, and enrolled actuaries to identify practitioners
under expedited suspension from practice before the Internal Revenue Service,
the Director of Practice will announce in
the Internal Revenue Bulletin the names
and addresses of practitioners who have
been suspended from such practice, their
designation as attorney, certified public

accountant, enrolled agent, or enrolled
actuary, and date or period of suspension. This announcement will appear in
the weekly Bulletin at the earliest practicable date after such action and will
continue to appear in the weekly Bulletins for five successive weeks or for as
many weeks as is practicable for each
attorney, certified public accountant, enrolled agent, or enrolled actuary so
suspended and will be consolidated and
published in the Cumulative Bulletin.
The following individuals have been
placed under suspension from practice
before the Internal Revenue Service by
virtue of the expedited proceeding provisions of the applicable regulations:

Name

Address

Designation

Date of Suspension

Pacchiana, Paul
Rosenberger, David H.
Gudes, Gerald
Donnelly, Richard S.
Burrows, William D.
Klausner, Julius
Glessner, Randy
Aspland, Frieda R.

Chappaqua, NY
Centerville, OH
W. Bloomfield, MI
Asheville, NC
Dallas, TX
Scarsdale, NY
Omak, WA
Greenville, SC

Attorney
Enrolled Agent
CPA
CPA
Attorney
CPA
CPA
CPA

Indefinite from October 9, 1996
Indefinite from October 21, 1996
Indefinite from October 22, 1996
Indefinite from October 22, 1996
Indefinite from November 13, 1996
Indefinite from November 13, 1996
Indefinite from November 13, 1996
Indefinite from November 13, 1996

14

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
applies to both A and B, the prior ruling

Abbreviations
The following abbreviations in current use and
formerly used will appear in material published in
the Bulletin.

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.

ER—Employer.

PR—Partner.

ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.

PRS—Partnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.

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.

FC—Foreign Country.
FICA—Federal Insurance Contribution Act.

Del. Order—Delegation Order.

M—Minor.

DISC—Domestic International Sales Corporation.

Nonacq.—Nonacquiescence.

DR—Donor.

O—Organization.

E—Estate.

P—Parent Corporation.

X—Corporation.

EE—Employee.

PHC—Personal Holding Company.

Y—Corporation.

E.O.—Executive Order.

PO—Possession of the U.S.

Z—Corporation.

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.

REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statements of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.

I.R.B.—Internal Revenue Bulletin.

TFR—Transferor.

LE—Lessee.

T.I.R.—Technical Information Release.

LP—Limited Partner.

TP—Taxpayer.

LR—Lessor.

TR—Trust.
TT—Trustee.
U.S.C.—United States Code.

15

Numerical Finding List1

Court Decisions:

Railroad Retirement Quarterly Rate

Bulletins 1996–27 through 1996–49

2058, 1996–34 I.R.B. 13
2059, 1996–34 I.R.B. 10
2060, 1996–34 I.R.B. 5

1996–29 I.R.B. 14

Announcements:
96–61, 1996–27 I.R.B. 72
96–62, 1996–28 I.R.B. 55
96–63, 1996–29 I.R.B. 18
96–64, 1996–29 I.R.B. 18
96–65, 1996–29 I.R.B. 18
96–66, 1996–29 I.R.B. 19
96–67, 1996–30 I.R.B. 27
96–68, 1996–31 I.R.B. 45
96–69, 1996–32 I.R.B. 38
96–70, 1996–32 I.R.B. 40
96–71, 1996–33 I.R.B. 16
96–72, 1996–33 I.R.B. 16
96–73, 1996–33 I.R.B. 18
96–74, 1996–33 I.R.B. 19
96–75, 1996–34 I.R.B. 29
96–76, 1996–34 I.R.B. 29
96–77, 1996–35 I.R.B. 15
96–78, 1996–35 I.R.B. 15
96–79, 1996–35 I.R.B. 15
96–80, 1996–35 I.R.B. 16
96–81, 1996–36 I.R.B. 13
96–82, 1996–36 I.R.B. 14
96–83, 1996–36 I.R.B. 14
96–84, 1996–36 I.R.B. 14
96–85, 1996–37 I.R.B. 20
96–86, 1996–37 I.R.B. 21
96–87, 1996–37 I.R.B. 21
96–88, 1996–38 I.R.B. 150
96–89, 1996–37 I.R.B. 22
96–90, 1996–37 I.R.B. 22
96–91, 1996–37 I.R.B. 23
96–92, 1996–38 I.R.B. 151
96–93, 1996–38 I.R.B. 151
96–94, 1996–38 I.R.B. 153
96–96, 1996–39 I.R.B. 41
96–97, 1996–39 I.R.B. 41
96–98, 1996–39 I.R.B. 42
96–99, 1996–39 I.R.B. 42
96–100, 1996–40 I.R.B. 10
96–101, 1996–40 I.R.B. 10
96–102, 1996–40 I.R.B. 11
96–103, 1996–40 I.R.B. 12
96–104, 1996–41 I.R.B. 10
96–105, 1996–42 I.R.B. 19
96–106, 1996–42 I.R.B. 23
96–107, 1996–42 I.R.B. 27
96–108, 1996–44 I.R.B. 15
96–109, 1996–43 I.R.B. 76
96–110, 1996–43 I.R.B. 77
96–111, 1996–44 I.R.B. 16
96–112, 1996–45 I.R.B. 7
96–113, 1996–44 I.R.B. 18
96–114, 1996–45 I.R.B. 7
96–115, 1996–45 I.R.B. 9
96–116, 1996–46 I.R.B. 12
96–117, 1996–46 I.R.B. 12
96–118, 1996–46 I.R.B. 12
96–119, 1996–46 I.R.B. 13
96–120, 1996–47 I.R.B. 12
96–121, 1996–47 I.R.B. 12
96–122, 1996–47 I.R.B. 13
96–124, 1996–49 I.R.B. 22
96–125, 1996–48 I.R.B. 21

Delegation Orders:
155 (Rev. 4), 1996–40 I.R.B. 9
Notices:
96–36, 1996–27 I.R.B. 11
96–37, 1996–31 I.R.B. 29
96–38, 1996–31 I.R.B. 29
96–39, 1996–32 I.R.B. 8
96–40, 1996–33 I.R.B. 11
96–41, 1996–35 I.R.B. 6
96–42, 1996–35 I.R.B. 6
96–43, 1996–36 I.R.B. 7
96–44, 1996–36 I.R.B. 7
96–45, 1996–39 I.R.B. 7
96–46, 1996–39 I.R.B. 7
96–47, 1996–39 I.R.B. 8
96–48, 1996–39 I.R.B. 8
96–49, 1996–41 I.R.B. 6
96–50, 1996–41 I.R.B. 6
96–51, 1996–42 I.R.B. 6
96–52, 1996–42 I.R.B. 8
96–54, 1996–44 I.R.B. 13
96–55, 1996–47 I.R.B. 7
96–56, 1996–47 I.R.B. 7
96–57, 1996–47 I.R.B. 9
96–58, 1996–49 I.R.B. 7
96–59, 1996–48 I.R.B. 10
96–60, 1996–49 I.R.B. 7
96–61, 1996–49 I.R.B. 8
96–62, 1996–49 I.R.B. 8
Proposed Regulations:
CO–9–96, 1996–34 I.R.B. 20
CO–24–96, 1996–30 I.R.B. 22
CO–25–96, 1996–31 I.R.B. 30
CO–26–96, 1996–31 I.R.B. 31
FI–59–94, 1996–30 I.R.B. 23
FI–32–95, 1996–34 I.R.B. 21
FI–48–95, 1996–31 I.R.B. 36
FI–28–96, 1996–31, I.R.B. 33
GL–7–96, 1996–33 I.R.B. 13
IA–292–84, 1996–28 I.R.B. 38
IA–26–94, 1996–30 I.R.B. 24
IA–42–95, 1996–49 I.R.B. 21
IA–29–96, 1996–33 I.R.B. 14
INTL–4–95, 1996–36 I.R.B. 8
PS–39–93, 1996–34 I.R.B. 27
PS–22–96, 1996–33 I.R.B. 15
REG–208215–91, 1996–38 I.R.B. 145
REG–209803–95, 1996–44 I.R.B. 14
REG–209826–96, 1996–42 I.R.B. 10
REG–209827–96, 1996–37 I.R.B. 19
REG–245562–96, 1996–41 I.R.B. 8
REG–251520–96, 1996–48 I.R.B. 15
Public Laws:
104–117, 1996–34 I.R.B. 19
104–134, 1996–38 I.R.B. 7
104–168, 1996–38 I.R.B. 8
104–191, 1996–43 I.R.B. 7
104–193, 1996–46 I.R.B. 4

1

A cumulative list of all Revenue Rulings, Revenue Procedures, Treasury Decisions, etc., published in Internal Revenue Bulletins 1996–1
through 1996–26 will be found in Internal Revenue Bulletin 1996–27, dated July 1, 1996.

16

Revenue Procedures:
96–36, 1996–27 I.R.B. 11
96–37, 1996–29 I.R.B. 16
96–39, 1996–33 I.R.B. 11
96–40, 1996–32 I.R.B. 8
96–41, 1996–32 I.R.B. 9
96–42, 1996–32 I.R.B. 14
96–43, 1996–35 I.R.B. 6
96–44, 1996–35 I.R.B. 7
96–45, 1996–35 I.R.B. 12
96–46, 1996–38 I.R.B. 144
96–47, 1996–39 I.R.B. 10
96–48, 1996–39 I.R.B. 10
96–49, 1996–43 I.R.B. 74
96–50, 1996–47 I.R.B. 10
96–51, 1996–47 I.R.B. 10
96–52, 1996–48 I.R.B. 10
96–53, 1996–49 I.R.B. 9
Revenue Rulings:
96–33, 1996–27 I.R.B. 4
96–34, 1996–28 I.R.B. 4
96–35, 1996–31 I.R.B. 4
96–36, 1996–30 I.R.B. 6
96–37, 1996–32 I.R.B. 4
96–38, 1996–33 I.R.B. 4
96–39, 1996–34 I.R.B. 4
96–41, 1996–45 I.R.B. 4
96–42, 1996–35 I.R.B. 4
96–43, 1996–36 I.R.B. 4
96–44, 1996–38 I.R.B. 4
96–45, 1996–39 I.R.B. 5
96–46, 1996–39 I.R.B. 5
96–47, 1996–40 I.R.B. 7
96–48, 1996–40 I.R.B. 4
96–49, 1996–41 I.R.B. 4
96–50, 1996–42 I.R.B. 4
96–51, 1996–43 I.R.B. 5
96–52, 1996–45 I.R.B. 5
96–53, 1996–47 I.R.B. 4
96–54. 1996–47 I.R.B. 5
96–55, 1996–49 I.R.B. 4
Tax Conventions:
1996–28 I.R.B. 36
1996–36 I.R.B. 6
1996–40 I.R.B. 8
Treasury Decisions:
8673, 1996–27 I.R.B. 4
8674, 1996–28 I.R.B. 7
8675, 1996–29 I.R.B. 5
8676, 1996–30 I.R.B. 4
8677, 1996–30 I.R.B. 7
8678, 1996–31 I.R.B. 11
8679, 1996–31 I.R.B. 4
8680, 1996–33 I.R.B. 5
8681, 1996–37 I.R.B. 17
8682, 1996–37 I.R.B. 4
8683, 1996–44 I.R.B. 9
8684, 1996–44 I.R.B. 4
8685, 1996–48 I.R.B. 4

Finding List of Current Action on
Previously Published Items1
Bulletins 1996–27 through 1996–49
*Denotes entry since last publication
Revenue Procedures:
80–27
Modified by
96–40, 1996–32 I.R.B. 8
87–32
Modified by
TD 8680, 1996–33 I.R.B. 5
91–22
Superseded by
96–53, 1996–49 I.R.B. 9
92–20
Modified by
TD 8680, 1996–33 I.R.B. 5
95–16
Superseded by
96–48, 1996–39 I.R.B. 10
95–29
Superseded by
96–36, 1996–27 I.R.B. 11
95–29A
Superseded by
96–36, 1996–27 I.R.B. 11
95–30
Superseded by
96–42, 1996–32 I.R.B. 14
95–46
Superseded by
96–48, 1996–39 I.R.B. 10
96–41
Modified by
Notice 96–49, 1996–41 I.R.B. 6
96–46
Supplemented by
96–51, 1996–47 I.R.B. 10

1

A cumulative finding list for previously published
items mentioned in Internal Revenue Bulletins
1996–1 through 1996–26 will be found in Internal
Revenue Bulletin 1996–27, dated July 1, 1996.

17

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3Aabf14c5ea0843b53. Public record. Not legal advice.