Bulletin No. 1996–46

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November 12, 1996

HIGHLIGHTS

OF THIS ISSUE

These synopses are intended only as aids to the reader in

identifying the subject matter covered. They may not be relied

upon as authoritative interpretations.

INCOME TAX

P.L. 104–193, page 4.

An Act to provide for reconciliation pursuant to section

201(a)(1) of the concurrent resolution on the budget for

fiscal year 1997.

EXEMPT ORGANIZATIONS

Announcement 96–118, page 12.

A list is given of organizations now classified as private

foundations.

ADMINISTRATIVE

Announcement 96–116, page 12.

Under section 51 of the Code, the Service will allow

Finding Lists begin on page 17.

Announcements of Disbarments and Suspensions begin on page 14.

employers to leave blank the date of birth entry on Form

8850, Work Opportunity Credit Pre-Screening Notice and

Certification Request, for job applicants who are age 25

and older.

Announcement 96–117, page 12.

Corporations electing to apply the temporary regulations

in T.D. 8678 retroactively, which relate to the operation

of sections 382 and 383 of the Code with respect to

consolidated groups, must file such amended returns

before March 26, 1997.

Announcement 96–119, page 13.

Form 1099–MISC has been revised for reporting excess

golden parachute payments.

Mission of the Service

The purpose of the Internal Revenue Service is to

collect the proper amount of tax revenue at the least

cost; serve the public by continually improving the

quality of our products and services; and perform in a

manner warranting the highest degree of public

confidence in our integrity, efficiency and fairness.

Statement of Principles

of Internal Revenue

Tax Administration

The Service also has the responsibility of applying

and administering the law in a reasonable,

practical manner. Issues should only be raised by

examining of ficers when they have merit, never

arbitrarily or for trading purposes. At the same

time, the examining officer should never hesitate

to raise a meritorious issue. It is also important

that care be exercised not to raise an issue or to

ask a court to adopt a position inconsistent with

an established Service position.

The function of the Internal Revenue Service is to

administer the Internal Revenue Code. Tax policy

for raising revenue is determined by Congress.

With this in mind, it is the duty of the Service to

carry out that policy by correctly applying the laws

enacted by Congress; to determine the reasonable

meaning of various Code provisions in light of the

Congressional purpose in enacting them; and to

perform this work in a fair and impartial manner,

with neither a government nor a taxpayer point of view.

Administration should be both reasonable and

vigorous. It should be conducted with as little

delay as possible and with great cour tesy and

considerateness. It should never try to overreach,

and should be reasonable within the bounds of law

and sound administration. It should, however, be

vigorous in requiring compliance with law and it

should be relentless in its attack on unreal tax

devices and fraud.

At the heart of administration is interpretation of the

Code. It is the responsibility of each person in the

Service, charged with the duty of interpreting the

law, to try to find the true meaning of the statutory

provision and not to adopt a strained construction in

the belief that he or she is ‘‘protecting the revenue.’’

The revenue is properly protected only when we ascertain and apply the true meaning of the statute.

Introduction

The Internal Revenue Bulletin is the authoritative instrument of the Commissioner of Internal Revenue for

announcing official rulings and procedures of the Internal Revenue Service and for publishing Treasury Decisions, Executive Orders, Tax Conventions, legislation,

court decisions, and other items of general interest. It is

published weekly and may be obtained from the Superintendent of Documents on a subscription basis. Bulletin

contents of a permanent nature are consolidated semiannually into Cumulative Bulletins, which are sold on a

single-copy basis.

court decisions, rulings, and procedures must be considered, and Service personnel and others concerned are

cautioned against reaching the same conclusions in

other cases unless the facts and circumstances are

substantially the same.

The Bulletin is divided into four parts as follows:

Part I.—1986 Code.

This part includes rulings and decisions based on

provisions of the Internal Revenue Code of 1986.

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

substantive rulings necessary to promote a uniform

application of the tax laws, including all rulings that

supersede, revoke, modify, or amend any of those

previously published in the Bulletin. All published rulings

apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management

are not published; however, statements of internal

practices and procedures that affect the rights and

duties of taxpayers are published.

Part II.—Treaties and Tax Legislation.

This part is divided into two subparts as follows:

Subpart A, Tax Conventions, and Subpart B, Legislation

and Related Committee Reports.

Part III.—Administrative, Procedural, and Miscellaneous.

To the extent practicable, pertinent cross references to

these subjects are contained in the other Parts and

Subparts. Also included in this part are Bank Secrecy

Act Administrative Rulings. Bank Secrecy Act Administrative Rulings are issued by the Department of the

Treasury’s Office of the Assistant Secretary (Enforcement).

Revenue rulings represent the conclusions of the Service on the application of the law to the pivotal facts

stated in the revenue ruling. In those based on positions

taken in rulings to taxpayers or technical advice to

Service field offices, identifying details and information

of a confidential nature are deleted to prevent unwarranted invasions of privacy and to comply with statutory

requirements.

Part IV.—Items of General Interest.

With the exception of the Notice of Proposed Rulemaking and the disbarment and suspension list included in

this part, none of these announcements are consolidated in the Cumulative Bulletins.

Rulings and procedures reported in the Bulletin do not

have the force and effect of Treasury Department

Regulations, but they may be used as precedents.

Unpublished rulings will not be relied on, used, or cited

as precedents by Service personnel in the disposition of

other cases. In applying published rulings and procedures, the effect of subsequent legislation, regulations,

The first Bulletin for each month includes an index for

the matters published during the preceding month.

These monthly indexes are cumulated on a quarterly and

semiannual basis, and are published in the first Bulletin

of the succeeding quarterly and semi-annual period,

respectively.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

For sale by the Superintendent of Documents U.S. Government Printing Office, Washington, D.C. 20402.

Part II. Treaties and Tax Legislation

Subpart B.—Legislation and

Related Committee Reports

Public Law 104–193

104th Congress, H.R. 37341

August 22, 1996

An Act to provide for reconciliation

pursuant to section 201(a)(1) of the

concurrent resolution on the budget for

fiscal year 1997.

Be it enacted by the Senate and

House of Representatives of the United

States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the “Personal Responsibility and Work Opportunity Reconciliation Act of 1996”.

TITLE I—BLOCK GRANTS FOR

TEMPORARY ASSISTANCE FOR

NEEDY FAMILIES

SEC. 110. CONFORMING

AMENDMENTS TO OTHER LAWS.

(l) The Internal Revenue Code of

1986 (26 U.S.C. 1 et seq.) is amended—

(1) in section 51(d)(9) (26

U.S.C. 51(d)(9)), by striking all

that follows “agency as” and inserting “being eligible for financial

assistance under part A of title IV

of the Social Security Act and as

having continually received such

financial assistance during the 90day period which immediately precedes the date on which such individual is hired by the employer.”;

(2) in section 3304(a)(16) (26

U.S.C. 3304(a)(16)), by striking

“eligibility for aid or services,” and

all that follows through “children

approved” and inserting “eligibility

for assistance, or the amount of

such assistance, under a State program funded”;

(3) in section 6103(l)(7)(D)(i)

(26 U.S.C. 6103(l)(7)(D)(i)), by

striking “aid to families with dependent children provided under a

State plan approved” and inserting

“a State program funded”;

This publication of the law is restricted to

excerpts involving tax matters.

(4) in section 6103(l)(10) (26

U.S.C. 6103(l)(10))—

(A) by striking “(c) or (d)”

each place it appears and inserting “(c), (d), or (e)”; and

(B) by adding at the end of

subparagraph (B) the following

new sentence: “Any return information disclosed with respect to

section 6402(e) shall only be

disclosed to officers and employees of the State agency requesting such information.”;

(5) in section 6103(p)(4) (26

U.S.C. 6103(p)(4)), in the matter

preceding subparagraph (A)—

(A) by striking “(5), (10)” and

inserting “(5)”; and

(B) by striking “(9), or (12)”

and inserting “(9), (10), or (12)”;

(6) in section 6334(a)(11)(A) (26

U.S.C. 6334(a)(11)(A)), by striking

“(relating to aid to families with

dependent children)”;

(7) in section 6402 (26 U.S.C.

6402)—

(A) in subsection (a), by striking “(c) and (d)” and inserting

“(c), (d), and (e)”;

(B) by redesignating subsections (e) through (i) as subsections (f) through (j), respectively;

and

“(e) COLLECTION OF OVERPAYMENTS

UNDER TITLE IV–A OF THE SOCIAL SECURITY ACT.—The amount of any overpayment to be refunded to the person

making the overpayment shall be reduced

(after reductions pursuant to subsections

future liability for an internal revenue

tax) in accordance with section 405(e) of

the Social Security Act (concering recovery of overpayments to individuals under

State plans approved under part A of title

IV of such Act).”; and

(8) in section 7523(b)(3)(C) (26

U.S.C. 7523(b)(3)(C)), by striking

“aid to families with dependent

children” and inserting “assistance

under a State program funded under part A of title IV of the Social

Security Act”.

(m) Section 3(b) of the WagnerPeyser Act (29 U.S.C. 49b(b)) is

amended by striking “State plan approved under part A of title IV” and

inserting “State program funded under

part A of title IV”.

TITLE III—CHILD SUPPORT

Subtitle B—Locate and Case Tracking

SEC. 316. EXPANSION OF THE

FEDERAL PARENT LOCATOR SERVICE.

(g) C ONFORMING A MENDMENTS .—

(2) TO FEDERAL UNEMPLOYMENT

TAX ACT.—Section 3304(a)(16) of

the Internal Revenue Code of 1986

is amended—

(A) by striking “Secretary of

Health, Education, and Welfare”

each place such term appears and

inserting “Secretary of Health

and Human Services”;

(B) in subparagraph (B), by

striking “such information” and

all that follows and inserting “information furnished under subparagraph (A) or (B) is used

only for the purposes authorized

under such subparagraph;”;

end of subparagraph (A);

(D) by redesignating subparagraph (B) as subparagraph (C);

and

E) by inserting after subparagraph (A) the following new

subparagraph:

“(B) wage and unemployment

compensation information contained

in the records of such agency shall

be furnished to the Secretary of

Health and Human Services (in accordance with regulations promulgated by such Secretary) as necessary for the purposes of the

National Directory of New Hires

established under section 453(i) of

the Social Security Act, and”.

(4) DISCLOSURE OF CERTAIN INFORMATION TO AGENTS OF CHILD

SUPPORT ENFORCEMENT AGENCIES.—

(A) IN GENERAL.—Paragraph

(6) of section 6103(l) of the

Internal Revenue Code of 1986

(relating to disclosure of return

information to Federal, State, and

local child support enforcement

agencies) is amended by redesignating subparagraph (B) as subparagraph (C) and by inserting

after subparagraph (A) the following new subparagraph:

“(B) DISCLOSURE TO CERTAIN

AGENTS.—The following information disclosed to any child

support enforcement agency under subparagraph (A) with respect to any individual with respect to whom child support

obligations are sought to be established or enforced may be

disclosed by such agency to any

agent of such agency which is

under contract with such agency

to carry out the purposes described in subparagraph (C):

“(i) The address and social

security account number (or

numbers) of such individual.

“(ii) The amount of any reduction under section 6402(c)

(relating to offset of past-due

support against overpayments)

in any overpayment otherwise

payable to such individual.”.

AMEND(B) C ONFORMING

MENTS.—

(i) Paragraph (3) of section

6103(a) of such Code is

amended by striking “(l)(12)”

and inserting “paragraph (6) or

(12) of subsection (l)”.

(ii) Subparagraph (C) of

section 6103(l)(6) of such

Code, as redesignated by subsection (a), is amended to read

as follows:

“(C) RESTRICTION ON DISCLOSURE.—Information may be disclosed under this paragraph only

for purposes of, and to the extent

necessary in, establishing and

collecting child support obligations from, and locating, individuals owing such obligations.”.

(iii) The material following

subparagraph (F) of section

6103(p)(4) of such Code is

amended by striking “subsection (l)(12)(B)” and inserting

“paragraph (6)(A or (12)(B) of

subsection (l)”.

Subtitle G—Enforcement of Support

Orders

SEC. 361. INTERNAL REVENUE

SERVICE COLLECTION OF

ARREARAGES.

(a) COLLECTION OF FEES.—Section

6305(a) of the Internal Revenue Code of

1986 (relating to collection of certain

liability) is amended—

(1) by striking “and” at the end

of paragraph (3);

(2) by striking the period at the

end of paragraph (4) and inserting

“, and”;

(3) by adding at the end the

following new paragraph:

“(5) no additional fee may be

assessed for adjustments to an

amount previously certified pursuant to such section 452(b) with

respect to the same obligor.”; and

(4) by striking “Secretary of

Health, Education, and Welfare”

each place it appears and inserting

“Secretary of Health and Human

Services”.

(b) EFFECTIVE DATE.—The amendments made by this section shall become effective October 1, 1997.

TITLE IV—RESTRICTING

WELFARE AND PUBLIC

BENEFITS FOR ALIENS

Subtitle F—Earned Income Credit

Denied to Unauthorized Employees

SEC. 451. EARNED INCOME CREDIT

DENIED TO INDIVIDUALS NOT

AUTHORIZED TO BE EMPLOYED IN THE

UNITED STATES.

IN GENERAL.—Section 32(c)(1) of the

Internal Revenue Code of 1986 (relating

to individuals eligible to claim the

earned income credit) is amended by

adding at the end the following new

subparagraph:

“(F) IDENTIFICATION NUMBER

REQUIREMENT.—The term ‘eligible individual’ does not include

any individual who does not include on the return of tax for the

taxable year—

“(i) such individual’s taxpayer identification number,

and

“(ii) if the individual is

married (within the meaning

of section 7703), the taxpayer

identification number of such

individual’s spouse.”.

(b) SPECIAL IDENTIFICATION NUMBER.—Section 32 of such Code is

amended by adding at the end the

following new subsection:

“(l) I DENTIFICATION N UMBERS .—

Solely for purposes of subsections

(c)(1)(F) and (c)(3)(D), a taxpayer identification number means a social secu-

rity number issued to an individual by

the Social Security Administration (other

than a social security number issued

pursant to clause (II) (or that portion of

clause (III) that relates to clause (II)) of

section 205(c)(2)(B)(i) of the Social Security Act).”.

such Code (relating to the definition of

mathematical or clerical errors) is

amended by striking “and” at the end of

subparagraph (D), by striking the period

at the end of subparagraph (E) and

inserting a comma, and by inserting

after subparagraph (E) the following

new subparagraphs:

“(F) an omission of a correct

taxpayer identification number

required under section 32 (relating to the earned income credit)

to be included on a return, and

“(G) an entry on a return

claiming the credit under section

32 with respect to net earnings

from self-employment described

in section 32(c)(2)(A) to the extent the tax imposed by section

1401 (relating to self-employment tax) on such net earnings

has not been paid.”.

(d) EFFECTIVE DATE.—The amendments made by this section shall apply

with respect to returns the due date for

which (without regard to extensions) is

more than 30 days after the date of the

enactment of this Act.

TITLE IX—MISCELLANEOUS

SEC. 909. RULES RELATING TO DENIAL

OF EARNED INCOME CREDIT ON BASIS

OF DISQUALIFIED INCOME.

(a) REDUCTION IN DISQUALIFIED INCOME THRESHOLD.—

(1) IN GENERAL.—Paragraph (1)

of section 32(i) of the Internal

Revenue Code of 1986 (relating to

denial of credit for individuals having excessive investment income) is

amended by striking “$2,350” and

inserting “$2,200”.

(2) A DJUSTMENT FOR INFLATION.—Subsection (j) of section 32

of such Code is amended to read as

follows:

“(j) INFLATION ADJUSTMENTS.—

“(1) IN GENERAL.—In the case

of any taxable year beginning after

1996, each of the dolar amounts in

subsections (b)(2) and (i)(1) shall

be increased by an amount equal

to—

“(A) such dollar amount, multiplied by

“(B) the cost-of-living adjustment determined under section

1(f)(3) for the calendar year in

which the taxable year begins,

determined by substituting ‘calendar year 1995’ for ‘calendar

year 1992’ in subparagraph (B)

thereof.

“(2) ROUNDING.—

“(A) I N GENERAL .—If any

dollar amount in subsection

(b)(2), after being increased under paragraph (1), is not a multiple of $10, such dollar amount

shall be rounded to the nearest

multiple of $10.

“(B) D ISQUALIFIED INCOME

THRESHOLD AMOUNT .—If the

dollar amount in subsection

(i)(1), after being increased under

paragraph (1), is not a multiple

of $50, such amount shall be

rounded to the next lowest multiple of $50.”.

AMEND(3) C ONFORMING

MENT.—Paragraph (2) of section

32(b) of such Code is amended to

read as follows:

‘‘(2) AMOUNTS.—The earned income amount and the phase-out

amount shall be determined as follows:

The

earned

In the case of an income phaseout

eligible individual amount amount

with:

is:

1 qualifying child

$6,330 $11,610

2 or more qualify- $8,890 $11,610

ing children

No qualifying chil- $4,220 $ 5,280’’.

dren

(b) DEFINITION OF DISQUALIFIED

INCOME.—Paragraph (2) of section

32(i) of such Code (defining disqualified income) is amended by striking

‘‘and’’ at the end of subparagraph (B),

by striking the period at the end of

subparagraph (C) and inserting a

comma, and by adding at the end the

following new subparagraphs:

‘‘(D) the capital gain net income (as defined in section

1222) of the taxpayer for such

taxable year, and

‘‘(E) the excess (if any) of—

‘‘(i) the aggregate income

from all passive activities for

the taxable year (determined

without regard to any amount

included in earned income under subsection (c)(2) or described in a preceding subparagraph), over

‘‘(ii) the aggregate losses

from all passive activities for

the taxable year (as so determined).

For purposes of subparagraph (E),

the term ‘passive activity’ has the

meaning given such term by section 469.’’.

(1) I N GENERAL .—Except as

provided in paragraph (2), the

amendments made by this section

shall apply to taxable years beginning after December 31, 1995.

(2) A DVANCE PAYMENT INDIVIDUALS.—In the case of any individual who on or before June 26,

1996, has in effect an earned income eligibility certificate for the

individual’s taxable year beginning

in 1996, the amendments made by

this section shall apply to taxable

years beginning after December 31,

1996.

SEC. 910. MODIFICATION OF

ADJUSTED GROSS INCOME

DEFINITION FOR EARNED

INCOME CREDIT.

(a) I N G ENERAL .—Subsections

(a)(2)(B), (c)(1)(C), and (f)(2)(B) of

section 32 of the Internal Revenue

Code of 1986 are each amended by

striking ‘‘adjusted gross income’’ each

place it appears and isnerting ‘‘modified adjusted gross income’’.

(b) MODIFIED ADJUSTED GROSS INCOME DEFINED.—Section 32(c) of

such Code (relating to definitions and

special rules) is amended by adding at

the end the following new paragraph:

‘‘(5) MODIFIED ADJUSTED GROSS

INCOME.—

‘‘(A) IN GENERAL.—The term

‘modified adjusted gross income’

means adjusted gross income de-

termined without regard to the

amounts described in subparagraph (B).

‘‘(B) CERTAIN AMOUNTS DISREGARDED.—An amount is described in this subparagraph if it

is—

‘‘(i) the amount of losses

from sales or exchanges of

capital assets in excess of

gains from such sales or exchanges to the extent such

amount does not exceed the

amount

under

section

1211(b)(1),

‘‘(ii) the net loss from estates and trusts,

‘‘(iii) the excess (if any) of

amounts described in subsection (i)(2)(C)(ii) over the

amounts described in subsection (i)(2)(C)(i) (relating to

nonbusiness rents and royalties), and

‘‘(iv) 50 percent of the net

loss from the carrying on of

trades or businesses, computed

separately with respect to—

‘‘(I) trades or businesses

(other than farming) conducted as sole proprietorships,

‘‘(II) trades or businesses

of farming conducted as

sole proprietorships, and

‘‘(III) other trades or

businesses.

For purposes of clause (iv), there

shall not be taken into account

items which are attributable to a

trade or business which consists of

the performance of services by the

taxpayer as an employee.’’.

(1) IN GENERAL.—Except as provided in paragraph (2), the amendments

made by this section shall apply to

taxable years beginning after December

31, 1995.

(2) ADVANCE PAYMENT INDIVIDUALS.—In the case of any individual who

on or before June 26, 1996, has in effect

an earned income eligibility certificate

for the individual’s taxable year beginning in 1996, the amendments made by

this section shall apply to taxable years

beginning after December 31, 1996.

Approved August 22, 1996.

Conference Report No. 104-7251

2nd Session

[Bracketed numerals indicate official report

page numbers]

PERSONAL RESPONSIBILITY AND

WORK OPPORTUNITY

RECONCILIATION ACT OF 1996

August 1, 1996

Mr. KASICH, from the committee of

conference, submitted the following conference report to accompany H.R. 3734

TITLE 1—BLOCK GRANTS FOR

TEMPORARY ASSISTANCE FOR

NEEDY FAMILIES

[319] 99. CONFORMING

AMENDMENTS TO OTHER LAWS

Present Law

No provision.

House bill

This section makes a series of amendments that conform provisions of the

proposal to the Unemployment Compensation Amendments of 1976, the Omnibus Budget Reconciliation Act of 1987,

the Housing and Urban-Rural Recovery

Act of 1983, the Tax Equity and Fiscal

Responsibility Act of 1982, the Social

Security Amendments of 1967, the

Stewart B. McKinney Homeless Assistance Amendments Act of 1988, the

Higher Education Act of 1965, the Carl

D. Perkins Vocational and Applied Technology Education Act, the Elementary

and Secondary Education Act of 1965,

Public Law 99-88, the Internal Revenue

Code of 1986, the Wagner-Peyser Act,

the Job Training Partnership Act, the

Low-Income Home Energy Assistance

Act of 1981, the Family Support Act of

1988, the Balanced Budget and Emergency Deficit Control Act of 1985, the

Immigration and Nationality Act, the

Head Start Act, and the School-to-Work

Opportunities Act of 1994.

Senate anendment

Same.

Conference agreement

The conference agreement follows the

House bill and the Senate amendment.

TITLE III—CHILD SUPPORT

ENFORCEMENT

This publication of the Conference Report is

restricted to excerpts involving tax matters. Public

Law 104-193, page 4, this Bulletin.

[347] 11. EXPANSION OF THE

FEDERAL PARENT LOCATOR

SERVICE

Present law

The law requires that the Federal

Parent Locator Service (FPLS) be used

to obtain and transmit information about

the location of any absent parent when

that information is to be used for the

purpose of enforcing child support. Federal law also requires departments or

agencies of the United States to be

reimbursed for costs incurred in providing requested information to the FPLS.

Information Comparisons and Other

Disclosures. Upon request, the Secretary

must provide to an ‘‘authorized person’’

(i.e., an employee or attorney of a child

support agency, a court with jurisdiction

over the parties involved, the custodial

parent, the legal guardian, or the child’s

attorney) the most recent address and

place of employment of any nonresident

parent if the information is contained in

the records of the Department of Health

and Human Services or can be obtained

from any other department or agency of

the United States or of any State. The

FPLS also can be used in connection

with the enforcement or determination

of child custody, visitation, and parental

kidnapping. Federal law requires the

Secretary of Labor and the Secretary of

Health and Human Services to enter into

an agreement to give the FPLS prompt

access to wage and unemployment compensation claims information useful in

locating a noncustodial parent or his

employer.

Fees. ‘‘Authorized persons’’ who request information from FPLS must be

charged a fee.

Restriction on Disclosure and Use.

Federal law stipulates that no information shall be disclosed if the disclosure

would contravene the national policy or

security interests of the United States or

the confidentiality of Census data.

Quarterly Wage Reporting. The Secretary of Labor must provide prompt

access by the Secretary of HHS to wage

and unemployment compensation claims

information and data maintained by the

Labor Department or State employment

security agencies.

House bill

The purposes of the Federal Parent

Locator Service are expanded. For the

purposes of establishing parentage, establishing support orders or modifying

them, or enforcing support orders, the

Federal Parent Locator Service will provide information to locate individuals

who owe child support or against whom

an obligation is sought or to whom such

an obligation is owed. Information in the

FPLS includes Social Security number,

address, name and address of employer,

wages and employee benefits (including

information about health care coverage),

and information about assets and debts.

The provision also clarifies the statute so

that parents with orders providing child

custody or visitation rights are given

access to information from the FPLS

unless the State has notified the Secretary that there is reasonable evidence of

domestic violence or child abuse or that

the information could be harmful to the

custodial parent or child.

The Secretary is authorized to set

reasonable rates for reimbursing Federal

and State agencies for the costs of providing information to the FPLS and to

set reimbursement rates that State and

Federal agencies that use information

from the FPLS must pay to the Secretary.

Federal Case Registry of Child Support

Orders. Establishes within the FPLS an

automated registry known as the Federal

Case Registry of Child Support Orders.

The Federal Case Registry contains abstracts of child support orders and other

information specified by the Secretary

(such as names, Social Security numbers

or other uniform identification numbers,

and State case identification numbers) to

identify individuals who owe or are owed

support, or for or against whom support

is sought to be established, and the State

which has the case. States must begin

reporting this information in accord with

regulations issued by the Secretary by

October 1, 1998.

National Directory of New Hires.

This provision establishes within the

FPLS a National Directory of New

Hires containing information supplied

by State Directories of New Hires.

When fully implemented, the Federal

Directory of New Hires will contain

identifying information on virtually every person who is hired in the United

States. In addition, the FPLS will contain quarterly data supplied by the State

Directory of New Hires on wages and

Unemployment Compensation paid. The

Secretary of the Treasury must have

access to information in the Federal

Directory of New Hires for the purpose

of administering section 32 of the Internal Revenue Code and the Earned Income Credit. The information for the

National Directory of New Hires must

be entered within 2 days of receipt, and

requires the Secretary to maintain within

the National Directory of New Hires a

list of multistate employers that choose

to send their report to one State and the

name of the State so elected. The Secretary must establish a National Directory

of New Hires by October 1, 1997.

Information Comparisons and Other

Disclosures. The Secretary must verify

the accuracy of the name, Social Security number, birth date, and employer

identification number of individuals in

the Federal Parent Locator Service with

the Social Security Administration. The

Secretary is required to match data in

the National Directory of New Hires

against the child support order abstracts

in the Federal Case Registry at least

every 2 working days and to report

information obtained from matches to

the State child support agency responsible for the case within 2 days. The

information is to be used for purposes

of locating individuals to establish paternity, and to establish, modify, or enforce

child support orders. The Secretary may

also compare information across all

components of the FPLS to the extent

and with the frequency that the Secretary determines will be effective. The

Secretary will share information from

the FPLS with several potential users

including State agencies administering

the Temporary Assistance for Needy

Families program, the Commissioner of

Social Security (to determine the accuracy of Social Security and Supplemental Security Income), and researchers

under some circumstances.

Fees. The Secretary must reimburse

the Commissioner of Social Security for

costs incurred in performing verification

of Social Security information and

States for submitting information on

New Hires. States or Federal agencies

that use information from FPLS must

pay fees established by the Secretary.

Restriction on Disclosure and Use.

Information from the FPLS cannot be

used for purposes other than those provided in this section, subject to section

6103 of the Internal Revenue Code

(confidentiality and disclosure of returns

and return information).

Information Integrity and Security.

The Secretary must establish and use

safeguards to ensure the accuracy and

completeness of information from the

FPLS and restrict access to confidential

information in the FPLS to authorized

persons and purposes.

Federal Government Reporting. Each

department of the U.S. must submit the

name, Social Security number, and

wages paid the employee on a quarterly

basis to the FPLS. Quarterly wage re-

porting must not be filed for a Federal

or State employee performing intelligence or counter-intelligence functions

if it is determined that filing such a

report could endanger the employee or

compromise an ongoing investigation.

Conforming Amendments. This section

makes several conforming amendments

to Titles III and IV of the Social Security

Act, to the Federal Unemployment Tax

Act, and to the Internal Revenue Code.

Among the more important are that:

State employment security agencies are

required to report quarterly wage information to the Secretary of HHS or suffer

financial penalties and that private agencies working under contract to State

child support agencies can have access to

certain specified information from IRS

records under some circumstances.

Requirement for Cooperation. The

Secretaries of HHS and Labor must

work together to develop cost-effective

and efficient methods of accessing information in the various directories required

by this title; they must also consider the

need to ensure the proper and authorized

use of wage record information.

Senate amendment

Same, except under ‘‘Information

Comparisons and Other Disclosures’’ the

Senate amendment drops the requirement that the Social Security Administration must determine the accuracy of

payments under the Social Security and

SSI programs.

Conference agreement

The conference agreement follows the

House bill and the Senate amendment

with the modification that the agreement

follows the Senate provision dropping

the requirement that the Social Security

Administration determine the accuracy

of Social Security and SSI payments.

[366]

Subtitle G—Enforcement

of Support Orders

31. INTERNAL REVENUE SERVICE

COLLECTION OF ARREARAGES

Present law

If the amount of overdue child support is at least $750, the Internal Revenue Service (IRS) can enforce the child

support obligation through its regular

collection process, which may include

seizure of property, freezing accounts, or

use of other procedures if child support

agencies request assistance according to

prescribed rules (e.g., certifying that the

delinquency is at least $750, etc.)

House bill

The Internal Revenue Code is

amended so that no additional fees can

be assessed for adjustment to previously

certified amounts for the same obligor.

Senate amendment

Same.

Conference agreement

The conference agreement follows the

House bill and the Senate amendment.

TITLE IV—RESTRICTING WELFARE

AND PUBLIC BENEFITS FOR

ALIENS

[392] Subtitle F—Earned Income

Credit Denied to Unauthorized

Employees

17. EARNED INCOME CREDIT DENIED

TO INDIVIDUALS NOT AUTHORIZED TO

BE EMPLOYED IN THE UNITED STATES

[NOTE.—For further description of

this and additional earned income credit

provisions, see Title IX: Miscellaneous,

page 9.]

Present law

Certain eligible low-income workers

are entitled to claim a refundable credit

of up to $3,556 in 1996 on their income

tax return. The amount of the credit an

eligible individual may claim depends

upon whether the individual has one,

more than one, or no qualifying children

and is determined by multiplying the

credit rate by the taxpayer’s earned

income up to an earned income amount.

The maximum amount of the credit is

the product of the credit rate and the

earned income amount. For taxpayers

with earned income (or adjusted gross

income (AGI), if greater) in excess of

the beginning of the phaseout range, the

maximum credit amount is reduced by

the phaseout rate multiplied by the

amount of earned income (or AGI, if

greater) in excess of the beginning of

the phaseout range. For taxpayers with

earned income (or AGI, if greater) in

excess of the end of the phaseout range,

no credit is allowed.

In order to claim the credit, an individual must either have a qualifying

child or meet other requirements. A

qualifying child must meet a relationship test, an age test, an identification

test, and a residence test. In order to

claim the credit without a qualifying

child, an individual must not be a

dependent and must be over age 24 and

under age 65.

To satisfy the identification test, individuals must include on their tax return

the name and age of each qualifying

child. For returns filed with respect to

tax year 1996, individuals must provide

a taxpayer identification number (TIN)

for all qualifying children born on or

before November 30, 1996. For returns

filed with respect to tax year 1997 and

all subsequent years, individuals must

provide TINs for all qualifying children,

regardless of their age. An individual’s

TIN is generally that individual’s social

security number.

The Internal Revenue Service may

summarily assess additional tax due as a

result of a mathematical or clerical error

without sending the taxpayer a notice of

deficiency and giving the taxpayer an

opportunity to petition the Tax Court.

Where the IRS uses the summary assessment procedure for mathematical or

clerical errors, the taxpayer must be

given an explanation of the asserted

error and a period of 60 days to request

that the IRS abate its assessment. The

IRS may not proceed to collect the

amount of the assessment until the taxpayer has agreed to it or has allowed the

60-day period for objecting to expire. If

the taxpayer files a request for abatement of the assessment specified in the

notice, the IRS must abate the assessment. Any reassessment of the abated

amount is subject to the ordinary deficiency procedures. The request for

abatement of the assessment is the only

procedure a taxpayer may use prior to

paying the assessed amount in order to

contest an assessment arising out of a

mathematical or clerical error. Once the

assessment is satisfied, however, the

taxpayer may file a claim for refund if

he or she believes the assessment was

made in error.

House bill

Individuals are not eligible for the

credit if they do not include their taxpayer identification number (and, if married, their spouse’s taxpayer identification number) on their tax return. Solely

for these purposes and for purposes of

the present-law identification test for a

qualifying child, a taxpayer identification number is defined as a social

security number issued to an individual

by the Social Security Administration

other than a number issued under section 205(c)(2)(B)(i)(II) (or that portion

of sec. 205(c)(2)(B)(i)(III) relating to it)

of the Social Security Act (regarding the

issuance of a number to an individual

applying for or receiving Federally

funded benefits).

If an individual fails to provide a

correct taxpayer identification number,

such omission will be treated as a mathematical or clerical error. If an individual

who claims the credit with respect to net

earnings from self-employment fails to

pay the proper amount of selfemployment tax on such net earnings,

the failure will be treated as a mathematical or clerical error for purposes of

the amount of credit allowed.

Senate amendment

Similar to House bill.

Conference agreement

The conference agreement follows the

House bill and the Senate amendment.

Credit rate (percent) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Earned income amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Maximum credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Phaseout begins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Phaseout rate (percent). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Phaseout ends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

For years after 1996, the credit rates

and the phaseout rates will be the same

as in the preceding table. The earned

income amount and the beginning of the

phaseout range are indexed for inflation;

[494] 10. EARNED INCOME CREDIT

PROVISIONS

A. Deny earned income credit to individuals not authorized to be employed in

the United States

[NOTE.—For additional discussion of

this provision, refer to Title IV: Restricting Welfare and Public Benefits for

Aliens, page 8.]

Present law

In general. Certain eligible lowincome workers are entitled to claim a

refundable credit on their income tax

return. The amount of the credit an

eligible individual may claim depends

upon whether the individual has one,

more than one, or no qualifying children

and is determined by multiplying the

credit rate by the individual’s1 earned

income up to an earned income amount.

The maximum amount of the credit is

the product of the credit rate and the

earned income amount. For individuals

with earned income (or adjusted gross

income (AGI), if greater) in excess of

the beginning of the phaseout range, the

maximum credit amount is reduced by

the phaseout rate multiplied by the

amount of earned income (or AGI, if

greater) in excess of the beginning of

the phaseout range. For individuals with

earned income (or AGI, if greater) in

excess of the end of the phaseout range,

no credit is allowed.

The parameters for the credit depend

upon the number of qualifying children

the individual claims. For 1996, the

parameters are given in the following

table:

In the case of a married individual who files a

joint return with his or her spouse, the income for

purposes of these tests is the combined income of

the couple.

Two or

more children

One qualifying child

No qualifying children

40.00

$8,890

$3,556

$11,610

21.06

$28,495

34.00

$6,330

$2,152

$11,610

15.98

$25,078

7.65

$4,220

$323

$5,280

7.65

$9,500

because the end of the phaseout range

depends on those amounts as well as the

phaseout rate and the credit rate, the end

of the phaseout range will also increase

if there is inflation.

TITLE IX—MISCELLANEOUS

In order to claim the credit, an individual must either have a qualifying

child or meet other requirements. A

qualifying child must meet a relationship test, an age test, an identification

test, and a residence test. In order to

claim the credit without a qualifying

child, an individual must be over age 24

and under age 65.

To satisfy the identification test, individuals must include on their tax return

the name and age of each qualifying

child. For returns filed with respect to

tax year 1996, individuals must provide

a taxpayer identification number (TIN)

for all qualifying children born on or

before November 30, 1996. For returns

filed with respect to tax year 1997 and

all subsequent years, individuals must

provide TINs for all qualifying children,

regardless of their age. An individuals

TIN is generally that individual’s social

security number.

An individual with qualifying children

may elect to receive a portion of the

credit on an advance basis by furnishing

an advance payment certificate to his or

her employer. For such an individual,

the employer makes an advance payment of the credit at the time wages are

paid. The amount of advance payment

allowable in a taxable year is limited to

60 percent of the maximum credit available to an individual with one qualifying

child.

Mathematical or clerical errors. The

Internal Revenue Service may summarily assess additional tax due as a

result of a mathematical or clerical error

without sending the taxpayer a notice of

deficiency and giving the taxpayer an

opportunity to petition the Tax Court.

Where the IRS uses the summary assessment procedure for mathematical or

clerical errors, the taxpayer must be

given an explanation of the asserted

error and a period of 60 days to request

that the IRS abate its assessment. The

IRS may not proceed to collect the

amount of the assessment until the taxpayer has agreed to it or has allowed the

60-day period for objecting to expire. If

the taxpayer files a request for abatement of the assessment specified in the

notice, the IRS must abate the assessment. Any reassessment of the abated

amount is subject to the ordinary deficiency procedures. The request for

abatement of the assessment is the only

procedure a taxpayer may use prior to

paying the assessed amount in order to

contest an assessment arising out of a

mathematical or clerical error. Once the

assessment is satisfied, however, the

taxpayer may file a claim for refund if

he or she believes the assessment was

made in error.

House bill

Individuals are not eligible for the

credit if they do not include their taxpayer identification number (and, if married, their spouse’s taxpayer identification number) on their tax return. Solely

for these purposes and for purposes of

the present-law identification test for a

qualifying child, a taxpayer identification number is defined as a social

security number issued to an individual

by the Social Security Administration

other than a number issued under section 205(c)(2)(B)(i)(II) (or that portion

of sec. 205(c)(2)(B)(i)(III) relating to it)

of the Social Security Act (regarding the

issuance of a number to an individual

applying for or receiving Federally

funded benefits).

If an individual fails to provide a

correct taxpayer identification number,

such omission will be treated as a

mathematical or clerical error. If an

individual who claims the credit with

respect to net earnings from selfemployment fails to pay the proper

amount of self-employment tax on such

net earnings, the failure will be treated

as a mathematical or clerical error for

purposes of the amount of credit allowed.

Effective date. The provision is effective for taxable years beginning after

December 31, 1995.

Senate amendment

The provision in the Senate amendment is identical to that in the House

bill.

Conference agreement

The conference agreement follows the

House bill and the Senate amendment

with a modification to the effective date.

The conference agreement is effective

with respect to returns the due date for

which (without regard to extensions) is

more than 30 days after the date of

enactment of this Act.

B. Change disqualified income test for

earned income credit

Present law

(1) interest (taxable and taxexempt),

(2) dividends, and

(3) net rent and royalty income (if

greater than zero).

House bill

No provision.

Senate amendment

For purposes of the disqualified income test for the earned income credit,

the following items are added to the

definition of disqualified income: capital

gain net income and net passive income

(if greater than zero) that is not selfemployment income.

The threshold above which an individual is not eligible for the credit is

reduced from $2,350 to $2,200, and the

threshold is indexed for inflation after

1996.

Effective date. The provision generally is effective for taxable years beginning after December 31, 1995. For individuals who, as of June 26, 1996, had

made an election to receive the currentyear credit on an advance basis, the

provision is effective for taxable years

beginning after December 31, 1996.

Conference agreement

The conference agreement follows the

Senate amendment.

C. Modify definition of adjusted gross

income used for phasing out the earned

income credit

Present law

For taxpayers with earned income (or

AGI, if greater) in excess of the beginning of the phaseout range, the maximum earned income credit amount is

reduced by the phaseout rate multiplied

by the amount of earned income (or

AGI, if greater) in excess of the beginning of the phaseout range. For taxpayers with earned income (or AGI, if

greater) in excess of the end of the

phaseout range, no credit is allowed.

House bill

No provision.

For taxable years beginning after December 31, 1995, an individual is not

eligible for the earned income credit if

the aggregate amount of ‘‘disqualified

income’’ of the taxpayer for the taxable

year exceeds $2,350. This threshold is

not indexed. Disqualified income is the

sum of:

Senate amendment

The provision modifies the definition

of AGI used for phasing out the earned

income credit by including certain nontaxable income and by disregarding certain losses. The nontaxable items included are:

(1) tax-exempt interest, and

(2) nontaxable distributions from

pensions, annuities, and individual retirement arrangements (but only if not

rolled over into similar vehicles during the applicable rollover period).

The losses disregarded are:

(1) net capital losses (if greater

than zero),

(2) net losses from trusts and estates,

(3) net losses from nonbusiness

rents and royalties, and

(4) net losses from businesses,

computed separately with respect to

sole proprietorships (other than in

farming), sole proprietorships in farming, and other businesses.

For purposes of item (4), above,

amounts attributable to a business that

consists of the performance of services

by the taxpayer as an employee are not

taken into account.

Effective date. The provision generally is effective for taxable years beginning after December 31, 1995. For individuals who, as of June 26, 1996, had

made an election to receive the currentyear credit on an advance basis, the

provision is effective for taxable years

beginning after December 31, 1996.

Conference agreement

The conference agreement modifies

the definition of AGI used for phasing

out the earned income credit by disregarding certain losses. The losses disregarded are:

(1) net capital losses (if greater

than zero),

(2) net losses from trusts and estates,

(3) net losses from nonbusiness

rents and royalties, and

(4) 50 percent of the net losses

from businesses, computed separately

with respect to sole proprietorships

(other than in farming), sole

proprietorships in farming, and other

businesses.

For purposes of item (4), above,

amounts attributable to a business that

consists of the performance of services

by the taxpayer as an employee are not

taken into account.

Effective date. Same as the Senate

amendment provision.

D. Suspend inflation adjustments for

earned income credit for individuals

with no qualifying children

Present law

To claim the earned income credit, an

individual must either have a qualifying

child or meet other requirements. In

order to claim a credit without a qualifying child, an individual must not be a

dependent and must be over age 24 and

under age 65.

The earned income amount and the

beginning of the phaseout range are

indexed for inflation; because the end of

the phaseout range depends on these

amounts as well as the phaseout rate

and the credit rate, the end of the

phaseout range will also increase if

there is inflation.

House bill

No provision.

Senate amendment

In the case of individuals with no

qualifying children there will be no

adjustment for inflation after 1996 to the

earned income amount or the beginning

of the phaseout range.

Effective date. The provision is effective for taxable years beginning after

December 31, 1996.

Conference agreement

The conference agreement follows the

House bill (no provision).

Part IV. Items of General Interest

Work Opportunity Tax Credit —

Supplementary Instructions for

Form 8850

further information regarding this announcement, contact Mr. Wheeler on

(202) 622–6060 (not a toll-free call).

Announcement 96–116

This announcement provides supplementary instructions for employers pertaining to the date-of-birth entry space

on the applicant information portion of

Form 8850, Work Opportunity Credit

Pre-Screening Notice and Certification

Request.

BACKGROUND

On September 26, 1996, the IRS

issued Form 8850 for use by employers

who wish to obtain the Work Opportunity Tax Credit (WOTC) by hiring individuals who belong to one of seven

targeted groups defined in section

51(d)(11) of the Internal Revenue Code.

At the top of the Form 8850, there is

an entry for the job applicant’s date of

birth. This information is requested on

the form because of specific age requirements for membership in the following three targeted groups: high-risk

youths (ages 18–24), qualified summer

youth employees (ages 16–17), and

qualified food stamp recipients (ages

18–24).

Some employers have expressed an

interest in limiting the extent to which

age information is collected in the prescreening process to those age brackets

that are determinative of eligibility in a

WOTC targeted group. To accommodate

this concern, the IRS expects to publish

a revised Form 8850.

In a notice published in the Federal

requested comments on Form 8850 as

required by the Paperwork Reduction

Act of 1995. Those comments are due

December 2, 1996. The IRS expects to

publish a revised version of Form 8850

in early 1997. Meanwhile, the following

supplementary instructions apply to the

September 1996 version of the form.

SUPPLEMENTARY INSTRUCTIONS

In the case of applicants who are age

25 or older, employers are not required

to ask for the applicant’s date of birth

and may leave the date-of-birth entry

space blank on Form 8850.

The principal author of this announcement is Robert Wheeler of the Office of

the Associate Chief Counsel (Employee

Benefits and Exempt Organizations). For

1996–46

I.R.B.

Amended Returns Under T.D. 8678

Announcement 96–117

The date in Temp. Treas. Reg.

§ 1.1502–99T(d)(4), as reprinted in the

Internal Revenue Bulletin, 1996–31

I.R.B. at 28, dated July 29, 1996, should

be March 26, 1997, rather than September 24, 1996. Accordingly, to the extent

that T.D. 8678 requires amended returns

to be filed, such returns are required to

be filed before March 26, 1997. The

temporary regulations relate to the operation of I.R.C. §§ 382 and 383 with

respect to consolidated groups. See

§ 1.1502–99T(d)(4), as published in the

Federal Register on June 27, 1996, 61

F.R. 33,365.

Foundations Status of Certain

Organizations

Announcement 96–118

The following organizations have

failed to establish or have been unable

to maintain their status as public charities or as operating foundations. Accordingly, grantors and contributors may not,

after this date, rely on previous rulings

or designations in the Cumulative List

of Organizations (Publication 78), or on

the presumption arising from the filing

of notices under section 508(b) of the

Code. This listing does not indicate that

the organizations have lost their status

as organizations described in section

501(c)(3), eligible to receive deductible

contributions.

Former Public Charities. The following organizations (which have been

treated as organizations that are not

private foundations described in section

509(a) of the Code) are now classified

as private foundations:

Access to Justice, Inc., Bronx, NY

Africa Systems Research Institute USA,

Inc., Beverly Farms, MA

Aid to Romanian Children, Inc., Quincy,

Aim for Success, Inc., Mamaroneck, NY

Alliance Child Care Center, Inc., Bronx,

Alliance for the Mentally Ill of Central

Middlesex Massachusetts, Littleton,

Almae Matris Mid Atlantic Assoc. of

Alumni and Frds. Croatian,

Englewood Cliffs, NJ

American Friends of Genesis Jerusalem,

Inc., New York, NY

American Initiative for Croatia, Inc.,

New York, NY

Aspen Womens Forum Scholarship

Endowment Fund, Aspen, CO

Bornholm Foundation, Inc., Queen

Creek, AZ

Career Vision in Bangladesh &

International, West Newton, MA

Center for At-Risk Educational

Strategies, (CARES) Incorporated,

Houston, TX

Colorado Biomedical Research

Foundation, Denver, CO

Community Foundation of Southern

Indiana, Inc., New Albany, IN

Faith Lutheran Home Foundation Inc.,

Wolf Point, MT

Fellowship Care, Inc., Midland, TX

First Casa, Santa Fe, NM

Fort Hood Museum Commission, Fort

Hood, TX

He & Company Foundation, Scottsdale,

Houston Drum Corps Association, Inc.,

Voyagers Drum & Bugle Corps.,

Pasadena, TX

International Monovision Association,

Denver, CO

Media for International Development,

Inc., New York, NY

National Indian Monument and Institute,

Inc., Tulsa, OK

Network on Adoption Help, Cedar Falls,

Quest for Alternative Resources, Inc.,

Dallas, TX

Reserve Relief Foundation of America,

Houston, TX

Shakes Alive, Actors Repertory Theater

Irving, Irving, TX

Societas Artis Illuminatorum, Wichita,

Tulsa County Sheriffs Association,

Tulsa, OK

United Living Club, Inc., Wilmington,

Utah OAVP Directors Association,

Provo, UT

Watertown Youth Hockey League,

Watertown, MA

Wilson Senior Center Nutrition Site,

Wilson, KS

Womens Right Foundation, Selden, NY

Youth Educational Support Society, Inc.,

Exeter, NH

If an organization listed above submits information that warrants the re-

newal of its classification as a public

charity or as a private operating foundation, the Internal Revenue Service will

issue a ruling or determination letter

with the revised classification as to

foundation status. Grantors and contributors may thereafter rely upon such ruling or determination letter as provided

in section 1.509(a)–7 of the Income Tax

Regulations. It is not the practice of the

Service to announce such revised classification of foundation status in the Internal Revenue Bulletin.

Reporting Excess Golden

Parachute Payments on Form

1099–MISC

Announcement 96–119

laneous Income, which is to be filed in

1998, has been revised. Box 13 was

added for payers to report excess golden

parachute payments. Payers must label

these payments in box 13 as ‘‘EPP’’.

These payments were formerly reported

in box 7. The 1997 Form 1099–MISC

should be available during January

1997.

The 1997 Form 1099–MISC, Miscel-

1996–46

I.R.B.

Announcement of the Disbarment, Suspension, or Consent to Voluntary

Suspension of Attorneys, Certified Public Accountants, Enrolled Agents, and

Enrolled Actuaries From Practice Before the Internal Revenue Service

Under 31 Code of Federal Regulations, Part 10, an attorney, certified public accountant, enrolled agent, or enrolled actuary, in order to avoid the

institution or conclusion of a proceeding

for his disbarment or suspension from

practice before the Internal Revenue Service, may offer his consent to suspension

from such practice. The Director of

Practice, in his discretion, may suspend

an attorney, certified public accountant,

enrolled agent, or enrolled actuary in

accordance with the consent offered.

Attorneys, certified public accountants, enrolled agents, and enrolled actuaries are prohibited in any Internal Rev-

enue Service matter from directly or

indirectly employing, accepting assistance from, being employed by or sharing fees with, any practitioner disbarred

or suspended from practice before the

Internal Revenue Service.

To enable attorneys, certified public

accountants, enrolled agents, and enrolled actuaries to identify practitioners

under consent suspension from practice

before the Internal Revenue Service, the

Director of Practice will announce in the

Internal Revenue Bulletin the names and

addresses of practitioners who have

been suspended from such practice, their

designation as attorney, certified public

accountant, enrolled agent, or enrolled

actuary, and date or period of suspension. This announcement will appear in

the weekly Bulletin at the earliest practicable date after such action and will

continue to appear in the weekly Bulletins for five successive weeks or for as

many weeks as is practicable for each

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

suspended and will be consolidated and

published in the Cumulative Bulletin.

The following individuals have been

placed under consent suspension from

practice before the Internal Revenue

Service:

Name

Address

Designation

Date of Suspension

Lamb, Gordon W.

Anderson, Randall S.

Broderick, William J.

Ruggiero, John M.

Eklund, Mark

Stayner, G. Craig

Allen, Lehman D.

Hardgrove, David L.

Trader, John H.

Schmertz, Carl D.

Bengston, Wessel

Pullman, WA

Arlington Hgts, IL

Farmington Hills, MI

Rutland, VT

Portland, OR

Salt Lake City, UT

Lubbock, TX

Amarillo, TX

Kansas City, MO

Wilmette, IL

Chicago, IL

CPA

Attorney

CPA

Attorney

CPA

September 1, 1996 to January 31, 1997

September 1, 1996 to February 28, 1998

September 1, 1996 to November 30, 1996

September 1, 1996 to October 31, 1996

September 1, 1996 to February 28, 1997

September 15, 1996 to June 14, 1997

September 20, 1996 to September 19, 1998

September 21, 1996 to June 20, 1997

September 30, 1996 to March 29, 1997

October 1, 1996 to March 31, 1999

October 15, 1996 to April 14, 1997

Announcement of the Expedited Suspension of Attorneys, Certified Public

Accountants, Enrolled Agents, and Enrolled Actuaries From Practice Before The

Internal Revenue Service

Under title 31 of the Code of Federal

Regulations, section 10.76, the Director

of Practice is authorized to immediately

suspend from practice before the Internal

Revenue Service any practitioner who,

within five years, from the date the

expedited proceeding is instituted, (1)

has had a license to practice as an

attorney, certified public accountant, or

actuary suspended or revoked for cause;

or (2) has been convicted of any crime

under title 26 of the United States Code

or, of a felony under title 18 of the

United States Code involving dishonesty

or breach of trust.

Attorneys, certified public accountants, enrolled agents, and enrolled actu-

aries are prohibited in any Internal Revenue Service matter from directly or

indirectly employing, accepting assistance from, being employed by, or sharing fees with, any practitioner disbarred

or suspended from practice before the

Internal Revenue Service.

To enable attorneys, certified public

accountants, enrolled agents, and enrolled actuaries to identify practitioners

under expedited suspension from practice before the Internal Revenue Service,

the Director of Practice will announce in

the Internal Revenue Bulletin the names

and addresses of practitioners who have

been suspended from such practice, their

designation as attorney, certified public

accountant, enrolled agent, or enrolled

actuary, and date or period of suspension. This announcement will appear in

the weekly Bulletin at the earliest practicable date after such action and will

continue to appear in the weekly Bulletins for five successive weeks or for as

many weeks as is practicable for each

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

suspended and will be consolidated and

published in the Cumulative Bulletin.

The following individuals have been

placed under suspension from practice

before the Internal Revenue Service by

virtue of the expedited proceeding provisions of the applicable regulations:

Name

Address

Designation

Date of Suspension

Alleva, Donald

Rose, Robert M.

McGrath, Gregory

Finch, Kenneth L. Jr.

Mount Vernon, NY

Dallas, TX

New Smyrna Bch, FL

Pelham, AL

Enrolled Agent

Attorney

CPA

Indefinite from September 5, 1996

Indefinite from September 8, 1996

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.

PHC—Personal Holding Company.

PO—Possession of the U.S.

FC—Foreign Country.

FICA—Federal Insurance Contribution Act.

Pub. L.—Public Law.

REIT—Real Estate Investment Trust.

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.

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.

M—Minor.

U.S.C.—United States Code.

Nonacq.—Nonacquiescence.

X—Corporation.

O—Organization.

Y—Corporation.

P—Parent 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.

PR—Partner.

PRS—Partnership.

PTE—Prohibited Transaction Exemption.

Numerical Finding List1

Bulletins 1996–27 through 1996–45

Announcements:

96–61, 1996–27 I.R.B. 72

96–62, 1996–28 I.R.B. 55

96–63, 1996–29 I.R.B. 18

96–64, 1996–29 I.R.B. 18

96–65, 1996–29 I.R.B. 18

96–66, 1996–29 I.R.B. 19

96–67, 1996–30 I.R.B. 27

96–68, 1996–31 I.R.B. 45

96–69, 1996–32 I.R.B. 38

96–70, 1996–32 I.R.B. 40

96–71, 1996–33 I.R.B. 16

96–72, 1996–33 I.R.B. 16

96–73, 1996–33 I.R.B. 18

96–74, 1996–33 I.R.B. 19

96–75, 1996–34 I.R.B. 29

96–76, 1996–34 I.R.B. 29

96–77, 1996–35 I.R.B. 15

96–78, 1996–35 I.R.B. 15

96–79, 1996–35 I.R.B. 15

96–80, 1996–35 I.R.B. 16

96–81, 1996–36 I.R.B. 13

96–82, 1996–36 I.R.B. 14

96–83, 1996–36 I.R.B. 14

96–84, 1996–36 I.R.B. 14

96–85, 1996–37 I.R.B. 20

96–86, 1996–37 I.R.B. 21

96–87, 1996–37 I.R.B. 21

96–88, 1996–38 I.R.B. 150

96–89, 1996–37 I.R.B. 22

96–90, 1996–37 I.R.B. 22

96–91, 1996–37 I.R.B. 23

96–92, 1996–38 I.R.B. 151

96–93, 1996–38 I.R.B. 151

96–94, 1996–38 I.R.B. 153

96–96, 1996–39 I.R.B. 41

96–97, 1996–39 I.R.B. 41

96–98, 1996–39 I.R.B. 42

96–99, 1996–39 I.R.B. 42

96–100, 1996–40 I.R.B. 10

96–101, 1996–40 I.R.B. 10

96–102, 1996–40 I.R.B. 11

96–103, 1996–40 I.R.B. 12

96–104, 1996–41 I.R.B. 10

96–105, 1996–42 I.R.B. 19

96–106, 1996–42 I.R.B. 23

96–107, 1996–42 I.R.B. 27

96–108, 1996–44 I.R.B. 15

96–109, 1996–43 I.R.B. 76

96–110, 1996–43 I.R.B. 77

96–111, 1996–44 I.R.B. 16

96–112, 1996–45 I.R.B. 7

96–113, 1996–44 I.R.B. 18

96–114, 1996–45 I.R.B. 7

96–115, 1996–45 I.R.B. 9

Court Decisions:

2058, 1996–34 I.R.B. 13

2059, 1996–34 I.R.B. 10

2060, 1996–34 I.R.B. 5

Delegation Orders:

155 (Rev. 4), 1996–40 I.R.B. 9

Notices:

Revenue Rulings:

96–36, 1996–27 I.R.B. 11

96–37, 1996–31 I.R.B. 29

96–38, 1996–31 I.R.B. 29

96–39, 1996–32 I.R.B. 8

96–40, 1996–33 I.R.B. 11

96–41, 1996–35 I.R.B. 6

96–42, 1996–35 I.R.B. 6

96–43, 1996–36 I.R.B. 7

96–44, 1996–36 I.R.B. 7

96–45, 1996–39 I.R.B. 7

96–46, 1996–39 I.R.B. 7

96–47, 1996–39 I.R.B. 8

96–48, 1996–39 I.R.B. 8

96–49, 1996–41 I.R.B. 6

96–50, 1996–41 I.R.B. 6

96–51, 1996–42 I.R.B. 6

96–52, 1996–42 I.R.B. 8

96–54, 1996–44 I.R.B. 13

96–33, 1996–27 I.R.B. 4

96–34, 1996–28 I.R.B. 4

96–35, 1996–31 I.R.B. 4

96–36, 1996–30 I.R.B. 6

96–37, 1996–32 I.R.B. 4

96–38, 1996–33 I.R.B. 4

96–39, 1996–34 I.R.B. 4

96–41, 1996–45 I.R.B. 4

96–42, 1996–35 I.R.B. 4

96–43, 1996–36 I.R.B. 4

96–44, 1996–38 I.R.B. 4

96–45, 1996–39 I.R.B. 5

96–46, 1996–39 I.R.B. 5

96–47, 1996–40 I.R.B. 7

96–48, 1996–40 I.R.B. 4

96–49, 1996–41 I.R.B. 4

96–50, 1996–42 I.R.B. 4

96–51, 1996–43 I.R.B. 5

96–52, 1996–45 I.R.B. 5

Proposed Regulations:

Tax Conventions:

CO–9–96, 1996–34 I.R.B. 20

CO–24–96, 1996–30 I.R.B. 22

CO–25–96, 1996–31 I.R.B. 30

CO–26–96, 1996–31 I.R.B. 31

FI–59–94, 1996–30 I.R.B. 23

FI–32–95, 1996–34 I.R.B. 21

FI–48–95, 1996–31 I.R.B. 36

FI–28–96, 1996–31, I.R.B. 33

GL–7–96, 1996–33 I.R.B. 13

IA–292–84, 1996–28 I.R.B. 38

IA–26–94, 1996–30 I.R.B. 24

IA–29–96, 1996–33 I.R.B. 14

INTL–4–95, 1996–36 I.R.B. 8

PS–39–93, 1996–34 I.R.B. 27

PS–22–96, 1996–33 I.R.B. 15

REG–208215–91, 1996–38 I.R.B. 145

REG–209803–95, 1996–44 I.R.B. 14

REG–209826–96, 1996–42 I.R.B. 10

REG–209827–96, 1996–37 I.R.B. 19

REG–245562–96, 1996–41 I.R.B. 8

1996–28 I.R.B. 36

1996–36 I.R.B. 6

1996–40 I.R.B. 8

Public Laws:

104–117, 1996–34 I.R.B. 19

104–134, 1996–38 I.R.B. 7

104–168, 1996–38 I.R.B. 8

104–191, 1996–43 I.R.B. 7

Railroad Retirement Quarterly Rate

1996–29 I.R.B. 14

Revenue Procedures:

96–36, 1996–27 I.R.B. 11

96–37, 1996–29 I.R.B. 16

96–39, 1996–33 I.R.B. 11

96–40, 1996–32 I.R.B. 8

96–41, 1996–32 I.R.B. 9

96–42, 1996–32 I.R.B. 14

96–43, 1996–35 I.R.B. 6

96–44, 1996–35 I.R.B. 7

96–45, 1996–35 I.R.B. 12

96–46, 1996–38 I.R.B. 144

96–47, 1996–39 I.R.B. 10

96–48, 1996–39 I.R.B. 10

96–49, 1996–43 I.R.B. 74

A cumulative list of all Revenue Rulings, Revenue Procedures, Treasury Decisions, etc., published in Internal Revenue Bulletins 1996–1

through 1996–26 will be found in Internal Revenue Bulletin 1996–27, dated July 1, 1996.

Treasury Decisions:

8673, 1996–27 I.R.B. 4

8674, 1996–28 I.R.B. 7

8675, 1996–29 I.R.B. 5

8676, 1996–30 I.R.B. 4

8677, 1996–30 I.R.B. 7

8678, 1996–31 I.R.B. 11

8679, 1996–31 I.R.B. 4

8680, 1996–33 I.R.B. 5

8681, 1996–37 I.R.B. 17

8682, 1996–37 I.R.B. 4

8683, 1996–44 I.R.B. 9

8684, 1996–44 I.R.B. 4

Finding List of Current Action on

Previously Published Items1

Bulletins 1996–27 through 1996–45

*Denotes entry since last publication

Revenue Procedures:

80–27

Modified by

96–40, 1996–32 I.R.B. 8

87–32

Modified by

TD 8680, 1996–33 I.R.B. 5

92–20

Modified by

TD 8680, 1996–33 I.R.B. 5

95–16

Superseded by

96–48, 1996–39 I.R.B. 10

95–29

Superseded by

96–36, 1996–27 I.R.B. 11

95–29A

Superseded by

96–36, 1996–27 I.R.B. 11

95–30

Superseded by

96–42, 1996–32 I.R.B. 14

95–46

Superseded by

96–48, 1996–39 I.R.B. 10

96–41

Modified by

Notice 96–49, 1996–41 I.R.B. 6

A cumulative finding list for previously published

items mentioned in Internal Revenue Bulletins

1996–1 through 1996–26 will be found in Internal

Revenue Bulletin 1996–27, dated July 1, 1996.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.