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Bulletin No. 1996–17

April 22, 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.

SPECIAL ANNOUNCEMENT

In addition, the Service is seeking public comments

about these guidelines before they are finalized in the

Internal Revenue Manual.

Announcement 96–32, page 18.

A public hearing will be held on May 22, 1996, on

proposed regulations to implement a provision of the

Tax Reform Act of 1984 permitting the reissuance of

mortgage credit certificates.

Announcement 96–26, page 13.

This announcement provides information to assist

taxpayers in requesting a refund of the excise tax

described in section 4972 of the Code for certain

nondeductible contributions that were retroactively

exempted from the section 4972 excise tax by the

Retirement Protection Act of 1994.

INCOME TAX

T.D. 8660, page 4.

Final regulations under section 1502 of the Code

disallow losses and exclude gain for certain dispositions

and other transactions involving stock of the common

parent of a consolidated group.

Announcement 96–27, page 16.

American Flag Defender, Inc., Berlin, MD, no longer

qualifies as an organization to which contributions are

deductible under section 170 of the Code.

Notice 96–25, page 11.

Electricity produced from certain renewable resources;

calendar year 1996 inflation adjustment factor and

reference prices. This notice announces the calendar

year 1996 inflation adjustment factor and reference

prices for the renewable electricity production credit

under section 45 of the Code.

Announcement 96–28, page 16.

T.D. 8635, 1996–3 I.R.B. 5, relating to nonbank

trustees with respect to the adequacy of net worth

requirements that must be satisfied in order to be or

remain an approved nonbank trustee, is corrected.

Announcement 96–29, page 17.

T.D. 8637, 1996–4 I.R.B. 29, providing final and

temporary rules on backup withholding, statement

mailing requirements, and due diligence, is corrected.

EMPLOYMENT TAXES

T.D. 8661, page 7.

IA–03–94, page 12.

Temporary and proposed regulations under section

6302 of the Code relate to Federal tax deposits by

electronic funds transfer. A public hearing on the

proposed regulations will be held on July 16, 1996.

Announcement 96–30, page 17.

DL–1–95, 1996–6 I.R.B. 28, relating to the disclosure

of returns and return information in connection with the

procurement of property and services for tax administration purposes, is corrected.

Announcement 96–31, page 18.

EE–35–95, 1996–5 I.R.B. 19, relating to proposed

regulations that provide guidance on calculation of an

employee’s accrued benefit derived from the

employee’s contributions to a qualified defined pension

plan, is corrected.

ADMINISTRATIVE

Announcement 96–25, page 13.

Copies of proposed examination guidelines pertaining to

multiemployer plans are now available from the Service.

Finding Lists begin on page 23.

Announcement of Disbarments and Suspensions begins on page 20.

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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 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.

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.

The Service also has the responsibility of applying

and administering the law in a reasonable,

practical manner. Issues should only be raised by

examining officers when they have merit, never

arbitrarily or for trading purposes. At the same

time, the examining officer should never hesitate

to raise a meritorious issue. It is also important

that care be exercised not to raise an issue or to

ask a court to adopt a position inconsistent with

an established Service position.

Administration should be both reasonable and

vigorous. It should be conducted with as little

delay as possible and with great courtesy and

considerateness. It should never try to overreach,

and should be reasonable within the bounds of law

and sound administration. It should, however, be

vigorous in requiring compliance with law and it

should be relentless in its attack on unreal tax

devices and fraud.

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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.

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 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.

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.

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.

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 Bulletin Index-Digest System, a research and

reference service supplementing the Bulletin, may be

obtained from the Superintendent of Documents on a

subscription basis. It consists of four Services: Service

No. 1, Income Tax; Service No. 2, Estate and Gift

Taxes; Service No. 3, Employment Taxes; Service No.

4, Excise Taxes. Each Service consists of a basic

volume and a cumulative supplement that provides (1)

finding lists of items published in the Bulletin, (2)

digests of revenue rulings, revenue procedures, and

other published items, and (3) indexes of Public Laws,

Treasury Decisions, and Tax Conventions.

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.

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

Section 1502.—Regulations

26 CFR 1.1502–13: Intercompany transactions.

T.D. 8660

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

Consolidated Groups—Intercompany

Transactions and Related Rules

AGENCY: Internal Revenue Service

(IRS), Treasury.

ACTION: Final regulations.

SUMMARY: This document contains

final regulations disallowing losses and

excluding gain for certain dispositions

and other transactions involving stock

of the common parent of a consolidated

group.

DATES: These regulations are effective

March 14, 1996.

For dates of applicability, see the

effective date provision of these

regulations.

FOR FURTHER INFORMATION

CONTACT: Victor Penico or Richard

Osborne of the Office of Assistant

Chief Counsel (Corporate), (202)

622-7750 or (202) 622-7770 (not tollfree numbers).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

The collections of information contained in these final regulations have

been reviewed and approved by the

Office of Management and Budget in

accordance with the Paperwork Reduction Act (44 U.S.C. 3507) under

control number 1545–1433. Responses

to these collections of information are

required to obtain a benefit, the avoidance of a possible gain because of

basis adjustments relating to built-in

loss.

An agency may not conduct or

sponsor, and a person is not required to

respond to, a collection of information

unless the collection of information

displays a valid control number.

The estimated average annual burden

per respondent is 15 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, T: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,

D.C. 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

On July 12, 1995, the IRS and

Treasury issued proposed and temporary regulations disallowing loss incurred by a member (M) of a consolidated group with respect to the stock of

the common parent (P stock). The

regulations also eliminate gain in certain transactions by M with respect to

P stock. The regulations are effective

for transactions occurring on or after

July 12, 1995.

The IRS received comments on the

proposed regulations and held a public

hearing on December 11, 1995. After

consideration of the comments and the

statements made at the hearing, the IRS

and Treasury adopt the proposed regulations with revisions in this Treasury

decision. The significant comments and

changes are discussed below.

Explanation of provisions

Scope of the regulations

The proposed regulations disallow all

losses on P stock and eliminate gain in

specified circumstances. Some commentators suggested that the regulations

should treat gain and loss more symmetrically. Some suggested the regulations should achieve this goal by

eliminating gain in all circumstances.

Others suggested the regulations should

disallow loss only in ‘‘abusive’’

circumstances.

Eliminating gain in all circumstances

would effectively require complete single entity treatment of P stock. Implementing such a system would significantly increase the complexity of the

consolidated return regulations. Notice

94–49 (1994–1 C.B. 358), included a

detailed discussion of issues relating to

the single entity treatment of P stock.

Limiting the loss disallowance rule

to ‘‘abusive situations’’ would allow

consolidated groups to rely on the

separate-entity treatment of stock to

claim losses and single-entity treatment

to avoid gains. For example, taxpayers

might plan to take advantage of separate entity treatment by having M

purchase P stock. If the value of the

stock has gone down at a time when

the group wants to issue equity, M will

sell its P stock at a loss (and claim the

loss). If the value of the stock has gone

up, the group can take advantage of

single entity treatment by having P sell

the stock, and no gain would be

recognized under section 1032. The

same would hold true if instead P had

acquired M already owning P stock.

Commentators did not suggest any

generally applicable method of distinguishing between transactions in

which loss should be allowed and those

in which loss should not be allowed.

The IRS and Treasury have therefore

concluded that the final regulations

should retain the general approach of

the proposed regulations.

Built-in losses

Some commentators suggested that if

M joins the group at a time when it

holds P stock with a built-in loss the

loss should be allowed because it

accrued outside the group. The final

regulations do not allow this loss

because doing so without ensuring that

the built-in gain is taxed would allow

the same selectivity and inconsistencies

that the regulation is designed to

prevent. In addition, allowing the loss

would require tracing, which is inconsistent with the approaches to similar

issues in §§1.1502–20 and 1.1502–32.

Commentators further suggested that

interactions between the proposed regulations and §1.1502–32 could cause

the group to recognize an artificial gain

from the purchase of a corporation

owning depreciated P stock. If M joins

the group at a time when it holds P

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stock with a built-in loss and M

subsequently sells the stock, P will

have a downward basis adjustment in

its M stock because of the disallowed

loss. See §1.1502–32(b)(3)(iii)(A). The

commentators asserted that this basis

adjustment would be inappropriate if

the group has a cost basis in M stock

because the basis of M will reflect the

value of the P stock at the time of

acquisition (rather than M’s basis in the

P stock). To address this problem, the

final regulations allow the built-in loss

to be waived immediately before M

joins the group. The loss waiver is

modeled after a similar provision in

§1.1502–32(b)(4). The election, however, is limited to direct acquisitions of

a corporation holding P stock in a cost

basis transaction.

Gain relief

Commentators suggested that the

gain relief should be broadened. Some

suggested that the requirement that M

receive the P stock in a capital contribution or section 351(a) transaction

be eliminated. Others suggested elimination of the requirement that M dispose of the P stock immediately.

Commentators also suggested that the

gain relief should apply to options and

warrants in P stock, and not merely to

P stock.

The final regulations retain the requirements for gain relief but extend

the relief to positions in P stock. Any

further expansion of the gain relief

would require additional limitations and

complexities.

For instance, if M were not required

to dispose of the P stock immediately,

the regulations would have to require

that M have no minority shareholders.

If M had minority shareholders, the

gain relief mechanism (treating cash as

contributed to M followed by a purchase of the stock by M) would allow

P a full basis adjustment in M stock for

post-contribution appreciation rather

than a pro rata adjustment as required

by §1.1502–32 in the case of minority

shareholders. Amending the mechanism

to allow only pro rata adjustments (for

example, through a direct basis adjustment rather than a cash transaction)

would create further complexities, such

as the interaction with §1.1502–20.

Expanding gain relief would require

further adjustments if M stock were

sold to another member of the group.

For example, if B purchases the stock

of M from another member, B’s basis

in M will reflect the value of any P

stock held by M. Thus, an increase to

B’s basis in the stock of M when M

disposes of P stock would be unwarranted. Additional special rules would

be needed if M were permitted to

acquire P stock by purchase rather than

through a capital contribution. Moreover, the IRS and Treasury believe that

in many cases gain on P stock is

avoidable without further expansion of

the regulations. See, e.g., §1.1032–2(b)

(no gain or loss on M’s use of certain

P stock in triangular reorganizations).

Therefore, the final regulations retain

the requirements of the proposed regulations for gain relief.

In addition, commentators claimed

that the relief when M is newly formed

was unclear. The final regulations

clarify that M can be newly formed as

part of the plan to dispose of P stock.

Dealers in P stock

Some commentators suggested that if

a subsidiary is a dealer in P stock, it

should be allowed to recognize losses

from its dealing activity. They argued

that dealing in P stock increases the

liquidity of the stock and that the

proposed regulations would curtail this

activity by forcing the recognition of

gain but disallowing loss with respect

to P stock.

In response to these comments, the

final regulations include an exception

for dealers in P stock or positions in P

stock. Under the final regulations, a

dealer in P stock or positions recognizes both gain and loss on shares of

the stock to the extent taken into

account because of section 475(a) (or

1256(a) in the case of dealer equity

options). To be eligible for this exception, M must regularly trade in P stock

(of the same class) in the ordinary

course of its business as a dealer. In

addition, the gain or loss on a share is

eligible only to the extent it is taken

into account under section 475(a) (or in

the case of dealer equity options,

section 1256(a) to the extent that it

would be taken into account under the

principles of section 475), and the basis

of the share of stock must not be

adjusted by reference to the basis of

any other property (for example, under

§1.302–2) or by reference to income,

gain, deduction or loss from other

property. For example, loss that is

suspended under section 475(b)(3) and

that is recognized under section 1001

as the result of a disposition of the

security is not eligible for the relief,

but loss taken into account under

section 475(a) immediately before a

taxpayer ceases to be the owner of the

security is eligible for relief. Finally,

relief is not available if either M or any

other member of the group has structured or engaged in any transaction

while a member (or in anticipation of

becoming a member) during the taxable

year or in any year within the preceding five taxable years that is open for

assessment under section 6501 with a

principal purpose of avoiding gain or

creating loss on P stock subject to

section 475(a).

Positions in P stock

In response to comments, the final

regulations clarify that the scope of

loss disallowance is coextensive with

the scope of section 1032. For example, cash-settled options are within the

scope of loss disallowance. See Rev.

Rul. 88–31 (1988–1 C.B. 302). No

inference is intended as to the extent to

which section 1032 and these regulations apply to derivative positions in P

stock other than options.

One commentator argued that the

loss disallowance rule should not apply

to options in P stock because the

selectivity available for stock is not

present with respect to options. The

final regulations do not adopt this

approach. If M purchases an option to

acquire P stock and the option expires

when it is worthless, M has a loss. If

the option is in the money, M can

purchase the P stock and hold it

indefinitely. Thus, the group would

have the ability to recognize losses

while avoiding gains.

Effective dates

The final regulations apply to gain or

loss taken into account on or after July

12, 1995, and to transactions (such as a

member leaving the group) occurring

on or after July 12, 1995. Thus, the

regulations are intended to cover the

same gain, loss and transactions covered by the rules published in 1995–32

I.R.B. 47. If, however, a taxpayer takes

a gain or loss into account, or engages

in a transaction, on or after July 12,

1995, during a tax year ending prior to

December 31, 1995, the taxpayer may

treat the gain, loss or transaction under

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the rules of the temporary rules published in 1995–32 I.R.B. 47 instead of

under the rules of the final regulations.

Special Analysis

It has been determined that this

Treasury decision is not a significant

regulatory action as defined in EO

12866. Therefore, a regulatory assessment is not required. It is hereby

certified that these regulations do not

have a significant economic impact on

a substantial number of small entities.

This certification is based on the fact

that these regulations will primarily

affect affiliated groups of corporations

that have elected to file consolidated

returns, which tend to be larger businesses. The regulations do not significantly alter the reporting or recordkeeping duties of small entities. Therefore,

a Regulatory Flexibility Analysis under

the Regulatory Flexibility Act (5

U.S.C. chapter 6) is not required.

Pursuant to section 7805(f) of the

Internal Revenue Code, the notice of

proposed rulemaking preceding these

regulations was submitted to the Small

Business Administration for comment

on its impact on small business.

Adoption of Amendments to the

Regulations

Accordingly, 26 CFR part 1 is

amended as follows:

PART 1—INCOME TAXES

Paragraph 1. The authority citation

for part 1 is amended by revising the

entry for §1.1502–13 to read as

follows:

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

Section 1.1502–13 also issued under

26 U.S.C. 1502. * * *

Par. 2. In §1.267(f)–1(k), the first

sentence is amended by removing the

reference ‘‘1.1502–13T(f)(6)’’ and

adding ‘‘1.1502–13(f)(6)’’ in its place.

Par. 3. Section 1.1502–13(f)(6) is

added to read as follows:

§1.1502–13 Intercompany

transactions.

(f) * * *

(6) Stock of common parent. In

addition to the general rules of this

section, this paragraph (f)(6) applies to

parent stock (P stock) and positions in

P stock held or entered into by another

member. For this purpose, P stock is

any stock of the common parent held

by another member or any stock of a

member (the issuer) that was the

common parent if the stock was held

by another member while the issuer

was the common parent.

(i) Loss stock—(A) Recognized loss.

Any loss recognized, directly or indirectly, by a member with respect to P

stock is permanently disallowed and

does not reduce earnings and profits.

See §1.1502–32(b)(3)(iii)(A) for a corresponding reduction in the basis of the

member’s stock.

(B) Other cases. If a member, M,

owns P stock, the stock is subsequently

owned by a nonmember, and, immediately before the stock is owned by

the nonmember, M’s basis in the share

exceeds its fair market value, then, to

the extent paragraph (f)(6)(i)(A) of this

section does not apply, M’s basis in the

share is reduced to the share’s fair

market value immediately before the

share is held by the nonmember. For

example, if M owns shares of P stock

with a $100x basis and M becomes a

nonmember at a time when the P

shares have a value of $60x, M’s basis

in the P shares is reduced to $60x

immediately before M becomes a nonmember. Similarly, if M contributes the

P stock to a nonmember in a transaction subject to section 351, M’s basis

in the shares is reduced to $60x immediately before the contribution. See

§1.1502–32(b)(3)(iii)(B) for a corresponding reduction in the basis of M’s

stock.

stock—(1) In general. If a nonmember

that owns P stock with a basis in

excess of its fair market value becomes

a member of the P consolidated group

in a qualifying cost basis transaction,

the group may make an irrevocable

election to reduce the basis of the P

stock to its fair market value immediately before the nonmember becomes

a member of the P group. If the nonmember was a member of another consolidated group immediately before

becoming a member of the P group, the

reduction in basis is treated as occurring immediately after it ceases to be a

member of the prior group. A qualifying cost basis transaction is the purchase (i.e., a transaction in which basis

is determined under section 1012) by

members of the P consolidated group

(while they are members) in a 12–

month period of an amount of the

nonmember’s stock satisfying the requirements of section 1504(a)(2).

(2) Election. The election described

in this paragraph (6)(i)(C) must be

made in a separate statement entitled

‘‘ELECTION TO REDUCE BASIS OF

P STOCK UNDER §1.1502–13(f)(6).’’

The statement must be filed with the P

consolidated group’s return for the year

in which the nonmember becomes a

member, and it must be signed by both

P and the nonmember. The statement

must identify the fair market value of,

and the amount of the basis reduction

in, the P stock.

(ii) Gain stock. If a member, M,

would otherwise recognize gain on a

qualified disposition of P stock, then

immediately before the qualified disposition, M is treated as purchasing the

P stock from P for fair market value

with cash contributed to M by P (or, if

necessary, through any intermediate

members). A disposition is a qualified

disposition only if—

(A) The member acquires the P

stock directly from the common parent

(P) through a contribution to capital or

a transaction qualifying under section

351(a) (or, if necessary, through a

series of such transactions involving

only members);

(B) Pursuant to a plan, the member

transfers the stock immediately to a

nonmember that is not related, within

the meaning of section 267(b) or

707(b), to any member of the group;

meaning of section 7701(a)(42);

(D) The P stock is not exchanged

for P stock;

(E) P neither becomes nor ceases to

be the common parent as part of, or in

contemplation of, the disposition or

plan; and

(F) M is neither a nonmember that

becomes a member nor a member that

becomes a nonmember as part of, or in

contemplation of, the disposition or

plan.

(iii) Mark-to-market of P stock.

Paragraphs (f)(6)(i) and (ii) of this

section shall not apply to any gain or

loss from a share of P stock held by a

member, M, if—

(A) M regularly trades in P stock (of

the same class) with customers in the

ordinary course of its business as a

dealer;

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(B) The gain or loss on the share is

taken into account by M pursuant to

section 475(a);

adjusted by reference to the basis of

any other property or by reference to

income, gain, deduction, or loss from

other property; and

(D) Neither M nor any other member of the group has structured or

engaged in any transaction while a

member (or in anticipation of becoming

a member), during the taxable year or

in any year within the preceding five

taxable years that is open for assessment under section 6501, with a

principal purpose of avoiding gain or

creating loss on P stock subject to

section 475(a).

(iv) Options, warrants, and other

positions—(A) In general. This paragraph (f)(6) applies with appropriate

adjustments to positions in P stock to

the extent that P’s gain or loss from an

equivalent position would not be recognized under section 1032. Thus, if M

purchases an option to buy or sell P

stock and sells the option at a loss, the

loss is permanently disallowed under

paragraph (f)(6)(i)(A) of this section.

Similarly, if M is the grantor of such

an option and becomes a nonmember,

then the principles of paragraph

(f)(6)(i)(B) of this section apply to the

extent that M would recognize loss

from cash settlement of the option at

its fair market value immediately before M becomes a nonmember, and

proper adjustments must be made in the

amount of any gain or loss subsequently realized from the position by

M. If P grants M an option to acquire

P stock in a transaction meeting the

requirements of paragraph (f)(6)(ii) of

this section, M is treated as having

purchased the option from P for fair

market value with cash contributed to

M by P.

(B) Mark-to-market of positions in P

stock. For purposes of paragraph

(f)(6)(iii) of this section, gain or loss

with respect to a position taken into

account under section 1256(a) is treated

as taken into account under section

475(a) to the extent that the gain or

loss would be taken into account under

the principles of section 475.

(v) Effective date. This paragraph

(f)(6) applies to gain or loss taken into

account on or after July 12, 1995, and

to transactions occurring on or after

July 12, 1995. For example, if S sells P

stock to B at a loss prior to July 12,

1995, and B sells the P stock to a

nonmember after July 12, 1995, S’s

loss is disallowed because it is taken

into account after July 12, 1995. If a

taxpayer takes a gain or loss into

account or engages in a transaction on

or after July 12, 1995, during a tax

year ending prior to December 31,

1995, the taxpayer may treat the gain

or loss or the transaction under the

rules of §1.1502–13T(f)(6) (published

in 1995–32 I.R.B. 47), instead of under

the rules of this paragraph (f)(6).

voluntary payment of certain Federal

taxes by EFT. The regulations would

provide the public with additional

guidance needed to make deposits by

EFT and would affect certain taxpayers

not previously required to make deposits by EFT. The text of these

temporary regulations also serves as the

text of a cross-reference notice of

proposed rulemaking on this subject in

the Proposed Rules section of this issue

of the Federal Register.

EFFECTIVE DATE: March 21, 1996.

Par. 5. In §1.1502–13(g)(2)(i)(B), the

last sentence is amended by removing

the language ‘‘paragraph (f)(4) of this

section and §1.1502–13T(f)(6)’’ and

adding ‘‘paragraphs (f)(4) and (6) of

this section.’’

Margaret Milner Richardson,

Commissioner of Internal Revenue.

Approved March 8, 1996.

Leslie Samuels,

Assistant Secretary of the Treasury

(Tax Policy).

(Filed by the Office of the Federal Register on

March 13, 1996, 8:45 a.m., and published in

the issue of the Federal Register for March 14,

1996, 61 F.R. 10447)

Section 6302.—Mode or Time of

Collection

26 CFR 1.6302–4T: Use of financial

institutions in connection with individual

income taxes (temporary).

T.D. 8661

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1 and 31

Federal Tax Deposits by Electronic

Funds Transfer

AGENCY: Internal Revenue Service

(IRS), Treasury.

ACTION: Temporary regulations.

SUMMARY: This document contains

temporary regulations relating to the

deposit of Federal taxes by electronic

funds transfer (EFT) under section

6302 of the Internal Revenue Code.

The document also includes temporary

regulations providing authority for the

FOR FURTHER INFORMATION

CONTACT: Vincent G. Surabian, 202–

622–6232 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

On July 11, 1994, the IRS issued

Treasury Decision 8553 (59 FR 35414),

setting forth temporary regulations relating to the deposit of Federal taxes by

EFT. Those temporary regulations explained which taxpayers must make

deposits by electronic funds transfer,

which taxes must be so deposited, and

when the deposits must commence. The

text of those temporary regulations also

served as the text of a cross-reference

notice of proposed rulemaking published in the same issue of the Federal

The IRS received many comment

letters in response to the publication of

those temporary regulations. In addition, a number of oral comments were

made at the public hearing held on

October 3, 1994. With limited exceptions, those comments will not be

addressed in this document, but instead

will be addressed in final regulations

that the IRS expects to publish in the

near future.

Under the temporary regulations currently in place, the requirement to

begin EFT deposits is based on the

taxpayer’s total deposits of the taxes

imposed by chapters 21 (FICA taxes),

22 (railroad retirement taxes) and 24

(income tax withheld at source) of the

Internal Revenue Code during certain

‘‘determination periods.’’ If the taxpayer’s deposits of those taxes during a

determination period exceed a prescribed dollar threshold, the taxpayer

must begin to deposit by EFT on and

after the applicable effective date prescribed in the temporary regulations,

unless otherwise exempted.

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The amendments to the temporary

regulations set forth in this document

provide a special rule for any taxpayer

that does not make deposits of the

taxes imposed by chapters 21, 22, and

24, but that does make deposits of

other taxes required to be deposited

pursuant to regulations issued under

section 6302 (for instance, corporate

income taxes). If the taxpayer’s total

deposits for all other depository taxes

during a prescribed determination

period exceed a prescribed dollar

threshold, the taxpayer must begin

depositing by EFT on and after the

applicable effective date prescribed in

these amendments to the temporary

regulations, unless otherwise exempted.

(A taxpayer will become subject to the

EFT requirement for the January 1, 1998,

applicable effective date by exceeding

the threshold amount during either calendar year 1995 or calendar year 1996.)

The phase-in schedule is as follows:

Threshold Amount

Determination Period

Applicable Effective Date

$50 thousand

$20 thousand

1-1-95 to 12-31-95

1-1-96 to 12-31-96

1-1-97 to 12-31-97

January 1, 1998

January 1, 1999

The current temporary regulations

provide that a taxpayer subject to the

EFT requirement must use EFT for all

deposits required to be made on and

after the applicable effective date. This

requirement may subject a taxpayer to

two different modes of deposit with

respect to the same return period. For

example, assume an employer is required to deposit by EFT beginning

with the January 1, 1997, applicable

effective date. The employer pays its

employees weekly and has a paydate

on December 31, 1996. The employment taxes incurred for that paydate

would be reportable on the fourth

quarter 1996 Form 941, but the due

date for the deposit of those taxes

would occur in early January 1997.

Under the current rule, all the deposits

relating to the fourth quarter 1996

Form 941 would be made by paper

coupon (FTD coupon) with the exception of the deposit for the December 31

payroll, which would be made by EFT.

For purposes of consistency, this rule is

being changed with respect to the

January 1, 1997, applicable effective

date and thereafter to provide that the

first deposit required to be made by

EFT is the first deposit with respect to

a deposit obligation incurred for a

return period beginning on or after the

applicable effective date. Thus, under

the revised rule, the deposit with

respect to the December 31 paydate in

the example would be made by FTD

coupon rather than by EFT.

The current temporary regulations

provide that a deposit by EFT is

deemed made (i) at the time a debit is

made (the amount is withdrawn from

the taxpayer’s account) if the Government’s authorized financial agent debits

the taxpayer’s account; or (ii) in all

other cases, at the time the funds are

credited to the Treasury’s general account. Comments by the Federal Reserve Board, the Financial Management

Service, and IRS personnel recommended a clarification of that provision. Based on those recommendations,

the current temporary regulations are

amended to provide that a deposit by

EFT is deemed made (i) at the time a

debit is made (the amount is withdrawn

from the taxpayer’s account and not

returned or reversed) if the Government’s authorized agent originates a

debit entry which instructs the taxpayer’s financial institution to debit the

taxpayer’s account for a Federal tax

payment; or (ii) in all other cases

(assuming the amount is not returned

or reversed), either at the time the

funds are paid into the Treasury’s

general account at the Federal Reserve

Bank of New York or at the time the

funds are invested under Treasury’s

Tax and Loan program (see 31 CFR

Part 203). Investment occurs when the

funds are credited by the Federal

Reserve Bank to the depositary institution’s note balance.

These temporary regulations also

define the term taxpayer. For purposes

of the EFT requirement, a taxpayer is

any person required to deposit federal

taxes, including not only individuals,

but also any trust, estate, partnership,

association, company or corporation.

This definition responds to numerous

inquiries following the issuance of the

current temporary regulations.

Sections 31.6302–1T(h)(2) (describing the taxes required to be deposited

by EFT) and 31.6302–1T(h)(8) (describing when a deposit of tax by EFT

is deemed to be a payment of tax) have

been revised solely for purposes of

clarity. No substantive change is being

made to either of the provisions.

These temporary regulations allow

individual taxpayers to make voluntary

payments of income tax by EFT, even

though individual income tax is not

required to be deposited with a government depositary. The voluntary EFT

payments are to be made in accordance

with instructions provided in procedures to be prescribed by the Commissioner at a future date.

Special Analyses

It has been determined that this

Treasury decision is not a significant

regulatory action as defined in EO

12866. Therefore, a regulatory assessment is not required. It also has been

determined that section 553(b) of the

Administrative Procedure Act (5 U.S.C.

chapter 5) and the Regulatory Flexibility Act (5 U.S.C. chapter 6) do not

apply to these rules and, therefore, a

Regulatory Flexibility Analysis is not

required. Pursuant to section 7805(f) of

the Internal Revenue Code, a copy of

these temporary regulations will be

submitted to the Chief Counsel for

Advocacy of the Small Business Administration for comment on their

impact on small business.

Drafting Information

The principal author of these regulations is Vincent G. Surabian, Office of

the Assistant Chief Counsel (Income

Tax & Accounting), IRS. However,

other personnel from the IRS and

Treasury Department participated in

their development.

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Adoption of Amendments to the

Regulations.

Accordingly, 26 CFR parts 1 and 31

are amended as follows:

PART 1—INCOME TAXES

Paragraph 1. The authority citation

for part 1 is amended by adding an

entry in numerical order to read as

follows:

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

Section 1.6302–4T also issued under

26 U.S.C. 6302(a) and (c). * * *

Par. 2. Section 1.6302–4T is added

to read as follows:

§1.6302–4T Use of financial

institutions in connection with

individual income taxes (temporary).

Voluntary payments by electronic

funds transfer. An individual may

voluntarily remit by electronic funds

transfer all payments of tax imposed by

subtitle A of the Code, including any

payments of estimated tax. Such payments must be made in accordance

with procedures to be prescribed by the

Commissioner.

PART 31—EMPLOYMENT TAXES

AND COLLECTION OF INCOME

TAX AT SOURCE

Par. 3. The authority citation for part

31 continues to read in part as follows:

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

Par. 4. Section 31.6302–1T is

amended as follows:

1. Paragraph (h)(1)(ii)(A) is redesignated as paragraph (h)(1)(ii)(A)(1); the

first sentence in newly designated paragraph (h)(1)(ii)(A)(1) is removed, and

three new sentences are added in its

place; and, in the last sentence of the

newly designated paragraph, the text

preceding the table is revised.

2. Paragraph (h)(1)(ii)(A)(2) is

added.

3. Paragraphs (h)(2), (h)(3), (h)(7)

and (h)(8) are revised.

The additions and revisions read as

follows:

§31.6302–1T Federal tax deposit

rules for withheld income taxes and

taxes under the Federal Insurance

Contributions Act (FICA)—deposits

required to be made by electronic

funds transfer after December 31,

1994 (temporary).

(h) * * * (1) * * *

(ii) Periods after December 31,

1994. (A)(1) Taxpayers whose aggregate deposits of the taxes imposed by

Chapters 21 (Federal Insurance Contributions Act), 22 (Railroad Retirement

Tax Act), and 24 (Collection of Income

Tax at Source on Wages) of the

Internal Revenue Code during a 12–

month determination period exceed the

applicable threshold amount are required to deposit all depository taxes

described in paragraph (h)(2) of this

section by electronic funds transfer (as

defined in paragraph (h)(3) of this

section) unless exempted under paragraph (h)(4) of this section. If the

applicable effective date is January 1,

1995, or January 1, 1996, the requirement to deposit by electronic funds

transfer applies to all deposits required

to be made on and after the applicable

effective date. If the applicable effective date is January 1, 1997, or thereafter, the requirement to deposit by

electronic funds transfer applies to all

deposits required to be made with

respect to deposit obligations incurred

for return periods beginning on and

after the applicable effective date.

* * * The threshold amounts, determination periods and applicable effective dates for purposes of this paragraph (h)(1)(ii)(A)(1) are as follows:

***

(2) Unless exempted under paragraph (h)(4) of this section, a taxpayer

that does not deposit any of the taxes

imposed by chapters 21, 22, and 24

during the applicable determination

periods set forth in paragraph (h)(1)(ii)(A)(1) of this section, but that does

make deposits of other depository taxes

(as described in paragraph (h)(2) of this

section), is nevertheless subject to the

requirement to deposit by electronic

funds transfer if the taxpayer’s aggregate deposits of all depository taxes

exceed the threshold amount set forth

in this paragraph (h)(1)(ii)(A)(2) during

an applicable 12–month determination

period. This requirement to deposit by

electronic funds transfer applies to all

depository taxes due with respect to

deposit obligations incurred on and

after the applicable effective date. The

threshold amount, determination periods, and applicable effective dates for

purposes of this paragraph (h)(1)(ii)(A)(2) are as follows:

Threshold Amount

Determination Period

Applicable Effective Date

$50 thousand

$20 thousand

1-1-95 to 12-31-95

1-1-96 to 12-31-96

1-1-97 to 12-31-97

January 1, 1998

January 1, 1999

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(2) Taxes required to be deposited

by electronic funds transfer. The requirement to deposit by electronic

funds transfer under paragraph

(h)(1)(ii) of this section applies to all

the taxes required to be deposited

under §§1.6302–1, 1.6302–2, and

1.6302–3 of this chapter; §§31.6302–1,

31.6302–2, 31.6302–3, 31.6302–4, and

31.6302(c)–3; and §40.6302(c)–1 of

this chapter.

(3) Definitions—(i) Electronic funds

transfer. An electronic funds transfer is

any transfer of depository taxes made in

accordance with Revenue Procedure 94–

48 (1994–2 C.B. 694), (see §601.601(d)(2) of this chapter), or in accordance

with procedures subsequently prescribed

by the Commissioner.

(ii) Taxpayer. For purposes of this

section, a taxpayer is any person

required to deposit federal taxes, including not only individuals, but also

any trust, estate, partnership, association, company or corporation.

(7) Time deemed deposited. A deposit of taxes by electronic funds

transfer will be deemed made—

(i) At the time a debit is made (the

amount is withdrawn from the taxpayer’s account and not returned or

reversed) if the Government’s authorized agent originates a debit entry

which instructs the taxpayer’s financial

institution to debit the taxpayer’s account for a Federal tax payment; or

(ii) In all other cases (assuming the

amount is not returned or reversed),

either at the time that the funds are

paid into the Treasury’s general account at the Federal Reserve Bank of

New York, or at the time that the funds

are invested under Treasury’s Tax and

Loan program (see 31 CFR Part 203).

Investment occurs when the funds are

credited by the Federal Reserve Bank

to the depositary institution’s note

balance.

(8) Time deemed paid. In general, an

amount deposited under this paragraph

(h) will be considered to be a payment

of tax on the last day prescribed for

filing the applicable return for the

return period (determined without regard to any extension of time for filing

the return) or, if later, at the time

deemed deposited under paragraph

(h)(7) of this section. In the case of the

taxes imposed by chapters 21 and 24 of

the Internal Revenue Code, solely for

purposes of section 6511 and the

regulations thereunder (relating to the

period of limitation on credit or refund), if an amount is deposited prior

to April 15th of the calendar year

immediately succeeding the calendar

year that includes the period for which

the amount was deposited, the amount

will be considered paid on April 15th.

Margaret Milner Richardson,

Commissioner of Internal Revenue.

Approved December 22, 1995.

Leslie Samuels,

Assistant Secretary of the Treasury.

(Filed by the Office of the Federal Register on

March 20, 1996, 8:45 a.m., and published in

the issue of the Federal Register for March 21,

1996, 61 F.R. 11548)

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Part III. Administrative, Procedural, and Miscellaneous

Renewable Electricity Production

Credit, Publication of Inflation

Adjustment Factor and Reference

Prices for Calendar Year 1996

Notice 96–25

This notice publishes the inflation

adjustment factor and reference prices

for calendar year 1996 for the renewable electricity production credit under

§ 45(a) of the Internal Revenue Code.

The 1996 inflation adjustment factor

and reference prices are used in determining the availability of the credit.

The 1996 inflation adjustment factor

and reference prices apply to calendar

year 1996 sales of kilowatt-hours of

electricity produced in the United

States or a possession thereof from

qualified energy resources.

BACKGROUND

Section 45(a) provides that the renewable electricity production credit

for any tax year is an amount equal to

the product of 1.5 cents multiplied by

the kilowatt-hours of specified

electricity produced by the taxpayer

and sold to an unrelated person during

the tax year. This electricity must be

produced from qualified energy resources and at a qualified facility

during the 10-year period beginning on

the date the facility was originally

placed in service.

Section 45(b)(1) provides that the

amount of the credit determined under

§ 45(a) is reduced by an amount that

bears the same ratio to the amount of

the credit as (A) the amount by which

the reference price for the calendar

year in which the sale occurs exceeds 8

cents bears to (B) 3 cents. Under

§ 45(b)(2), the 1.5 cents in § 45(a) and

the 8 cents in § 45(b)(1) are each

adjusted by multiplying the amount by

the inflation adjustment factor for the

calendar year in which the sale occurs.

Section 45(c)(1) defines qualified

energy resources as wind and closedloop biomass. Section 45(c)(3) defines

a qualified facility as any facility

owned by the taxpayer that originally is

placed in service after December 31,

1993 (December 31, 1992, in the case

of a facility using closed-loop biomass

to produce electricity), and before July

1, 1999.

Section 45(d)(2)(A) requires that the

Secretary not later than April 1 of each

calendar year determine and publish in

the Federal Register the inflation adjustment factor and the reference prices

for the calendar year. As required by

§ 45(d)(2)(A), the inflation adjustment

factor and the reference prices for the

1996 calendar year were published in

the Federal Register on March 29,

1996, (61 Fed. Reg. 14208).

Section 45(d)(2)(B) defines the inflation adjustment factor for a calendar

year as the fraction the numerator of

which is the GDP implicit price deflator for the preceding calendar year and

the denominator of which is the GDP

implicit price deflator for the calendar

year 1992. The term ‘‘GDP implicit

price deflator’’ means the most recent

revision of the implicit price deflator

for the gross domestic product as

computed and published by the Department of Commerce before March 15 of

the calendar year.

Section 45(d)(2)(C) provides that the

reference price is the Secretary’s determination of the annual average contract

price per kilowatt hour of electricity

generated from the same qualified

energy resource and sold in the previous year in the United States. Only

contracts entered into after December

31, 1989, are taken into account.

electricity from closed-loop biomass

energy resources. The reference price

for electricity produced from closedloop biomass, as defined in § 45(c)(2),

is based on a determination under

§ 45(d)(2)(C) that in calendar year

1995 there were no sales of electricity

generated from closed-loop biomass

energy resources under contracts entered into after December 31, 1989.

PHASE-OUT CALCULATION

Because the 1996 reference prices

for electricity produced from wind and

closed-loop biomass energy resources

do not exceed 8 cents per kilowatt hour

multiplied by the inflation adjustment

factor, the phaseout of the credit

provided in § 45(b)(1) does not apply

to electricity produced from wind or

closed-loop biomass energy resources

sold during calendar year 1996.

CREDIT AMOUNT

As required by § 45(b)(2), the 1.5¢

amount in § 45(a)(1) is adjusted by

multiplying such amount by the inflation adjustment factor for the calendar

year in which the sale occurs. If any

amount as increased under the preceding sentence is not a multiple of 0.1¢,

such amount is rounded to the nearest

multiple of 0.1¢. Under the calculation

required by § 45(b)(2), the renewable

electricity production credit for calendar year 1996 is 1.6¢ per kilowatt hour

on the sale of electricity produced from

closed-loop biomass and wind energy

resources.

INFLATION ADJUSTMENT

FACTOR AND REFERENCE

PRICES

DRAFTING INFORMATION

CONTACT

The inflation adjustment factor for

calendar year 1996 is 1.0750. The

reference prices for calendar year 1996

are 5.5 cents per kilowatt-hour for

facilities producing electricity from

wind energy resources and 0 cents per

kilowatt-hour for facilities producing

The principal author of this notice is

David A. Selig of the Office of

Assistant Chief Counsel (Passthroughs

and Special Industries). For further

information regarding this notice contact Mr. Selig on (202) 622-3040 (not a

toll-free call).

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Part IV. Items of General Interest

Notice of Proposed Rulemaking and

Notice of Public Hearing

SUPPLEMENTARY INFORMATION:

Background

Federal Tax Deposits by Electronic

Funds Transfer

IA–03–94

AGENCY: Internal Revenue Service

(IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary

regulations and notice of public

hearing.

SUMMARY: In the Rules and Regulations section of this issue of the

Federal Register, the IRS is issuing

temporary regulations relating to the

deposit of Federal taxes by electronic

funds transfer under section 6302 of

the Internal Revenue Code. The text of

the temporary regulations also serves as

the comment document for this notice

of proposed rulemaking. This document

also provides notice of a public hearing

on these proposed regulations.

DATES: Written comments and outlines of topics to be discussed at the

public hearing scheduled for July 16,

1996, beginning at 10 a.m., must be

received by June 19, 1996.

ADDRESSES: Send submissions to:

CC:DOM:CORP:R (IA–03–94), Room

5228, Internal Revenue Service, POB

7604, Ben Franklin Station, Washington, DC 20044. In the alternative,

submissions may be hand delivered

between the hours of 8 a.m. and 5 p.m.

to: CC:DOM:CORP:R (IA–03–94),

Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW.,

Washington, DC. The public hearing

will be held in the Commissioner’s

Conference Room, room 3313, 1111

Constitution Avenue, NW., Washington, DC.

FOR FURTHER INFORMATION

CONTACT: Concerning the regulations, Vincent G. Surabian, 202622-6232 (not a toll-free number).

Concerning submissions and the public

hearing, Michael Slaughter, 202622-7190 (not a toll-free number).

1996 – 26 I.R.B.

The temporary regulations published

in the Rules and Regulations section of

this issue of the Federal Register

contain amendments to the Regulations

on Employment Taxes and Collection

of Income Tax at Source (26 CFR part

31) and an addition to the Income Tax

Regulations (26 CFR part 1). These

amendments relate to the deposit of

Federal taxes by electronic funds transfer. The text of those temporary regulations also serves as the text of these

proposed regulations. The preamble to

the temporary regulations explains

these proposed regulations.

Special Analyses

It has been determined that this

notice of proposed rulemaking is not a

significant regulatory action as defined

in EO 12866. Therefore, a regulatory

assessment is not required. It also has

been determined that section 553(b) of

the Administrative Procedure Act (5

U.S.C. chapter 5) and the Regulatory

Flexibility Act (5 U.S.C. chapter 6) do

not apply to these rules and, therefore,

a Regulatory Flexibility Analysis is not

required. Pursuant to section 7805(f) of

the Internal Revenue Code, a copy of

this notice of proposed rulemaking will

be submitted to the Chief Counsel for

Advocacy of the Small Business Administration for comment on its impact

on small business.

Comments and Public Hearing

Before these proposed regulations

are adopted as final regulations, consideration will be given to any written

comments (a signed original and eight

(8) copies) that are timely submitted to

the IRS. All comments will be available for public inspection and copying.

A public hearing has been scheduled

for July 16, 1996, beginning at 10 a.m.

in the Commissioner’s Conference

Room, room 3313, Internal Revenue

Building. Because of access restrictions, visitors will not be admitted

beyond the building lobby more than

15 minutes before the hearing starts.

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

apply to the hearing.

Persons who wish to present oral

comments at the hearing must submit

written comments and an outline of the

topics to be discussed and the time to

be devoted to each topic (signed

original and eight (8) copies) by June

19, 1996.

A period of 10 minutes will be

allotted to each person for making

comments.

An agenda showing the scheduling

of the speakers will be prepared after

the deadline for receiving outlines has

passed. Copies of the agenda will be

available free of charge at the hearing.

Drafting Information

The principal author of these regulations is Vincent G. Surabian, Office of

the Assistant Chief Counsel (Income

Tax & Accounting), IRS. However,

other personnel from the IRS and

Treasury Department participated in

their development.

List of Subjects

26 CFR Part 1

Income taxes, Reporting and recordkeeping requirements.

26 CFR Part 31

Employment taxes, Income taxes,

Penalties, Pensions, Railroad retirement, Reporting and recordkeeping requirements, Social security, Unemployment compensation.

Proposed Amendments to the

Regulations

Accordingly, 26 CFR parts 1 and 31

are proposed to be amended as follows:

PART 1—INCOME TAXES

Paragraph 1. The authority citation

for part 1 is amended by adding the

following entry to read as follows:

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

Section 1.6302–4 also issued under

26 U.S.C. 6302(a) and (c). * * *

Par. 2. Section 1.6302–4 is added to

read as follows:

§1.6302–4 Use of financial

institutions in connection with

individual income taxes.

[The text of this proposed section is

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the same as the text of §1.6302–4T

published elsewhere in this issue of the

Federal Register].

PART 31—EMPLOYMENT TAXES

AND COLLECTION OF INCOME

TAX AT SOURCE

Par. 3. The authority citation for part

31 continues to read in part as follows:

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

Par. 4. Proposed §31.6302–1(h), published July 11, 1994, (59 FR 35418) by

cross-referencing temporary regulations

published the same day (59 FR 35414)

is amended as follows:

1. Paragraph (h)(1)(ii)(A) is redesignated as paragraph (h)(1)(ii)(A)(1); the

first sentence in the paragraph is

removed, and three new sentences are

added in its place; and, in the last

sentence of the newly designated paragraph, the text preceding the table is

revised.

2. Paragraph (h)(1)(ii)(A)(2) is

added.

3. Paragraphs (h)(2), (h)(3), (h)(7)

and (h)(8) are revised.

The revised and added provisions

read as follows:

§31.6302–1 Federal tax deposit rules

for withheld income taxes and taxes

under the Federal Insurance

Contributions Act (FICA) attributable

to payments made after December

31, 1992.

[The text of paragraphs (h)(1)(ii)(A)(1), (h)(1)(ii)(A)(2), (h)(2), (h)(3),

(h)(7) and (h)(8) is the same as the text

of those paragraphs in §31.6302–1T

published elsewhere in this issue of the

Federal Register.]

Margaret Milner Richardson,

Commissioner of Internal Revenue.

(Filed by the Office of the Federal Register on

March 20, 1996, 8:45 a.m., and published in

the issue of the Federal Register for March 21,

1996, 61 F.R. 11595)

Employee Plans; Examination

Guidelines

Announcement 96–25

The Internal Revenue Service has

developed proposed examination

guidelines for employee plans examiners to use when examining multi-

employer plans. The guidelines provide

technical background and guidance as

to issues that should be considered

during an examination. The guidelines

are not intended to be all inclusive, and

may be modified based on specific

issues encountered by the examiners

during an examination.

As with earlier examination

guidelines, the Service is seeking public comments with respect to the

proposed examination guidelines pertaining to multiemployer plans before

those guidelines are finalized in the

Internal Revenue Manual.

A copy of the proposed examination

guidelines pertaining to multiemployer

plans may be obtained by submitting a

written request to the Internal Revenue

Service, Attention: Assistant Commissioner (Employee Plans and Exempt

Organizations), CP:E:EP:FC, 1111

Constitution Avenue, N.W., Washington, DC 20224. Written comments

on the guidelines pertaining to multiemployer plans may be submitted on or

before July 22, 1996, to the Internal

Revenue Service, Attention: Assistant

Commissioner (Employee Plans and

Exempt Organizations), CP:E:EP:P:1,

1111 Constitution Avenue, N.W.,

Washington, DC 20224.

Refund Requests under Section

4972(c)(6)

Announcement 96–26

This announcement provides information to assist taxpayers in requesting

refunds of the excise tax under § 4972

of the Internal Revenue Code for

nondeductible contributions that were

retroactively exempted from the § 4972

excise tax by the Retirement Protection

Act of 1994 (RPA ’94).

Section 4972 imposes an excise tax

on employers (other than governmental

and tax exempt employers) equal to 10

percent of the nondeductible contributions made to a qualified employer

plan. Section 4972(c)(6)(B), added by

§ 755 of RPA ’94, provides a limited

exception to this excise tax. Under

§ 4972(c)(6)(B), the § 4972 excise tax

does not apply to contributions to

defined contribution plans that are

nondeductible solely because of the

§ 404(a)(7) combined limit on deductions for contributions. The

§ 4972(c)(6)(B) exception to the

§ 4972 excise tax applies only if the

defined benefit plans of the employer

taken into account under § 404(a)(7)

have more than 100 participants under

§ 404(a)(1)(D), and only to the extent

that nondeductible contributions to defined contribution plans do not exceed

6 percent of compensation paid or

accrued to beneficiaries under the

defined contribution plans.

Section 4972(c)(6)(B) is effective for

taxable years ending on or after December 31, 1992. For some of the

taxable years to which § 4972(c)(6)(B)

applies, the § 4972 excise tax was due

before the enactment of § 4972(c)(6)(B) in RPA ’94. Accordingly,

employers that paid the § 4972 excise

tax for taxable years ending on or after

December 31, 1992, may be entitled to

a refund.

In order to request a refund of the

§ 4972 excise tax on account of

§ 4972(c)(6)(B) for an employer’s taxable year, the employer must submit an

amended Form 5330, Return of Excise

Taxes Related to Employee Benefit

Plans, for that taxable year. The words

‘‘§ 4972(c)(6)(B) Refund Request’’

should be printed clearly and highlighted on the top right corner of the

Form 5330. Under § 301.6402–2(b)(1)

of the Procedure and Administration

Regulations, a claim for refund must

set forth in detail each ground upon

which a refund is claimed and facts

sufficient to apprise the Commissioner

of the exact basis thereof. The Service

has identified the information listed on

the attached sample worksheet (Exhibit

1) as needed to provide sufficient facts

to enable the Service to evaluate

§ 4972(c)(6)(B) claims. This information generally relates to contributions,

limits on deductions and participant

compensation for all relevant qualified

employer plans. The § 4972 excise tax

for the taxable year, calculated consistently with the computations shown in

the sample worksheet, should be entered in line 12j of Form 5330, and the

remainder of the form should be completed consistently with this calculation. Employers must also include

copies of all previously filed Forms

5330 that reflect § 4972 tax liability for

any of the taxable years affected, as

well as any additional information

relevant under the particular

circumstances.

The Service is issuing a field directive to the affected Internal Revenue

Service Centers, to assist those Service

Centers in processing refund requests

under § 4972(c)(6)(B).

1996 – 26 I.R.B.

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Exhibit 1

Worksheet for Computation of Corrected Section 4972 Excise Tax

General Information

Employer’s taxable year ending (month/day/year):

EIN:

List of Plans subject to 404(a)(7)

Name of defined benefit plan(s):

Plan No.

Name of money purchase pension plan(s):

Plan No.

Name of profit-sharing and stock bonus plan(s):

Plan No.

Contributions to defined benefit and money purchase pension plans that are deductible (before giving effect to section

404(a)(7))

Contributions paid for year:

(a) to defined benefit plans listed above

(b) to money purchase plans listed above

Nondeductible carryover from prior years

(carryover under section 404(a)(1)(E))

Deductible limit for year (taking into account section 404(a)(1)(D), but not section

404(a)(7))

Amount deductible before giving effect to section 404(a)(7) (lesser of the sum of

lines (1)(a), (1)(b) and (2), or line (3))

Contributions to profit-sharing and stock bonus plans listed above that are deductible (before giving effect to section

404(a)(7))

Contributions paid for year to profit-sharing and stock bonus plans listed above

Nondeductible carryover from prior years

(carryover under section 404(a)(3)(A)(ii))

Deductible limit for year (before giving effect to section 404(a)(7))

Amount deductible before giving effect to section 404(a)(7) (lesser of the sum of

lines (5) and (6), or line (7))

1996 – 26 I.R.B.

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Determination of Section 404(a)(7) Deductible Limit

Total compensation under section 404(a)(7)(A)(i)

10. 25% of line 9

11. Amount of contributions made to defined benefit plans necessary to satisfy the

minimum funding standard of section 412 (treating the minimum required contribution as not less than the unfunded current liability, for any plan to which section 404(a)(1)(D) applies)

12. Section 404(a)(7) limit (greater of line 10 or line 11)

Determination of deductible contribution amount

13. Deductible contributions without regard to section 404(a)(7) (line 4 plus line 8)

14. Deductible contributions under section 404(a)(7) without section 404(a)(7)(B) carryover (lesser of line 12 or line 13)

15. Contributions carried over from prior years under section 404(a)(7)(B), consisting

of contributions:

(a) Attributable to contributions to defined benefit plans and/or defined contribution plans that were not exempted from section 4972 tax for the taxable year

in which contributed

(b) Attributable to contributions to defined contribution plans that were exempted

from the section 4972 tax for the taxable year in which contributed

Note: Line 15(c) is not necessarily the same as the sum of lines 2 and 6.

16. Deductible section 404(a)(7)(B) carryover (lesser of line 15(c), or line 10 minus

line 14, but not less than zero)

17. Total deductible contribution amount (line 14 plus line 16)

Determination of nondeductible contributions exempt from section 4972 tax

18. Nondeductible contributions for the year exempted from section 4972 tax (least

of: (1) line 13 minus line 14; (2) line 1(b) plus line 5; or (3) 6% of compensation of participants in the employer’s defined contribution plans)

19. Deductible portion of nondeductible carryover contributions exempt from section

4972 tax for the taxable year in which contributed (lesser of (1) line 16 minus

line 15(a), with the result not less than zero, and (2) line 15(b))

20. Net section 404(a)(7) nondeductible carryover contributions exempt from section

4972 tax (line 15(b) minus line 19)

21. Total nondeductible contributions and carryovers exempted from the section 4972

tax for the current year (line 18 plus line 20)

Determination of corrected section 4972 excise tax

22. Contributions subject to section 4972 tax (sum of all contributions made for the

year or carried over from previous years under section 404(a)(1)(E),

404(a)(3)(A)(ii), or 404(a)(7)(B), minus the sum of lines 17 and 21)

23. Section 4972 excise tax (10% times line 22)

1996 – 26 I.R.B.

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Deletion from Cumulative List of

Organizations Contributions to Which

Are Deductible Under Section 170 of

the Code

Announcement 96–27

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 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 April 22, 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.

American Flag Defender, Inc.

Berlin, MD

Nonbank Trustee Net Worth

Requirements; Correction

Announcement 96–28

AGENCY: Internal Revenue Service,

Treasury.

1996 – 26 I.R.B.

ACTION:

regulations.

Correction

final

SUMMARY: This document contains

corrections to final regulations (TD

8635 [1996–3 I.R.B. 5]) which were

published in the Federal Register on

Wednesday, December 20, 1995 (60

FR 65547), and relates to nonbank

trustees with respect to the adequacy of

net worth requirements that must be

satisfied in order to be or remain an

approved nonbank trustee.

EFFECTIVE DATE: December 20,

1995.

FOR FURTHER INFORMATION

CONTACT: Marjorie Hoffman, (202)

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

SUPPLEMENTARY INFORMATION:

Background

The final regulations that are the

subject of these corrections are under

sections 401 and 408 of the Internal

Revenue Code.

Need for Correction

As published, the final regulations

(TD 8635) contain errors that are misleading and in need of clarification.

Correction of Publication

Accordingly, the publication of the

final regulations (TD 8635), which was

the subject of FR Doc. 95–30684, is

corrected as follows:

§ 1.401(f)–1 [Corrected]

1. On page 65549, column 1, amendatory instruction 2. under ‘‘Par. 4.’’,

line 1 is corrected by adding a closed

quotation mark following the number

‘‘401(d)(1)’’.

§ 1.408–2 [Corrected]

2. On page 65549, column 1, amendatory instruction 8. under ‘‘Par. 5.’’,

line 3, the language ‘‘the language

’(n)(3) to (n)(7)’ and’’ is corrected to

read ‘‘the language ’(n)(3) to (7)’

and’’.

3. On page 65549, column 1, amendatory instruction 9. under ‘‘Par. 5.’’,

line 5, the language ‘‘adding ’the

address prescribed by the’ is corrected

to read ’’adding ’address prescribed by

the’; and in the last two lines, the

language ‘‘(e)(6)(9)(iv), and in the first

sentence of newly designated (e)(6)(v)(B).’’ is corrected to read

‘‘(e)(5)(iv), and in the first sentence of

newly designated (e)(7)(v)(B).’’

4. On page 65549, column 2, the

amendatory instruction 17. under ‘‘Par.

5.’’ is corrected to read as follows:

17. Removing the language ‘‘subparagraph, subdivision (n)(3)(v)’’ and

adding ‘‘paragraph (e)(5), and paragraph (e)(2)(v)’’ in its place, and

removing the language ‘‘subparagraph

(n)(8)’’ and adding ‘‘paragraph (e)(7)’’

in its place, in newly designated

paragraph (e)(5)(viii).

5. On page 65549, column 2, amendatory instruction 18. under ‘‘Par. 5.’’,

line 3, the language ’(e)(5)(i)(A)(3)’ in

its place, and‘‘ is corrected to read

’(e)(5)(i)(A)(3)’ in its place, and’’.

6. On page 65549, column 2, amendatory instruction 20. under ‘‘Par. 5.’’

is corrected to read as follows:

20. Adding new paragraph (e)(5)(ii)(A) and (D).

7. On page 65549, column 2,

§ 1.408–2 (e)(5)(ii)(A), second line

from the bottom of the paragraph, the

reference to ‘‘paragraph (e)(6)(ii)(B)

and (C)’’ is corrected to read ‘‘paragraph (e)(5)(ii)(B) and (C)’’.

8. On page 65549, column 3,

§ 1.408–2 (e)(5)(ii)(D), sixth line from

the top of the column, the reference to

‘‘paragraph (e)(5)(ii)(B)(2)’’ is corrected to read ‘‘paragraph (e)(5)(ii)(B)(2)’’.

9. On page 65549, column 3,

§ 1.408–2 (e)(5)(ii)(D), eighth line

from the top of the column, the

reference to ‘‘paragraph (e)(5)(ii)(C)(2)’’ is corrected to read ‘‘paragraph

(e)(5)(ii)(C)(2)’’.

10. On page 65549, column 3,

§ 1.408–2 (e)(5)(ii)(D), (ii) paragraph

corrected to read ‘‘§ 1.408–2 (e)(5)(ii)(B)’’.

11. On page 65550, column 1,

§ 1.408–2 (e)(5)(ii)(D), (ii) paragraph

(d) of the Example, line 2, the reference to ‘‘§ 1.408–2 (e)(6)(ii)(C)’’ is

corrected to read ‘‘§ 1.408–2 (e)(5)(ii)(C)’’.

Michael L. Slaughter,

Acting Chief, Regulations Unit

Assistant Chief Counsel (Corporate).

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(Filed by the Office of the Federal Register on

March 19, 1996, 8:45 a.m., and published in

the issue of the Federal Register for March 20,

1996, 61 F.R. 11307)

the subject of FR Doc. 95–30733, is

corrected as follows:

Backup Withholding, Statement

Mailing Requirements, and Due

Diligence; Correction

1. On page 66111, column 2, in the

Par. 4. amendatory instruction, an

amendatory instruction is added after

2.c. to read ‘‘d. Paragraph (a), fifth

sentence.’’

Announcement 96–30

§ 31.3406(d)–4 [Corrected]

ACTION: Correction to notice of proposed rulemaking.

2. On page 66126, column 1,

§ 31.3406(d)–4 (a)(3), line 18, the

language ‘‘as described in sections

3406(a)(1)(B) or’’ is corrected to read

‘‘as described in section 3406(a)(1)(B)

or’’.

3. On page 66126, column 2,

§ 31.3406(d)–4 (b)(1)(iii), line 4, the

language ‘‘subject to withholding under

sections’’ is corrected to read ‘‘subject

to withholding under section’’.

SUMMARY: This document contains

corrections to the notice of proposed

rulemaking which was published in the

Federal Register for Friday, December

15, 1995 (60 FR 64402). The proposed

regulations relate to the disclosure of

returns and return information in connection with the procurement of property and services for tax administration

purposes.

Announcement 96–29

AGENCY: Internal Revenue Service,

Treasury.

ACTION: Correction to final and temporary regulations.

SUMMARY: This document contains

corrections to final and temporary

regulations (TD 8637 [1996–4 I.R.B.

29]) which were published in the

Federal Register Thursday, December

21, 1995 (60 FR 66105), providing

final and temporary rules on backup

withholding, statement mailing requirements, and due diligence.

EFFECTIVE DATE: December 21,

1995.

FOR FURTHER INFORMATION

CONTACT: Renay France of the Office of Assistant Chief Counsel (Income Tax and Accounting) with respect

to domestic transactions, (202)

622-4910 (not a toll-free call); and

Teresa Burridge Hughes of the Office

of Assistant Chief Counsel (International) with respect to international

transactions, (202) 622-3880 (not a

toll-free number).

SUPPLEMENTARY INFORMATION:

Background

§ 1.6049–6 [Corrected]

§ 31.3406(h)–2 [Corrected]

4. On page 66130, column 3,

§ 31.3406(h)–2 (b)(2)(i), line 5, the

language ‘‘under section 3406 31 percent of the fair’’ is corrected to read

‘‘under section 3406, 31 percent of the

fair’’.

PART 35a—[CORRECTED]

5. On page 66134, columns 1 and 2,

Par. 12 and Par. 13 amendatory instructions are corrected to read as follows:

Par. 12. The authority citation for

part 35a continues to read in part as

follows:

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

Par. 13. Section 35a.3406–2 is

amended by adding paragraph (l) to

read as follows:

The final and temporary regulations

that are the subject of these corrections

are under sections 3406, 6042, 6044,

6049, and 6050N of the Internal

Revenue Code.

§ 35a.3406–2 Imposition of backup

withholding for notified payee

underreporting of reportable interest

or dividend payments.

Need for Correction

(1) Effective date. This section is

effective until December 31, 1996.

As published, the final and temporary regulations (TD 8637) contain

errors which may prove to be misleading and are in need of clarification.

Correction of Publication

Accordingly, the publication of the

final regulations (TD 8637), which was

Michael L. Slaughter,

Acting Chief, Regulations Unit

Assistant Chief Counsel (Corporate).

(Filed by the Office of the Federal Register on

March 19, 1996, 8:45 a.m., and published in

the issue of the Federal Register for March 20,

1996, 61 F.R. 11307)

Disclosure of Returns and Return

Information to Procure Property or

Services for Tax Administration

Purposes; Correction

AGENCY: Internal Revenue Service,

Treasury.

FOR FURTHER INFORMATION

CONTACT: Donald Squires, (202)

622-4570 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

The notice of proposed rulemaking

that is the subject of this correction is

under section 6103 of the Internal

Revenue Code.

Need for Correction

As published, the notice of proposed

rulemaking contains errors that are in

need of clarification.

Correction of Publication

Accordingly, the publication of the

notice of proposed rulemaking which is

the subject of FR Doc. 95–30505, is

corrected as follows:

1. On page 64402, column three, in

the heading, the ‘‘Agency number’’

‘‘[DL–01–95]’’ is corrected to read

‘‘[DL–40–95]’’.

2. On page 64402, column three, in

the preamble following the ‘‘ADDRESSES:’’ caption, lines 2 and 8, the

language ‘‘(DL–01–95)’’ is corrected

to read ‘‘(DL–40–95)’’.

Cynthia E. Grigsby,

Chief, Regulations Unit

Assistant Chief Counsel (Corporate).

1996 – 26 I.R.B.

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(Filed by the Office of the Federal Register on

March 8, 1996, 8:45 a.m., and published in the

issue of the Federal Register for March 11,

1996, 61 F.R. 9660)

Allocation of Accrued Benefits

Between Employer and Employee

Contributions; Correction

Announcement 96–31

AGENCY: Internal Revenue Service,

Treasury.

ACTION: Correction to notice of proposed rulemaking.

SUMMARY: This document contains

corrections to the notice of proposed

rulemaking (EE–35–95 [1996–5 I.R.B.

19]) which was published in the

Federal Register on Friday, December

22, 1995 (60 FR 66532), relating to

proposed regulations that provide guidance on calculation of an employee’s

accrued benefit derived from the

employee’s contributions to a qualified

defined pension plan.

FOR FURTHER INFORMATION

CONTACT: Janet A. Laufer, (202)

622-4606, (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

The notice of proposed rulemaking

that is the subject of this correction

proposes amendments that reflect

changes made to section 411(c)(2) by

the Omnibus Budget Reconciliation Act

of 1987 and the Omnibus Budget

Reconciliation Act of 1989.

Need for Correction

As published, the notice of proposed

rulemaking (EE–35–95) contains errors

which may prove to be misleading and

are in need of clarification.

Correction of Publication

Accordingly, the publication of the

notice of proposed rulemaking (EE–35–

95), which was the subject of FR Doc.

95–31006, is corrected as follows:

through (8) of Example 1., are correctly

designated as paragraphs (A) through

(H) of Example 1.

2. On page 66535, column 1,

§ 1.411(c)–1 (c)(6)(ii), newly designated paragraph (D) of Example 1., line

4, the language ‘‘determined in paragraph (3) of this Example’’ is corrected

to read ‘‘determined in paragraph (C)

of this Example’’.

3. On page 66535, column 1,

§ 1.411(c)–1 (c)(6)(ii), newly designated paragraph (D) of Example 1., the

last line, the language ‘‘$11,913 —

9.196 = $1,295.’’ is corrected to read

‘‘$11,913 4 9.196 = $1,295.’’

4. On page 66535, column 1,

§ 1.411(c)–1 (c)(6)(ii), newly designated paragraph (H) of Example 1.,

second and third lines from the bottom

of the column, the language ‘‘contributions, the sum of paragraphs (4) and (7)

of this Example 1. ($1,295 + $1,654

=’’ is corrected to read ‘‘contributions,

the sum of paragraphs (D) and (G) of

this Example 1. ($1,295 + $1,654 =’’.

5. On page 66535, column 2,

§ 1.411(c)–1 (c)(6)(ii), paragraphs (1)

through (5) of Example 2. are correctly

designated as paragraphs (A) through

(E) of Example 2.

6. On page 66535, column 2,

§ 1.411(c)–1 (c)(6)(ii), newly designated paragraph (B) of Example 2., last

line, the language ‘‘($6,480 from paragraph 2 of Example 1).’’ is corrected to

read ‘‘($6,480 from paragraph (B) of

Example 1).’’

7. On page 66535, column 2,

§ 1.411(c)–1 (c)(6)(ii), newly designated paragraph (C) of Example 2., last

line, the language ‘‘from paragraph 3

of Example 1).’’ is corrected to read

‘‘from paragraph (C) of Example 1).’’

8. On page 66535, column 2,

§ 1.411(c)–1 (c)(6)(ii), newly designated paragraph (D) of Example 2., line

4, the language ‘‘determined in paragraph (3) of this Example’’ is corrected

to read ‘‘determined in paragraph (C)

of this Example’’.

9. On page 66535, column 2,

§ 1.411(c)–1 (c)(6)(ii), newly designated paragraph (D) of Example 2., last

line, the language ‘‘($1,295 from paragraph 4 of Example 1)’’ is corrected to

read ‘‘($1,295 from paragraph (D) of

Example 1)’’.

§ 1.411(c)–1 [Corrected]

1. On page 66535, column 1,

§ 1.411(c)–1 (c)(6)(ii), paragraphs (1)

1996 – 26 I.R.B.

Cynthia E. Grigsby,

Chief, Regulations Unit

Assistant Chief Counsel (Corporate).

(Filed by the Office of the Federal Register on

March 13, 1996, 8:45 a.m., and published in

the issue of the Federal Register for March 14,

1996, 61 F.R. 10489)

Reissuance of Mortgage Credit

Certificates; Hearing

Announcement 96–32

AGENCY: Internal Revenue Service

(IRS), Treasury.

ACTION: Notice of public hearing on

proposed rulemaking.

SUMMARY: This document provides

notice of a public hearing on proposed

regulations relating to implementing a

provision of the Tax Reform Act of

1984 permitting the reissuance of mortgage credit certificates.

DATES: The public hearing will be

held on Wednesday, May 22, 1996,

beginning at 10:00 a.m. Requests to

speak and outlines of oral comments

must be received by Wednesday, May

1, 1996.

ADDRESSES: The public hearing will

be held in the Internal Revenue Service

Commissioner’s Conference Room,

Room 3313, Internal Revenue Building,

1111 Constitution Avenue, N.W.,

Washington, D.C. 20044. Requests to

speak and outlines of oral comments

should be mailed to the Internal Revenue Service, P.O. Box 7604, Ben

Franklin

Station,

Attn:

CC:DOM:CORP:R [FI–47–92], Room

5228, Washington, D.C., 20044.

FOR FURTHER INFORMATION

CONTACT: Evangelista Lee of the

Regulations Unit, Assistant Chief

Counsel (Corporate), (202) 622-8452

(not a toll-free number).

SUPPLEMENTARY INFORMATION:

The subject of the public hearing is

proposed amendments to the Income

Tax Regulations under section 25 of

the Internal Revenue Code. The proposed regulations appeared in the Federal Register for Wednesday, December

22, 1993 (58 FR 67745).

The rules of §601.601(a)(3) of the

‘‘Statement of Procedural Rules’’ (26

CFR Part 601) shall apply with respect

to the public hearing. Persons who

have submitted written comments

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778/20051/1JUL96/D13-007

within the time prescribed in the notice

of proposed rulemaking and who also

desire to present oral comments at the

hearing on the proposed regulations

should submit not later than Wednesday, May 1, 1996, an outline of the

oral comments/testimony to be presented at the hearing and the time they

wish to devote to each subject.

Each speaker (or group of speakers

representing a single entity) will be

limited to 10 minutes for an oral

presentation exclusive of the time

consumed by the questions from the

panel for the government and answer

thereto.

Because of controlled access restrictions, attenders cannot be admitted

beyond the lobby of the Internal

Revenue Building until 9:45 a.m.

An agenda showing the scheduling

of the speakers will be made after

outlines are received from the persons

testifying. Copies of the agenda will be

available free of charge at the hearing.

Cynthia E. Grigsby,

Chief, Regulations Unit

Assistant Chief Counsel (Corporate).

(Filed by the Office of the Federal Register on

April 4, 1996, 8:45 a.m., and published in the

issue of the Federal Register for April 5, 1996,

61 F.R. 15204)

1996 – 26 I.R.B.

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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

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 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 attor-

ney, 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

Miller, Gorden A.

Barnes, Charles E.

Mineral Wells, WV

Louisville, KY

February 1, 1996 to April 30, 1996

Indefinite from February 1, 1996

Polizzi, Angelo J.

Pegler, Charles R.

Foster, David M.

Smith, Jerry A.

Penn, Michael J.

Mueller, E. Laird

Zezima, Paul P.

Van Houten, Robert R.

Grosse Point, MI

Islandia, NY

Birmingham, MI

Evansville, IN

Dearborn, MI

Seal Beach, CA

Norwalk, CT

Danbury, CT

CPA

Enrolled

Agent

Attorney

CPA

Attorney

CPA

Under Section 330, Title 31 of the

United States Code, the Secretary of

the Treasury, after due notice and

opportunity for hearing, is authorized

to suspend or disbar from practice

before the Internal Revenue Service

any person who has violated the rules

and regulations governing the recognition of attorneys, certified public accountants, enrolled agents or enrolled

actuaries to practice before the Internal

Revenue Service.

Attorneys, certified public accountants, enrolled agents, and enrolled

actuaries are prohibited in any Internal

Revenue Service matter from directly

Indefinite from February 6, 1996

Indefinite from February 7, 1996

Indefinite from February 9, 1996

February 9, 1996 to November 8, 1996

February 9, 1996 to February 8, 1997

February 12, 1996 to June 11, 1996

April 1, 1996 to May 31, 1996

May 1, 1996 to April 30, 1997

or indirectly employing, accepting assistance from, being employed by or

sharing fees with, any practitioner

disbarred or under suspension from

practice before the Internal Revenue

Service.

To enable attorneys, certified public

accountants, enrolled agents and

enrolled actuaries to identify such

disbarred or suspended practitioners,

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 the date

of disbarment or period of suspension.

This announcement will appear in the

weekly Bulletin for five successive

weeks or as long as it is practicable for

each attorney, certified public accountant, enrolled agent or enrolled actuary

so suspended or disbarred and will be

consolidated and published in the

Cumulative Bulletin.

After due notice and opportunity

for hearing before an administrative

law judge, the following individuals

have been disbarred from further practice before the Internal Revenue

Service:

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Name

Address

Designation

Effective Date

Gimbel, Stephen

Tropsa, Donna C.

Seifert, Frank J.

Hansen, Joe B.

Columbia, SC

Stamford, CT

Birmingham, AL

Lubbock, TX

CPA

Attorney

CPA

January 20, 1996

March 2, 1996

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 actuaries 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

Ginsberg, Melvin R.

Lahey, Charles W.

DePiano, Robert

Kraig, Jerry B.

Brown, David M.

Hanke Jr., Dale L.

Guillory, Patrick R.

Miller, Brian R.

McLeod, Timothy R.

Simone, Robert F.

Bowen, David Lee

Lindley, Clarkson

Univ. Heights, OH

South Bend, IN

Venice, CA

Shaker Hgts, OH

Los Angeles, CA

Duluth, MN

San Francisco, CA

Grove, OK

Saginaw, MI

Philadelphia, PA

Frisco City, AL

Wayazata, MN

Attorney

CPA

Attorney

CPA

Attorney

Indefinite from January 24, 1996

Indefinite from January 29, 1996

Indefinite from February 1, 1996

Indefinite from February 23, 1996

Indefinite from February 26, 1996

Indefinite from February 27, 1996

SEQ 0022 JOB D13-051-002 PAGE-0022 TERMS

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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 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 Procedural 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.

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Numerical Finding List1

Bulletins 1996–1 through 1996–16

Announcements:

96–1, 1996–2 I.R.B. 57

96–2, 1996–2 I.R.B. 57

96–3, 1996–2 I.R.B. 57

96–4, 1996–3 I.R.B. 50

96–5, 1996–4 I.R.B. 99

96–6, 1996–5 I.R.B. 43

96–7, 1996–5 I.R.B. 44

96–8, 1996–7 I.R.B. 56

96–9, 1996–8 I.R.B. 30

96–10, 1996–8 I.R.B. 30

96–11, 1996–9 I.R.B. 11

96–12, 1996–11 I.R.B. 30

96–13, 1996–12 I.R.B. 33

96–14, 1996–12 I.R.B. 35

96–15, 1996–11 I.R.B. 9

96–16, 1996–13 I.R.B. 22

96–17, 1996–13 I.R.B. 22

96–18, 1996–15 I.R.B. 15

96–19, 1996–15 I.R.B. 15

96–20, 1996–15 I.R.B. 15

96–21, 1996–15 I.R.B. 15

96–22, 1996–15 I.R.B. 16

96–23, 1996–16 I.R.B. 30

96–24, 1996–16 I.R.B. 35

Delegations Orders:

232 (Rev. 2), 1996–7 I.R.B. 49

239 (Rev. 1), 1996–7 I.R.B. 49

Notices:

96–2, 1996–2 I.R.B. 15

96–1, 1996–3 I.R.B. 30

96–4, 1996–4 I.R.B. 69

96–5, 1996–6 I.R.B. 22

96–6, 1996–5 I.R.B. 27

96–7, 1996–6 I.R.B. 22

96–8, 1996–6 I.R.B. 23

96–9, 1996–6 I.R.B. 26

96–10, 1996–7 I.R.B. 47

96–11, 1996–8 I.R.B. 19

96–12, 1996–10 I.R.B. 29

96–13, 1996–10 I.R.B. 29

96–14, 1996–12 I.R.B. 11

96–15, 1996–13 I.R.B. 19

96–16, 1996–13 I.R.B. 20

96–17, 1996–13 I.R.B. 20

96–18, 1996–14 I.R.B. 27

96–19, 1996–14 I.R.B. 28

96–20, 1996–14 I.R.B. 30

96–21, 1996–14 I.R.B. 30

96–22, 1996–14 I.R.B. 30

96–23, 1996–16 I.R.B. 23

96–24, 1996–16 I.R.B. 23

Proposed Regulations:

Revenue Rulings—Continued

DL–1–95, 1996–6 I.R.B. 28

EE–20–95, 1996–5 I.R.B. 15

EE–34–95, 1996–3 I.R.B. 49

EE–35–95, 1996–5 I.R.B. 19

EE–53–95, 1996–5 I.R.B. 23

EE–55–95, 1996–12 I.R.B. 12

EE–106–82, 1996–10 I.R.B. 31

EE–142–87, 1996–12 I.R.B. 13

EE–148–81, 1996–11 I.R.B. 29

IA–33–95, 1996–4 I.R.B. 99

IA–41–93, 1996–11 I.R.B. 29

INTL–3–95, 1996–6 I.R.B. 29

INTL–9–95, 1996–5 I.R.B. 25

INTL–54–95, 1996–14 I.R.B. 39

PS–2–95, 1996–7 I.R.B. 50

PS–6–95, 1996–16 I.R.B. 27

96–7, 1996–3 I.R.B. 12

96–8, 1996–4 I.R.B. 62

96–9, 1996–4 I.R.B. 5

96–10, 1996–4 I.R.B. 27

96–11, 1996–4 I.R.B. 28

96–12, 1996–9 I.R.B. 4

96–13, 1996–10 I.R.B. 19

96–14, 1996–6 I.R.B. 20

96–15, 1996–11 I.R.B. 9

96–16, 1996–11 I.R.B. 4

96–17, 1996–13 I.R.B. 5

96–18, 1996–13 I.R.B. 4

96–19, 1996–14 I.R.B. 24

96–20, 1996–15 I.R.B. 5

96–21, 1996–15 I.R.B. 7

96–22, 1996–15 I.R.B. 9

96–23, 1996–15 I.R.B. 11

Revenue Procedures:

96–1, 1996–1 I.R.B. 8

96–2, 1996–1 I.R.B. 60

96–3, 1996–1 I.R.B. 82

96–4, 1996–1 I.R.B. 94

96–5, 1996–1 I.R.B. 129

96–6, 1996–1 I.R.B. 151

96–7, 1996–1 I.R.B. 185

96–8, 1996–1 I.R.B. 187

96–8A, 1996–9 I.R.B. 10

96–9, 1996–2 I.R.B. 15

96–10, 1996–2 I.R.B. 17

96–11, 1996–2 I.R.B. 18

96–12, 1996–3 I.R.B. 30

96–13, 1996–3 I.R.B. 31

96–14, 1996–3 I.R.B. 41

96–15, 1996–3 I.R.B. 41

96–16, 1996–3 I.R.B. 45

96–17, 1996–4 I.R.B. 69

96–18, 1996–4 I.R.B. 73

96–19, 1996–4 I.R.B. 80

96–20, 1996–4 I.R.B. 88

96–21, 1996–4 I.R.B. 96

96–22, 1996–5 I.R.B. 27

96–23, 1996–5 I.R.B. 27

96–24, 1996–5 I.R.B. 28

96–24A, 1996–15 I.R.B. 12

96–25, 1996–8 I.R.B. 19

96–26, 1996–8 I.R.B. 22

96–27, 1996–11 I.R.B. 27

96–28, 1996–14 I.R.B. 31

96–29, 1996–16 I.R.B. 24

Revenue Rulings:

96–1, 1996–1 I.R.B. 7

96–2, 1996–2 I.R.B. 5

96–3, 1996–2 I.R.B. 14

96–6, 1996–2 I.R.B. 8

96–4, 1996–3 I.R.B. 16

96–5, 1996–3 I.R.B. 29

cumulative list of all Revenue Rulings,

Revenue Procedures, Treasury Decisions, etc.,

published in Internal Revenue Bulletins 1995–27

through 1995–52 will be found in Internal

Revenue Bulletin 1996–1, dated January 2, 1996.

Treasury Decisions:

8630, 1996–3 I.R.B. 19

8631, 1996–3 I.R.B. 7

8632, 1996–4 I.R.B. 6

8633, 1996–4 I.R.B. 20

8634, 1996–3 I.R.B. 17

8635, 1996–3 I.R.B. 5

8636, 1996–4 I.R.B. 64

8637, 1996–4 I.R.B. 29

8638, 1996–5 I.R.B. 5

8639, 1996–5 I.R.B. 12

8640, 1996–2 I.R.B. 10

8641, 1996–6 I.R.B. 4

8642, 1996–7 I.R.B. 4

8643, 1996–11 I.R.B. 4

8644, 1996–7 I.R.B. 16

8645, 1996–8 I.R.B. 4

8646, 1996–8 I.R.B. 10

8647, 1996–9 I.R.B. 7

8648, 1996–10 I.R.B. 23

8649, 1996–9 I.R.B. 5

8650, 1996–10 I.R.B. 5

8651, 1996–11 I.R.B. 24

8652, 1996–11 I.R.B. 11

8653, 1996–12 I.R.B. 4

8654, 1996–11 I.R.B. 14

8655, 1996–12 I.R.B. 9

8656, 1996–13 I.R.B. 9

8657, 1996–14 I.R.B. 4

8658, 1996–14 I.R.B. 13

8659, 1996–16 I.R.B. 4

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Revenue Procedures—Continued

92–85

Modified by

96–1, 1996–1 I.R.B. 8

95–7

Superseded by

96–7, 1996–1 I.R.B. 185

93–16

Superseded by

96–11, 1996–2 I.R.B. 18

95–8

Superseded by

96–8, 1996–1 I.R.B. 187

93–46

Superseded in part by

96–17, 1996–4 I.R.B. 69

95–13

Superseded by

96–20, 1996–4 I.R.B. 88

239

Amended by

239 (Rev. 1), 1996–7 I.R.B. 49

Superseded by

96–18, 1996–4 I.R.B. 73

Revenue Procedures:

94–16

Modified by

96–29, 1996–16 I.R.B. 24

95–20

Superseded by

96–24, 1996–5 I.R.B. 28

Finding List of Current Action on

Previously Published Items1

Bulletins 1996–1 through 1996–16

*Denotes entry since last publication

Delegation Orders:

232 (Rev. 1)

Superseded by

232 (Rev. 2), 1996–7 I.R.B. 49

65–17

Modified by

96–14, 1996–3 I.R.B. 41

66–49

Modified by

96–15, 1996–3 I.R.B. 41

88–32

Obsoleted by

96–15, 1996–3 I.R.B. 41

88–33

Obsoleted by

96–15, 1996–3 I.R.B. 41

89–19

Superseded by

96–17, 1996–4 I.R.B. 69

94–18

Superseded in part by

96–17, 1996–4 I.R.B. 69

Superseded by

96–18, 1996–4 I.R.B. 73

94–59

Superseded in part by

96–17, 1996–4 I.R.B. 69

Superseded by

96–18, 1996–4 I.R.B. 73

94–62

Modified by

96–29, 1996–16 I.R.B. 24

89–48

Superseded in part by

96–17, 1996–4 I.R.B. 69

94–77

Superseded by

96–28, 1996–14 I.R.B. 31

91–22

Modified by

96–1, 1996–1 I.R.B. 8

95–1

Superseded by

96–1, 1996–1 I.R.B. 8

91–22

Amplified by

96–13, 1996–3 I.R.B. 31

95–2

Superseded by

96–2, 1996–1 I.R.B. 60

91–23

Superseded by

96–13, 1996–3 I.R.B. 31

95–3

Superseded by

96–3, 1996–1 I.R.B. 82

91–24

Superseded by

96–14, 1996–3 I.R.B. 41

95–4

Superseded by

96–4, 1996–1 I.R.B. 94

91–26

Superseded by

96–13, 1996–3 I.R.B. 31

95–5

Superseded by

96–5, 1996–1 I.R.B. 129

92–20

Modified by

96–1, 1996–1 I.R.B. 8

95–6

Superseded by

96–6, 1996–1 I.R.B. 151

1A cumulative finding list for previously

published items mentioned in Internal Revenue

Bulletins 1995–27 through 1995–52 will be

found in Internal Revenue Bulletin 1996–1, dated

January 2, 1996.

95–50

Superseded by

96–3, 1996–1 I.R.B. 82

96–3

Amplified by

96–12, 1996–3 I.R.B. 30

Revenue Rulings:

66–307

Obsoleted by

96–3, 1996–2 I.R.B. 14

72–437

Modified by

96–13, 1996–3 I.R.B. 31

80–80

Obsoleted by

96–3, 1996–2 I.R.B. 14

82–80

Modified by

96–14, 1996–3 I.R.B. 41

92–19

Supplemented in part

96–2, 1996–2 I.R.B. 5

92–75

Clarified by

96–13, 1996–3 I.R.B. 31

95–10

Supplemented and superseded by

96–4, 1996–3 I.R.B. 16

95–11

Supplemented and superseded by

96–5, 1996–3 I.R.B. 29

96–24

Modified and amplified by

96–24A, 1996–15 I.R.B. 12

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