Bulletin No. 2002–37
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Bulletin No. 2002–37
September 16, 2002
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
INCOME TAX
Rev. Rul. 2002–56, page 526.
Fringe benefits aircraft valuation formula. The Standard Industry Fare Level (SIFL) cents-per-mile rates and terminal charges
in effect for the second half of 2002 are set forth for purposes
of determining the value of noncommercial flights on employerprovided aircraft under section 1.61–21(g) of the regulations.
Rev. Rul. 2002–57, page 526.
LIFO; price indexes; department stores. The July 2002 Bureau of Labor Statistics price indexes are accepted for use by
department stores employing the retail inventory and last-in, firstout inventory methods for valuing inventories for tax years ended
on, or with reference to, July 31, 2002.
Rev. Proc. 2002-48, page 531.
This procedure provides guidance to issuers of state or local
bonds for requesting an extension of time to file, or for amending the statement of information required by section 149(e) of
the Code. In general, these statements must be filed on Forms
8038, 8038–G, or 8038–GC. Rev. Proc. 88–10 superseded.
EXEMPT ORGANIZATIONS
Rev. Rul. 2002–54, page 527.
Tax-exempt electric cooperatives. A tax-exempt electric cooperative’s distribution and sale of propane in tanks to members is not a tax-exempt activity under section 501(c)(12)(A) of
the Code and may adversely affect its tax-exempt status under
section 501(c)(12). If the tax-exempt status of the electric cooperative is not adversely affected, income derived from this activity is unrelated business income and subject to unrelated
business income tax. The income is treated as nonmember income for purposes of calculating the 85 percent member income test under section 501(c)(12)(A).
Rev. Rul. 2002–55, page 529.
Cooperative exempt from federal income tax. A cooperative exempt from federal income tax under section 501(c)(12)
of the Code is not required to include income of its subsidiary
for purposes of calculating the 85 percent member income test.
EXCISE TAX
Announcement 2002–82, page 533.
This document extends the time for comments and requests for
a public hearing to December 4, 2002, for REG–103829–99,
2002–27 I.R.B. 59. These proposed regulations relate to the definition of a highway vehicle for purposes of various excise taxes.
ADMINISTRATIVE
Announcement 2002–81, page 533.
This document contains corrections to proposed regulations under section 482 of the Code (REG–106359–02, 2002–34 I.R.B.
405) that provide guidance regarding the application of the rules
governing qualified cost sharing arrangements.
Announcement 2002–84, page 533.
This document contains a notice of public hearing on proposed
regulations (REG–108697–02, 2002–19 I.R.B. 918) relating to
required minimum distributions for defined benefit plans and annuity contracts providing benefits under qualified plans, individual retirement plans, and section 403(b) contracts. A public
hearing is scheduled for October 9, 2002.
Announcements of Disbarments and Suspensions begin on page 534.
Finding Lists begin on page ii.
The IRS Mission
Provide America’s taxpayers top quality service by helping them
understand and meet their tax responsibilities and by applying
the tax law with integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument of the
Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service and for publishing Treasury Decisions, Executive Orders, Tax Conventions,
legislation, court decisions, and other items of general interest. It is published weekly and may be obtained from the Superintendent of Documents on a subscription basis. Bulletin contents
are consolidated semiannually into Cumulative Bulletins, which
are sold on a single-copy basis.
It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application of
the tax laws, including all rulings that supersede, revoke, modify,
or amend any of those previously published in the Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are
not published; however, statements of internal practices and procedures that affect the rights and duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service on the
application of the law to the pivotal facts stated in the revenue
ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices, identifying details and information of a confidential nature are deleted to prevent
unwarranted invasions of privacy and to comply with statutory
requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be relied on, used, or cited as precedents by Service personnel in the
disposition of other cases. In applying published rulings and procedures, the effect of subsequent legislation, regulations, court
decisions, rulings, and 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 Other Related Items, and Subpart B, Legislation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these subjects are contained in the other Parts and Subparts. Also included in this part are Bank Secrecy Act Administrative Rulings.
Bank Secrecy Act Administrative Rulings are issued by the Department of the Treasury’s Office of the Assistant Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.
The first Bulletin for each month includes a cumulative index for
the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the first Bulletin of the succeeding semiannual period, respectively.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402.
September 16, 2002
2002–37 I.R.B.
Part I. Rulings and Decisions Under the Internal Revenue Code of 1986
Section 61.—Gross Income
Defined
Rev. Rul. 2002–56
mula or SIFL) by multiplying the SIFL
cents-per-mile rates applicable for the period during which the flight was taken by
the appropriate aircraft multiple provided
in section 1.61–21(g)(7) and then adding the
applicable terminal charge. The SIFL centsper-mile rates in the formula and the terminal charge are calculated by the
Department of Transportation and are reviewed semi-annually.
The following chart sets forth the terminal charges and SIFL mileage rates:
Fringe benefits aircraft valuation formula. For purposes of section 1.61–21(g)
of the Income Tax Regulations, relating to
the rule for valuing non-commercial flights
on employer-provided aircraft, the Standard Industry Fare Level (SIFL) cents-permile rates and terminal charge in effect for
the second half of 2002 are set forth.
For purposes of the taxation of fringe
benefits under section 61 of the Internal
Revenue Code, section 1.61–21(g) of the
Income Tax Regulations provides a rule for
valuing noncommercial flights on employerprovided aircraft. Section 1.61–21(g)(5) provides an aircraft valuation formula to
determine the value of such flights. The
value of a flight is determined under the
base aircraft valuation formula (also known
as the Standard Industry Fare Level for-
Period During Which
the Flight Is Taken
Terminal
Charge
SIFL Mileage
Rates
7/1/02 – 12/31/02
$38.02
Up to 500 miles
= $.2080 per mile
26 CFR 1.61–21: Taxation of fringe benefits.
501-1500 miles
= $.1586 per mile
Over 1500 miles
= $.1524 per mile
Section 472.—Last-in,
First-out Inventories
The principal author of this revenue rul-
Drafting Information
ing is Kathleen Edmondson of the Office
of Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities). For further information regarding this
revenue ruling, contact Ms. Edmondson at
(202) 622–6040 (not a toll-free call).
26 CFR 1.472–1: Last-in, first-out inventories.
LIFO; price indexes; department
stores. The July 2002 Bureau of Labor Statistics price indexes are accepted for use by
department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years
ended on, or with reference to, July 31,
2002.
Rev. Rul. 2002–57
The following Department Store Inventory Price Indexes for July, 2002 were issued by the Bureau of Labor Statistics. The
2002–37 I.R.B.
526
indexes are accepted by the Internal Revenue Service, under § 1.472–1(k) of the Income Tax Regulations and Rev. Proc. 86–
46, 1986–2 C.B. 739, for appropriate
application to inventories of department
stores employing the retail inventory and
last-in, first-out inventory methods for tax
years ended on, or with reference to July
31, 2002.
The Department Store Inventory Price
Indexes are prepared on a national basis and
include (a) 23 major groups of departments, (b) three special combinations of the
major groups - soft goods, durable goods,
and miscellaneous goods, and (c) a store total, which covers all departments, including some not listed separately, except for
the following: candy, food, liquor, tobacco,
and contract departments.
September 16, 2002
BUREAU OF LABOR STATISTICS, DEPARTMENT STORE
INVENTORY PRICE INDEXES BY DEPARTMENT GROUPS
(January 1941 = 100, unless otherwise noted)
Groups
July
2001
July
2002
Percent Change
from July 2001
to July 2002 1
Piece Goods----------------------------------------------------------------------Domestics and Draperies ------------------------------------------------------Women’s and Children’s Shoes ----------------------------------------------Men’s Shoes ---------------------------------------------------------------------Infants’ Wear---------------------------------------------------------------------Women’s Underwear -----------------------------------------------------------Women’s Hosiery ---------------------------------------------------------------Women’s and Girls’ Accessories ---------------------------------------------Women’s Outerwear and Girls’ Wear ---------------------------------------Men’s Clothing ------------------------------------------------------------------Men’s Furnishings --------------------------------------------------------------Boys’ Clothing and Furnishings ----------------------------------------------Jewelry----------------------------------------------------------------------------Notions----------------------------------------------------------------------------Toilet Articles and Drugs ------------------------------------------------------Furniture and Bedding ---------------------------------------------------------Floor Coverings -----------------------------------------------------------------Housewares ----------------------------------------------------------------------Major Appliances ---------------------------------------------------------------Radio and Television -----------------------------------------------------------Recreation and Education 2 ---------------------------------------------------Home Improvements 2 ---------------------------------------------------------Auto Accessories 2 ---------------------------------------------------------------
495.0
604.1
652.3
865.9
593.7
567.1
352.6
542.1
355.7
577.6
588.4
476.0
946.5
805.8
972.5
637.7
628.7
771.5
225.6
53.9
89.8
125.8
109.4
486.4
577.3
607.4
906.0
590.9
526.3
345.2
517.0
342.0
565.1
573.1
455.1
887.6
795.1
970.8
627.6
617.6
752.9
221.4
48.4
86.3
125.8
111.6
-1.7
-4.4
-6.9
4.6
-0.5
-7.2
-2.1
-4.6
-3.9
-2.2
-2.6
-4.4
-6.2
-1.3
-0.2
-1.6
-1.8
-2.4
-1.9
-10.2
-3.9
0.0
2.0
Groups 1–15: Soft Goods ------------------------------------------------------------Groups 16–20: Durable Goods------------------------------------------------------Groups 21–23: Misc. Goods2 --------------------------------------------------------
575.7
423.3
98.5
555.9
409.9
96.6
-3.4
-3.2
-1.9
Store Total 3-----------------------------------------------------------------------
519.5
502.8
-3.2
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
1
Absence of a minus sign before the percentage change in this column signifies a price increase.
Indexes on a January 1986=100 base.
3
The store total index covers all departments, including some not listed separately, except for the following: candy, food, liquor, tobacco, and contract departments.
2
Section 501.—Exemption
From Tax on Corporations,
The principal author of this revenue ruling is Michael Burkom of the Office of As- Certain Trusts, etc.
DRAFTING INFORMATION
sociate Chief Counsel (Income Tax and
Accounting). For further information regarding this revenue ruling, contact
Mr. Burkom at (202) 622–7718 (not a tollfree call).
September 16, 2002
26 CFR 1.501(c)(12)–1: Local benevolent life insurance associations, mutual irrigation and telephone companies, and like organizations.
527
Tax-exempt electric cooperative. A taxexempt electric cooperative’s (1) distribution and sale of propane in tanks to
members is not a tax-exempt activity under section 501(c)(12)(A) of the Code and
may adversely affect its tax-exempt status under section 501(c)(12); (2) if the taxexempt status of the electric cooperative is
not adversely affected; income derived from
this activity is unrelated business income
and subject to unrelated business income
2002–37 I.R.B.
tax; and (3) the income is treated as nonmember income for purposes of calculating the 85 percent member income test
under section 501(c)(12)(A).
Rev. Rul. 2002–54
ISSUES
1. Whether the distribution and sale of
propane in tanks by an electric cooperative to members is a “like organization” activity under § 501(c)(12)(A) of the Internal
Revenue Code;
2. If the distribution and sale of propane in tanks is not a “like organization”
activity, how the 85 percent member income test of § 501(c)(12)(A) is applied to
income derived from this activity;
3. If the distribution and sale of propane in tanks is not a “like organization”
activity, is it an activity unrelated to the exempt purpose of an electric cooperative and
subject to the unrelated income tax described in §§ 511–513?
FACTS
A is a corporation formed for the purpose of providing electricity to members.
A operates according to cooperative principles. A is recognized as exempt from federal income tax under § 501(a) as an
organization described in § 501(c)(12).
Membership in A is available to any person. A’s members reside in a certain geographic area of State X.
A distributes electricity to members. A
also sells propane to members for their personal or business use. Propane in tanks is
delivered by truck to the purchasers’ residences or businesses at regular intervals and
also on an as needed basis.
In year Y, A’s income is derived as
follows: $95x from sales of electricity to
members, $2x from interest income earned
on A’s bank accounts, and $3x from sales
of tanked propane to members.
LAW
Section 501(c)(12)(A) provides for the
exemption from federal income tax of benevolent life insurance associations of a
purely local character, mutual ditch or irrigation companies, mutual or cooperative telephone companies, or like organizations.
The Internal Revenue Service (“Service”) position has been that providing light
2002–37 I.R.B.
and water to members on a cooperative basis is a “like organization” activity because it is a public utility type service. See
Rev. Rul. 67–265, 1967–2 C.B. 205, updating and restating I.T. 1671, C.B. II–1,
158 (1923). Congress in 1980 amended
§ 501(c)(12) by adding § 501(c)(12)(C),
which specifically lists electric cooperatives as organizations within the purview
of § 501(c)(12). Pub. L. No. 96–605
§ 106(a), 94 Stat. 3524 (1980).
Rev. Rul. 83–170, 1983–2 C.B. 97, affirms the public utility type service rationale described in Rev. Rul. 67–265 and
states that the definition of “like organization” includes those cooperatives that are
engaged in activities similar in nature to a
public utility type service. In the revenue
ruling, an organization provides cable television service to its members on a cooperative basis. The revenue ruling compares
cable television service to a public utility
type service because it is a service regulated by the state. The revenue ruling concludes that the cooperative organization is
a “like organization” within the meaning of
§ 501(c)(12)(A) and qualifies for exemption under § 501(c)(12).
The Service has stated that “like organization” activity does not include activities not similar in nature to a public utility
type service. In Rev. Rul. 65–201, 1965–2
C.B. 170, an organization sells electrical
material, equipment and supplies, and provides equipment repair services to its members on a cooperative basis. The revenue
ruling holds that the organization is not a
“like organization” because the activities in
question are not similar to public utility type
services that are conducted by those organizations listed in § 501(c)(12). See also
Consumers Credit Rural Electric Coop.
Corp. v. Commissioner, 37 T.C. 136, 143,
aff’d 319 F.2d 475 (6th Cir. 1963) (an organization that financed consumer purchases of electrical, water or plumbing
appliances was not a “like organization”);
New Jersey Automobile Club v. United
States, 181 F. Supp. 259 (Cl. Ct. 1960), cert.
denied, 366 U.S. 964 (1961) (providing
emergency road, travel and bail bond services were not “like organization” activities).
Section 501(c)(12)(A) provides that organizations whose activities are described
in this subsection can qualify for exemption only if 85 percent or more of the income consists of amounts collected from
528
members for the sole purpose of meeting
losses and expenses. See also § 1.501
(c)(12)–1(a) of the Income Tax Regulations. The 85 percent member income test
is computed in each taxable year, and a cooperative may fail the test one year but meet
the test in a prior or subsequent tax year.
See Rev. Rul. 65–99, 1965–1 C.B. 242.
Section 511(a)(1) imposes a tax on the
unrelated business taxable income of organizations described in § 511(a)(2).
Section 511(a)(2) states that all organizations exempt under § 501(c) are subject to the unrelated business income tax
(other than § 501(c)(1)).
Section 1.511–2(a)(1)(i) provides, in pertinent part, that § 511(a)(1) applies to any
organization exempt under § 501(a) (other
than § 501(c)(1)).
ANALYSIS
Organizations exempt under § 501(c)(12)
include mutual ditch or irrigation companies and telephone or electric cooperatives. If the organization in question does
not furnish any of these services, its activity must be a “like organization” activity.
As stated in Rev. Rul. 83–170 and Rev. Rul.
67–265, a “like organization” activity is a
public utility type service. A public utility type service is the furnishing or sale of
the production, transmission, and distribution of electricity, gas, steam or water, sewage disposal service, or telephone service,
traditionally where the rates have been established or approved by a State, a political division, public utility commission, or
other similar body of a State, or by any
agency or instrumentality of the United
States. See Rev. Rul. 83–170 (cable television is a public utility type service because it is regulated by the state); see
generally § 168(i)(10). A public utility type
service for purposes of § 501(c)(12) also requires an extensive infrastructure, like the
delivery of electricity from producers to
consumers, the construction of which necessitates large capital investment.
In the factual situation described above,
A’s distribution and sale of tanked propane by trucks is not a public utility type
service because the rates charged for tanked
propane are not and traditionally have not
been regulated (aside from safety regulations) by states or the federal government.
Also, the distribution and sale of tanked
propane by trucks does not require an extensive infrastructure, unlike the distribu-
September 16, 2002
tion of electricity. Hence, distribution and
sale of tanked propane by trucks is not a
“like organization” activity under
§ 501(c)(12)(A).
The 85 percent member income test of
§ 501(c)(12) requires that a § 501(c)(12) cooperative must receive 85 percent or more
of its income from members for the sole
purpose of meeting losses and expenses in
order to qualify for and maintain tax exemption. The 85 percent member income
test requires that the income be (1) derived from members and (2) used to pay for
services listed in § 501(c)(12). The $3x A
derived from distribution and sale of tanked
propane by trucks is from members, but is
not used for a service listed in § 501(c)(12)
because distribution and sale of tanked propane is not a “like organization” activity.
Hence, the $3x A derived is treated as nonmember income for purposes of calculating the 85 percent member income test.
The unrelated business income tax provisions, §§ 511 – 513, provide that the income of a cooperative exempt under
§ 501(c)(12) is subject to unrelated business income tax if the income is derived
from an activity unrelated to its exempt purpose. See also Henry E. & Nancy Horton
Bartels Trust for the Benefit of the University of New Haven v. United States, 209
F.3d 147, 149 (2d Cir. 2000) (stating that
an organization exempt from tax under
§ 501 may be subject to the unrelated business income tax on income it derives from
a trade or business unrelated to its exempt purpose). The distribution and sale of
tanked propane, as concluded, is not a “like
organization” activity within the meaning
of § 501(c)(12)(A). A’s distribution and sale
of tanked propane to members is a business, is regularly carried on and is not related to providing electricity to members.
See § 1.512(a)–1 (stating the definition for
unrelated business taxable income). If A’s
distribution and sale of tanked propane were
not insubstantial, it would jeopardize its exempt status under § 501(c)(12). If it were
insubstantial, the $3x A derived from distribution and sale of tanked propane would
be subject to unrelated business income tax.
HOLDINGS
Distribution and sale of tanked propane by trucks is not a “like organization” activity under § 501(c)(12)(A). The
$3x A derived from the distribution and
sales of tanked propane to members is non-
September 16, 2002
member income for purposes of calculating the 85 percent member income test. A’s
total income for year Y is $100x, $95x (95
percent) of which is derived from members. $5x (5 percent) of the total income for
year Y is derived from nonmembers, $3x
(3 percent) from distribution and sale of
tanked propane and $2x (2 percent) in interest income. A satisfies the 85 percent
member income test for year Y. A’s distribution and sales of tanked propane is unrelated to its exempt purpose. A’s exempt
status under § 501(c)(12) is not jeopardized if the distribution and sale of tanked
propane is insubstantial, but the $3x A derived from the activity is subject to unrelated business income tax.
This revenue ruling deals only with
§ 501(c)(12). No inference is intended as
to any other provision of law, including the
definition of utility or public utility under
any other provision.
EFFECTIVE DATE
This revenue ruling is effective for taxable years beginning after December 31,
2002.
DRAFTING INFORMATION
The principal author of this revenue ruling is Michael Seto, TE/GE Division, Exempt Organizations. For further information
regarding this revenue ruling, contact
Michael Seto at (202) 283–9465 (not a tollfree call).
Cooperative exempt from federal income tax. A cooperative exempt from federal income tax under section 501(c)(12) of
the Code is not required to include income of its subsidiary for purposes of calculating the 85 percent member income test
of section 501(c)(12)(A).
Rev. Rul. 2002–55
ISSUE
How the 85 percent member income test
of § 501(c)(12)(A) of the Internal Revenue Code is applied in the situation described below.
FACTS
A is a corporation formed for the purpose of providing telephone services to
members. A operates according to coop-
529
erative principles. A is recognized as exempt from federal income tax under
§ 501(a) as an organization described in
§ 501(c)(12). Membership in A is available to any person. A’s members reside in
a certain geographic area of State X. B is
a taxable corporation formed for valid business purposes. A owns 100 percent of the
stock of B. B does not operate on a cooperative basis. B is not a member of A. B distributes $5x to A as a dividend (as defined
in § 301) to A. B files Forms 1120.
In the year in question, A’s income is derived as follows: $90x from its members for
telephone services, $5x as a dividend received from B, and $5x from interest income earned on A’s bank accounts.
LAW
Section 501(c)(12)(A) provides for the
exemption from federal income tax of benevolent life insurance associations of a
purely local character, mutual ditch or irrigation companies, mutual or cooperative telephone companies, or like
organizations; but only if 85 percent or
more of the income in any year consists of
amounts collected from members for the
sole purpose of meeting losses and expenses.
A corporation is a separate taxable entity for federal income tax purposes if the
corporation is formed for valid business purposes, and is not a sham, an agency or instrumentality. Moline Properties, Inc. v.
Commissioner, 319 U.S. 436 (1943); Commissioner v. Bollinger, 485 U.S. 340 (1988).
ANALYSIS
An organization seeking exemption under § 501(c)(12) must satisfy two requirements. First, it must be a benevolent life
insurance association of a purely local character, mutual ditch or irrigation company,
mutual or cooperative telephone company
or a like organization. Hence, an organization must conduct activities that are permitted under § 501(c)(12) and must be
operated on a cooperative basis.
Second, the organization must receive 85
percent or more of its income in any year
from members for the sole purpose of meeting losses and expenses incurred from services provided to members. The 85 percent
member income test requires that the income be (1) derived from members and (2)
used to pay for services listed in
2002–37 I.R.B.
§ 501(c)(12). See § 1.501(c)(12)–1(a) of the
Income Tax Regulations and Consumers
Credit Rural Electric Cooperative Corp. v.
Commissioner, 37 T.C. 136 (1961), aff’d in
pertinent part, 319 F.2d 475 (1963).
In order to maintain tax exemption under § 501(c)(12), the cooperative must compute the 85 percent member income test in
each taxable year. The cooperative may fail
the 85 percent member income test one year
but satisfy the test in a prior year or subsequent year. See Rev. Rul. 65–99, 1965–1
C.B. 242. Hence, the 85 percent member
income test requires a cooperative exempt
under § 501(c)(12) for any taxable year to
combine all sources of income not otherwise excludable under § 501(c)(12)(B) or
(C) and calculate whether more than 15 percent of that income is derived from nonmembers. The cooperative is not tax exempt
in any taxable year if more than 15 percent of its income is derived from nonmembers. A cooperative has the burden of
proof to establish that it satisfies the 85 percent member income test for each taxable
year. See also Nonprofits’ Insurance Alliance of California v. United States, 32 Fed.
Cl. 277 (1994) (income tax exemptions are
2002–37 I.R.B.
matters of legislative grace which the courts
have consistently strictly construed).
In the situation described, A must establish that not more than 15 percent of its
income is derived from nonmember sources
for the taxable year in question. Assuming that B is recognized as an entity separate from A for federal income tax purposes
under Moline Properties, the income of B
is not included for purposes of determining whether A satisfies the 85 percent member income test. However, any payments A
received from B are included in the calculation of the 85 percent member income
test. Because B is not a member of A, the
dividend A receives from B for the year in
question is nonmember income for purposes of the 85 percent member income
test. Further, even if B were a member of
A, the dividend is not member income because it is not payment for the sole purpose of meeting losses and expenses
incurred for telephone services provided to
B by A.
A’s total income for the year in question is $100x, $90x (90 percent) of which
is derived from members. $10x (10 percent) of the total income for the year in
530
question is derived from nonmembers, $5x
from B and $5x from A’s interest bearing
bank accounts. A satisfies the 85 percent
member income test for the year in question.
HOLDING
A is exempt from federal income tax under § 501(c)(12) for the taxable year in
question because more than 85 percent of
its income is derived from members.
EFFECTIVE DATE
This revenue ruling is effective for taxable years beginning after December 31,
2002. However, taxpayers may rely on this
revenue ruling for prior periods.
DRAFTING INFORMATION
The principal author of this revenue ruling is Michael Seto, TE/GE Division, Exempt Organizations. For further information
regarding this revenue ruling, contact
Michael Seto at (202) 283–9465 (not a tollfree call).
September 16, 2002
Part III. Administrative, Procedural, and Miscellaneous
26 CFR 1.149(e)1: Extension of time to file information reports.
Rev. Proc. 2002–48
SECTION 1. PURPOSE
This revenue procedure provides guidance to issuers of state or local bonds for
requesting an extension of time to file, or
for amending, the statement of information required by section 149(e) of the Internal Revenue Code. In general, these
statements must be filed on Forms 8038,
8038–G, or 8038–GC.
SECTION 2. BACKGROUND
01. The Tax Reform Act of 1986,
1986–3 (Vol. 1) C.B. 1, 567, amended and
reorganized the sections of the 1954 Code
pertaining to information reporting for certain state or local bonds. Former section
103(l), pertaining to information reporting for private purpose bonds, and former
section 103A(j)(3)(A), pertaining to information reporting for qualified mortgage
bonds, were consolidated in section 149(e)
of the 1986 Code, which requires information reporting for any state or local bond.
02. Section 103(a) of the 1986 Code provides that, with certain exceptions, gross income does not include interest on any state
or local bond.
03. Rev. Proc. 88–10, 1988–1 C.B. 635,
provided guidance to issuers of state or local bonds for requesting an extension of
time to file the statement of information required by section 149(e) of the 1986 Code.
04. Section 149(e)(1) of the 1986 Code
provides that interest on a state or local
bond will not be excludable from gross income unless certain information reporting requirements are satisfied. The issuer
must submit a statement that contains the
information required under section
149(e)(2). The statement must be submitted not later than the 15th day of the 2nd
calendar month after the close of the calendar quarter in which the bond is issued
(or such later time as the Secretary may prescribe with respect to any portion of the
statement).
05. In general, the statement required by
section 149(e)(2) of the 1986 Code must be
filed on one of the following forms: Form
September 16, 2002
8038, Information Return for Tax-Exempt
Private Activity Bond Issues; Form 8038–G,
Information Return for Tax-Exempt Governmental Obligations; or Form 8038–
GC, Information Return for Small TaxExempt Governmental Bond Issues, Leases,
and Installment Sales.
06. Section 1.149(e)–1(d)(2)(ii) of the Income Tax Regulations provides that the
Commissioner may grant an extension of
time to file any form or attachment required under section 149(e) if the Commissioner determines that the failure to file
in a timely manner was not due to willful
neglect. The Commissioner may make this
determination with respect to an issue or a
class of issues.
SECTION 3. PROCEDURES
01. An issuer of a state or local bond
who fails to timely submit the statement
(Form 8038, 8038–G, or 8038–GC) required by section 149(e)(2) should take the
following action as promptly as is reasonably practical after discovery of the failure.
(1) Mail the statement to the Internal
Revenue Service, Ogden Submission
Processing Center, Ogden, UT 84201.
The words, “Request for Relief under
Section 3 of Rev. Proc. 2002–48” should
be typed or printed across the top of the
statement.
(2) Attach to the statement a letter briefly
setting forth the reasons why the statement was not timely submitted to the
Service. The letter must be signed by an
individual who has knowledge of the relevant facts and circumstances. The letter should include all relevant
information, including when the applicable statement (Form 8038, 8038–G, or
8038–GC) was required to be filed, and
a description of the events that led up
to both the failure to timely file and discovery of the failure to timely file. The
letter should also indicate whether the
bond issue in question is under examination by the Service. An issue generally is under examination on the date a
letter opening an examination of the issue is sent.
02. A request for an extension filed in
accordance with section 3.01 shall be
531
deemed accepted if the Service does not notify the issuer regarding the request within
90 days after the Service’s receipt of the request.
03. The Service will notify the issuer in
writing if it is unable to make a determination, based on the issuer’s request for an
extension, that the failure to file the statement was not due to willful neglect. The notification will be made within 90 days of
the Service’s receipt of the issuer’s request and will inform the issuer that the Service has been unable to make the
determination. In the notification, the Service may request additional information
from the issuer.
04. If, after the notification under section 3.03, and based on the information submitted, the Service determines that the
failure to file the statement was not due to
willful neglect, it will so inform the issuer in writing.
05. If, after the notification under section 3.03, and based on the information submitted, it appears that a determination
adverse to the issuer will be made, the issuer will be entitled, upon request, to a conference with the Service. If the issuer
requests a conference, no adverse determination (whether preliminary or otherwise)
will be made prior to the conference. If, after the conference, the Service determines
that the failure to file the statement was not
due to willful neglect, it will so inform the
issuer in writing.
06. If the Service determines that the
failure to timely file the statement is not due
to willful neglect, then the filing of the
statement in section 3.01 above is accepted,
and the information reporting requirement
of section 149(e)(1) is deemed satisfied.
07. If the Service determines that the
failure to timely file the statement is due
to willful neglect, the Service will issue a
preliminary adverse determination in writing to the issuer that the interest on the bond
is not excludable from gross income under section 103(a). In such circumstances,
the procedures set forth in Rev. Proc. 99–
35, 1999–2 C.B. 501 (procedures for administrative appeal of proposed adverse
determination of tax-exempt status of bond
issue), or its successor shall be followed.
2002–37 I.R.B.
SECTION 4. AMENDMENT TO
STATEMENT FILED ON FORM 8038,
8038–G, OR 8038–GC.
If, after timely filing the statement required under section 149(e)(2), an issuer discovers that there is an inaccuracy in the
statement, the issuer may file an amended
statement.
SECTION 5. EFFECT ON OTHER
DOCUMENTS
Rev. Proc. 88–10 is superseded.
SECTION 6. EFFECTIVE DATE
This revenue procedure is effective immediately.
DRAFTING INFORMATION
The principal author of this revenue procedure is Susan D. Ruth of Tax Exempt
Bonds, Outreach Planning and Review, Tax
Exempt/Government Entities (TE/GE). For
further information regarding this revenue
procedure, contact Ms. Ruth at (202) 283–
9792 (not a toll-free call).
2002–37 I.R.B.
532
September 16, 2002
Part IV. Items of General Interest
Compensatory Stock Options
Under Section 482;
Correction
Announcement 2002–81
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Correction to notice of
proposed rulemaking and notice of
public hearing.
SUMMARY: This document contains corrections to a notice of proposed rulemaking and notice of public hearing (REG–
106359–02, 2002–34 I.R.B. 405) published
in the Federal Register on Monday, July
29, 2002 (67 FR 48997) that provides guidance regarding the application of the rules
of section 482 governing qualified cost sharing arrangements.
language “September 30, 2002. A period of
10” is corrected to read “October 30, 2002.
A period of 10”.
Cynthia Grigsby,
Chief, Regulations Unit,
Associate Chief Counsel
(Income Tax and Accounting).
(Filed by the Office of the Federal Register on August 14,
2002, 8:45 a.m., and published in the issue of the Federal Register for August 15, 2002, 67 F.R. 53327)
Excise Taxes; Definition of
Highway Vehicle
Announcement 2002–82
AGENCY: Internal Revenue Service
(IRS), Treasury.
payers may submit electronic comments directly to the IRS Internet site at
www.irs.gov/regs.
SUPPLEMENTARY INFORMATION:
On June 6, 2002, a notice of proposed
rulemaking (REG–103829–99) was published in the Federal Register (67 FR
38913) relating to the definition of highway vehicle requesting submissions of comments and requests for a public hearing on
September 4, 2002. The deadline for submitting comments and requests for a public hearing is extended to December 4,
2002.
Cynthia E. Grigsby,
Chief, Regulations Unit,
Associate Chief Counsel
(Income Tax and Accounting).
(Filed by the Office of the Federal Register on August 15,
2002, 8:45 a.m., and published in the issue of the Federal Register for August 16, 2002, 67 F.R. 53539)
FOR FURTHER INFORMATION
CONTACT: Douglas Giblen, (202)
874–1490 (not a toll-free number).
ACTION: Extension of time for
comments and requests for a public
hearing.
SUPPLEMENTARY INFORMATION:
Required Distributions From
SUMMARY: This document provides no- Retirement Plans; Hearing
Background
The temporary regulations that are the
subject of these corrections are under section 355(e) of the Internal Revenue Code.
Need for Correction
As published, REG–106359–02,
2002–34 I.R.B. 405, contains errors which
may prove to be misleading and are in need
of clarification.
Correction of Publication
Accordingly, the publication of the
(REG–106359–02, 2002–34 I.R.B. 405),
which is the subject of FR Doc. 02–19126
is corrected as follows:
1. On page 49001, column 2, in the preamble under the paragraph heading “Comments and Public Hearing”, first full
paragraph, line 2, the language “for October 21, 2002, at 10 a.m., in” is corrected
to read “for November 20, 2002, at 10 a.m.,
in”.
2. On page 49001, column 2, in the preamble under the paragraph heading “Comments and Public Hearing”, second
paragraph, third line from the bottom, the
September 16, 2002
tice of an extension of time for submitting comments and requests for a public
hearing concerning the notice of proposed
rulemaking (REG–103829–99, 2002–27
I.R.B. 59) relating to the definition of a
highway vehicle. This document extends the
period for the submission of comments and
requests for a public hearing to December 4, 2002.
DATES: Written or electronic comments
and requests for a public hearing must be
received by December 4, 2002.
ADDRESSES: Send submissions to: CC:
ITA:RU (REG–103829–99), room 5226, Internal Revenue Service, POB 7604, Ben
Franklin Station, Washington, DC 20044.
Submissions may be hand delivered Monday through Friday between the hours of
8 a.m. and 5 p.m. to: CC:ITA:RU (REG–
103829–99), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue,
NW, Washington, DC. Alternatively, tax-
533
Announcement 2002–84
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of public hearing on
proposed rulemaking.
SUMMARY: This document contains a notice of public hearing on proposed regulations (REG–108697–02, 2002–19 I.R.B.
918) relating to required minimum distributions for defined benefit plans and annuity contracts providing benefits under
qualified plans, individual retirement plans,
and section 403(b) contracts.
DATES: The public hearing is being held
on Wednesday, October 9, 2002, at 10 a.m.
The IRS must receive outlines of the topics to be discussed at the hearing by
Wednesday, September 25, 2002.
2002–37 I.R.B.
ADDRESSES: The public hearing is being held in room 4718, Internal Revenue
Building, 1111 Constitution Avenue, NW,
Washington, DC. Due to building security procedures, visitors must enter at the
Constitution Avenue entrance. In addition, all visitors must present photo identification to enter the building.
Mail outlines to: Regulations Unit CC:
ITA:RU, (REG–108697–02), room 5226,
Internal Revenue Service, POB 7604, Ben
Franklin Station, Washington, DC 20044.
Hand deliver outlines Monday through Friday between the hours of 8 a.m. and 5 p.m.
to: Regulations Unit CC:ITA:RU, (REG–
108697–02), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue,
NW, Washington, DC. Submit electronic
outlines of oral comments directly to the
IRS Internet site at www.irs.gov/regs.
FOR FURTHER INFORMATION CONTACT: Concerning submissions of comments, the hearing, and/or to be placed on
the building access list to attend the hearing contact Sonya M. Cruse (202) 622–
7805 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
The subject of the public hearing is the
notice of proposed regulations (REG–
108697–02) that was published in the Federal Register on Wednesday, April 17, 2002
(67 FR 18834).
Persons who have submitted written
comments and wish to present oral comments at the hearing, must submit an outline of the topics to be discussed and the
amount of time to be devoted to each topic
(signed original and eight (8) copies) by
Wednesday, September 25, 2002.
A period of 10 minutes is allotted to each
person for presenting oral comments.
After the deadline for receiving outlines has passed, the IRS will prepare an
agenda containing the schedule of speakers. Copies of the agenda will be made
available, free of charge, at the hearing.
Because of access restrictions, the IRS
will not admit visitors beyond the immediate entrance area more than 30 minutes
before the hearing starts. For information
about having your name placed on the
building access list to attend the hearing,
see the “FOR FURTHER INFORMATION
CONTACT” section of this document.
Cynthia E. Grigsby,
Chief, Regulations Unit,
Associate Chief Counsel
(Income Tax and Accounting).
(Filed by the Office of the Federal Register on August 29,
2002, 11:51 a.m., and published in the issue of the Federal
Register for September 4, 2002, 67 F.R. 56509)
Announcement of Disciplinary Actions Involving Attorneys,
Certified Public Accountants, Enrolled Agents, and Enrolled
Actuaries—Suspensions, Disbarments, and Resignations
Under Title 31, Code of Federal Regulations, Part 10, attorneys, certified public accountants, enrolled agents, and enrolled
actuaries may not accept assistance from,
or assist, any person who is under disbarment or suspension from practice before the
Internal Revenue Service if the assistance
relates to a matter constituting practice before the Internal Revenue Service and may
not knowingly aid or abet another person
to practice before the Internal Revenue Service during a period of suspension, disbarment, or ineligibility of such other person.
To enable attorneys, certified public accountants, enrolled agents, and enrolled actuaries to identify persons to whom these
restrictions apply, the Director of Practice
will announce in the Internal Revenue Bul-
letin their names, their city and state, their
professional designation, the effective date
of disciplinary action, and the 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.
Suspensions From Practice Before the Internal Revenue
Service After Notice and an Opportunity for a Proceeding
Under Title 31, Code of Federal Regulations, Part 10, after notice and an opportunity for a proceeding before an
administrative law judge, the following individuals have been placed under suspen-
sion from practice before the Internal
Revenue Service:
Name
McKnight, James A.
Address
Tequesta, FL
Designation
Enrolled Agent
Effective Date
April 12, 2001
to
October 11, 2002
Donnelly, Edward
Melville, NY
CPA
April 17, 2002
to
July 16, 2003
2002–37 I.R.B.
534
September 16, 2002
Disbarments From Practice Before the Internal Revenue
Service After Notice and an Opportunity for a Proceeding
Under Title 31, Code of Federal Regulations, Part 10, after notice and an oppor-
tunity for a proceeding before an
administrative law judge, the following in-
dividuals have been disbarred from practice before the Internal Revenue Service:
Name
Address
Designation
Effective Date
Schmeiser, Larry W.
Limon, CO
Attorney
September 1, 2000
Sayre, Charles L.
Ann Arbor, MI
Attorney
January 2, 2001
Young, Dennis
Lewiston, ID
CPA
January 2, 2001
Buckley, Francis M.
Marlborough, CT
Attorney
January 18, 2001
Dugovich, Frank A.
Middleburg Heights, OH
CPA
January 29, 2001
Kiss, Philip M.
Liberyville, IL
Enrolled Agent
March 1, 2001
Mellner, Michael
Scranton, PA
CPA
June 11, 2001
Davis, Jerry A.
Leonard, TX
CPA
June 13, 2001
Thornton, John L.
Fayetteville, AR
CPA
June 21, 2001
Campbell, David G.
Reading, PA
Attorney
July 10, 2001
Schlabach, John J.
Colbert, WA
CPA
July 16, 2001
Belin, Leon
Southfield, MI
CPA
August 7, 2001
Simpson, James
Elmhurst, IL
Attorney
September 24, 2001
Berg, Richard L.
Vadnais Heights, MN
CPA
October 3, 2001
Riesenmy, David
Joplin, MO
Attorney
October 15, 2001
Andrade, Rodrigo
El Paso, TX
Enrolled Agent
November 20, 2001
Miller, Larry Charles
Philadelphia, PA
Attorney
January 10, 2002
Melton, Andrew I.
Detroit, MI
CPA
February 13, 2002
Daily, J. Michael
Clearwater, FL
CPA
March 29, 2002
Klimkowski, Joseph R.
Florham, NJ
CPA
March 29, 2002
Greene, William M.
Center Sandwich, NH
Attorney
March 29, 2002
Bart, Adrian
Tulsa, OK
CPA
April 17, 2002
Consent Suspensions From Practice Before the Internal
Revenue Service
Under Title 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 or her
disbarment or suspension from practice before the Internal Revenue Service, may of-
September 16, 2002
fer his or her 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.
535
The following individuals have been
placed under consent suspension from practice before the Internal Revenue Service:
2002–37 I.R.B.
Name
McDaniel III, Troy J.
Address
Atlanta, GA
Designation
CPA
Levine, Paul
Los Angeles, CA
CPA
Hammons, Patrick B.
Mesa, AZ
Enrolled Agent
Price, Russell S.
Washington, DC
CPA
Donohue, Robert M.
Ellicott City, MD
CPA
Havranek, Ronald J.
Deerfield, IL
CPA
Harding III, Leon H.
Roanoke, VA
CPA
Noone, Patrick
Orland Park, IL
CPA
Sefton, David L.
Austin, TX
CPA
Zuccarelli, Silvio
Coconut Creek, FL
Enrolled Agent
DeFazio, James P.
Sacramento, CA
CPA
Levenson, Martin J.
New York, NY
CPA
Donchatz, Charles
Columbia, SC
CPA
Smith, Virga A.
Rochester, IN
CPA
Fuller, Don B.
Minneapolis, MN
Attorney
Retzlaff, Gene A.
Hortonville, WI
Enrolled Agent
Kime, Robert L.
Collinsville, IL
CPA
King, John C.
Wichita, KS
Attorney
2002–37 I.R.B.
536
Date of Suspension
Indefinite
from
June 6, 2000
February 1, 2001
to
January 31, 2003
February 1, 2001
to
January 31, 2004
February 17, 2001
to
August 16, 2003
May 15, 2001
to
May 14, 2005
July 30, 2001
to
July 29, 2003
Indefinite
from
August 7, 2001
August 23, 2001
to
February 22, 2004
August 31, 2001
to
February 27, 2003
September 18, 2001
to
December 17, 2004
October 1, 2001
to
March 31, 2003
October 15, 2001
to
April 14, 2004
October 25, 2001
to
October 24, 2004
November 1, 2001
to
October 31, 2003
November 15, 2001
to
November 14, 2004
Indefinite
from
December 27, 2001
December 6, 2001
to
December 5, 2003
January 1, 2002
to
June 30, 2003
September 16, 2002
Name
Carter, Lloyd C.
Address
St. George, UT
Designation
CPA
Dennis, Paul J.
Milwaukee, WI
Enrolled Agent
Jones, Ricky A.
Greenfield, OH
CPA
Price, Richard A.
Novato, CA
CPA
Burnett, Bradley P.
Wheat Ridge, CO
Attorney
Leone, Anthony
Des Plaines, IL
CPA
Groskin, Lawrence J.
Tuxedo Park, NY
Attorney
Homnick, Cory
San Diego, CA
CPA
Herring, Chester L.
University Park, IL
CPA
Cutcher, Edward W.
Clinton, OH
CPA
Gisser, Arthur S.
Glenwood Landing, NY
CPA
Garlikov, Mark B.
Dayton, OH
Attorney
Foust, John Franklin
Des Moines, IA
CPA
Byock, Matthew I.
Red Bank, NJ
CPA
Date of Suspension
January 15, 2002
to
October 14, 2002
January 28, 2002
to
January 27, 2005
March 15, 2002
to
March 14, 2003
May 1, 2002
to
April 30, 2005
May 1, 2002
to
April 30, 2004
April 1, 2002
to
September 30, 2003
May 1, 2002
to
April 30, 2003
June 1, 2002
to
May 31, 2003
June 1, 2002
to
November 30, 2003
June 1, 2002
to
February 28, 2003
July 1, 2002
to
December 31, 2002
July 1, 2002
to
October 30, 2005
July 1, 2002
to
June 30, 2003
August 1, 2002
to
March 31, 2003
Expedited Suspensions From Practice Before the Internal
Revenue Service
Under Title 31, Code of Federal Regulations, Part 10, 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
September 16, 2002
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 certain crimes.
537
The following individuals have been
placed under suspension from practice before the Internal Revenue Service by virtue of the expedited proceeding provisions:
2002–37 I.R.B.
Name
Brenner, William A.
Address
Grahamsville, NY
Designation
Attorney
Pope, Ray P.
Pensacola, FL
Attorney
Dudnick, Howard A.
Princeton, NY
CPA
Griffiths, Brian D.
North Andover, MA
CPA
Yerardi, Michael J.
East Walpole, MA
Attorney
Cheesman, Michael S.
Mill Creek, WA
CPA
Devereaux, Ross
Jackson, MI
CPA
Gaskill, Todd
Lompoc, CA
Attorney
Gross, Peter Sam
Kerrville, TX
Attorney
Hausman, Stanley
Livingston, NJ
Attorney
Jones, Peter C.
Seattle, WA
CPA
Koss, Lewis M.
Calabasas, CA
Attorney
Maxey, Michael
Mishawaka, IN
CPA
Meaney, Richard A.
Harwich Port, MA
Attorney
Shaver, Howard D.
Leawood, KS
Attorney
Sims, Thomas
Tonka Bay, MN
CPA
Wallin, Hans
Arthur, ND
Attorney
Freeman, Dale L.
North Royalton, OH
CPA
2002–37 I.R.B.
538
Date of Suspension
Indefinite
from
February 2, 2001
Indefinite
from
February 23, 2001
Indefinite
from
June 25, 2001
Indefinite
from
June 25, 2001
Indefinite
from
June 25, 2001
Indefinite
from
July 20, 2001
Indefinite
from
July 20, 2001
Indefinite
from
July 20, 2001
Indefinite
from
July 20, 2001
Indefinite
from
July 20, 2001
Indefinite
from
July 20, 2001
Indefinite
from
July 20, 2001
Indefinite
from
July 20, 2001
Indefinite
from
July 20, 2001
Indefinite
from
July 20, 2001
Indefinite
from
July 20, 2001
Indefinite
from
July 20, 2001
Indefinite
from
August 6, 2001
September 16, 2002
Name
Huffman, Richard E.
Address
Riverside, CA
Designation
CPA
Lawrence, William E.
Salinas, CA
CPA
Marks, William J.
New York, NY
CPA
Parker, George
Honolulu, HI
Attorney
Pham, Van Luong
Houston, TX
Enrolled Agent
Pirro, Jr., Albert J.
Rye, NY
Attorney
Pollacheck, Mark E.
Califon, NJ
Enrolled Agent
Price, Padget C.
Corona, CA
Attorney
Ragusa, Sebastian
Hicksville, NY
Attorney
Ranum, Karl M.
Stillwater, MN
Attorney
Ross, Daniel P.
Ashtabula, OH
CPA
Shea, Michael P.
Myrtle Beach, SC
CPA
Tatman, Elizabeth A.
Mission Viejo, CA
CPA
Taylor, Murray E.
Houston, TX
CPA
Truex, Anthony J.
Port Hueneme, CA
CPA
Utterback, Thomas M.
Gerald, MO
Attorney
Zauft, Steven J.
San Antonio, TX
Attorney
Hancock, George B.
New Bern, NC
CPA
September 16, 2002
539
Date of Suspension
Indefinite
from
August 6, 2001
Indefinite
from
August 6, 2001
Indefinite
from
August 6, 2001
Indefinite
from
August 6, 2001
Indefinite
from
August 6, 2001
Indefinite
from
August 6, 2001
Indefinite
from
August 6, 2001
Indefinite
from
August 6, 2001
Indefinite
from
August 6, 2001
Indefinite
from
August 6, 2001
Indefinite
from
August 6, 2001
Indefinite
from
August 6, 2001
Indefinite
from
August 6, 2001
Indefinite
from
August 6, 2001
Indefinite
from
August 6, 2001
Indefinite
from
August 6, 2001
Indefinite
from
August 6, 2001
Indefinite
from
June 24, 2002
2002–37 I.R.B.
Name
Nadale, Richard D.
Address
Petaluma, CA
Designation
CPA
Date of Suspension
Indefinite
from
June 24, 2002
Resignations of Enrolled Agents
Under Title 31, Code of Federal Regulations, Part 10, an enrolled agent, in order to avoid the institution or conclusion of
a proceeding for his or her disbarment or
suspension from practice before the Inter-
nal Revenue Service, may offer his or her
resignation as an enrolled agent. The Director of Practice, in his discretion, may accept the offered resignation.
The Director of Practice has accepted offers of resignation as an enrolled agent from
the following individuals:
Name
Address
Date of Resignation
Fuener, Donald C.
Springfield, IL
Effective December 31, 2001
Clark, Robert A.
Chico, CA
Effective January 1, 2002
Sarmiento, Romulo B.
San Francisco, CA
Effective March 31, 2002
Goetz, Roger H.
Waseca, MN
Effective June 24, 2002
2002–37 I.R.B.
540
September 16, 2002
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.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions 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.
Abbreviations
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.
September 16, 2002
i
2002–37 I.R.B.
Numerical Finding List1
Proposed Regulations:—Continued
Treasury Decisions:—Continued
Bulletin 2002–26 through 2002–36
REG–115285–01, 2002–27 I.R.B. 62
REG–115781–01, 2002–33 I.R.B. 380
REG–116644–01, 2002–31 I.R.B. 268
REG–123345–01, 2002–32 I.R.B. 321
REG–126024–01, 2002–27 I.R.B. 64
REG–136311–01, 2002–36 I.R.B. 485
REG–164754–01, 2002–30 I.R.B. 212
REG–165868–01, 2002–31 I.R.B. 270
REG–106359–02, 2002–34 I.R.B. 405
REG–122564–02, 2002–26 I.R.B. 25
REG–123305–02, 2002–26 I.R.B. 26
REG–124256–02, 2002–33 I.R.B. 383
REG–133254–02, 2002–34 I.R.B. 412
9010, 2002–33 I.R.B. 341
9011, 2002–33 I.R.B. 356
9012, 2002–34 I.R.B. 389
9014, 2002–35 I.R.B. 429
Announcements:
2002–59, 2002–26 I.R.B. 28
2002–60, 2002–26 I.R.B. 28
2002–61, 2002–27 I.R.B. 72
2002–62, 2002–27 I.R.B. 72
2002–63, 2002–27 I.R.B. 72
2002–64, 2002–27 I.R.B. 72
2002–65, 2002–29 I.R.B. 182
2002–66, 2002–29 I.R.B. 183
2002–67, 2002–30 I.R.B. 237
2002–68, 2002–31 I.R.B. 283
2002–69, 2002–31 I.R.B. 283
2002–70, 2002–31 I.R.B. 284
2002–71, 2002–32 I.R.B. 323
2002–72, 2002–32 I.R.B. 323
2002–73, 2002–33 I.R.B. 387
2002–74, 2000–33 I.R.B. 387
2002–75, 2002–34 I.R.B. 416
2002–76, 2002–35 I.R.B. 471
2002–77, 2002–35 I.R.B. 471
2002–78, 2002–36 I.R.B. 514
2002–79, 2002–36 I.R.B. 515
2002–80, 2002–36 I.R.B. 515
Notices:
2002–42, 2002–27 I.R.B. 36
2002–43, 2002–27 I.R.B. 38
2002–44, 2002–27 I.R.B. 39
2002–45, 2002–28, I.R.B. 93
2002–46, 2002–28 I.R.B. 96
2002–47, 2002–28 I.R.B. 97
2002–48, 2002–29 I.R.B. 130
2002–49, 2002–29 I.R.B. 130
2002–50, 2002–28 I.R.B. 98
2002–51, 2002–29 I.R.B. 131
2002–52, 2002–30 I.R.B. 187
2002–53, 2002–30 I.R.B. 187
2002–54, 2002–30 I.R.B. 189
2002–55, 2002–36 I.R.B. 481
2002–56, 2002–32 I.R.B. 319
2002–57, 2002–33 I.R.B. 379
2002–58, 2002–35 I.R.B. 432
2002–59, 2002–36 I.R.B. 481
2002–60, 2002–36 I.R.B. 482
Proposed Regulations:
REG–248110–96, 2002–26 I.R.B. 19
REG–110311–98, 2002–28 I.R.B. 109
REG–103823–99, 2002–27 I.R.B. 44
REG–103829–99, 2002–27 I.R.B. 59
REG–103735–00, 2002–28 I.R.B. 109
REG–106457–00, 2002–26 I.R.B. 23
REG–106871–00, 2002–30 I.R.B. 190
REG–106876–00, 2002–34 I.R.B. 392
REG–106879–00, 2002–34 I.R.B. 402
REG–107524–00, 2002–28 I.R.B. 110
Revenue Procedures:
2002–43, 2002–28 I.R.B. 99
2002–44, 2002–26 I.R.B. 10
2002–45, 2002–27 I.R.B. 40
2002–46, 2002–28 I.R.B. 105
2002–47, 2002–29 I.R.B. 133
2002–49, 2002–29 I.R.B. 172
2002–50, 2002–29 I.R.B. 173
2002–51, 2002–29 I.R.B. 175
2002–52, 2002–31 I.R.B. 242
2002–53, 2002–31 I.R.B. 253
2002–54, 2002–35 I.R.B. 432
2002–55, 2002–35 I.R.B. 435
2002–56, 2002–36 I.R.B. 483
Revenue Rulings:
2002–38, 2002–26 I.R.B. 4
2002–39, 2002–27 I.R.B. 33
2002–40, 2002–27 I.R.B. 30
2002–41, 2002–28 I.R.B. 75
2002–42, 2002–28 I.R.B. 76
2002–43, 2002–28 I.R.B. 85
2002–44, 2002–28 I.R.B. 84
2002–45, 2002–29 I.R.B. 116
2002–46, 2002–29 I.R.B. 117
2002–47, 2002–29 I.R.B. 119
2002–48, 2002–31 I.R.B. 239
2002–49, 2002–32 I.R.B. 288
2002–50, 2002–32 I.R.B. 292
2002–51, 2002–33 I.R.B. 327
2002–52, 2002–34 I.R.B. 388
2002–53, 2002–35 I.R.B. 427
Treasury Decisions:
8997, 2002–26 I.R.B. 6
8998, 2002–26 I.R.B. 1
8999, 2002–28 I.R.B. 78
9000, 2002–28 I.R.B. 87
9001, 2002–29 I.R.B. 128
9002, 2002–29 I.R.B. 120
9003, 2002–32 I.R.B. 294
9004, 2002–33 I.R.B. 331
9005, 2002–32 I.R.B. 290
9006, 2002–32 I.R.B. 315
9007, 2002–33 I.R.B. 349
9008, 2002–33 I.R.B. 335
9009, 2002–33 I.R.B. 328
1
A cumulative list of all revenue rulings, revenue
procedures, Treasury decisions, etc., published in
Internal Revenue Bulletins 2002–1 through 2002–25 is
in Internal Revenue Bulletin 2002–26, dated July 1, 2002.
2002–37 I.R.B.
ii
September 16, 2002
Finding List of Current Actions
on Previously Published Items1
Bulletin 2002–26 through 2002–36
Announcements:
98–99
Superseded by
Rev. Proc. 2002–44, 2002–26 I.R.B. 10
2000–4
Modified by
Ann. 2002–60, 2002–26 I.R.B. 28
2001–9
Superseded by
Rev. Proc. 2002–44, 2002–26 I.R.B. 10
Proposed Regulations:
REG–209114–90
Corrected by
Ann. 2002–65, 2002–29 I.R.B. 182
REG–209813–96
Withdrawn by
REG–106871–00, 2002–30 I.R.B. 190
REG–103823–99
Corrected by
Ann. 2002–67, 2002–30 I.R.B. 237
Ann. 2002–79, 2002–36 I.R.B. 515
REG–105885–99
Corrected by
Ann. 2002–67, 2002–30 I.R.B. 237
REG–105369–00
Clarified by
Notice 2002–52, 2002–30 I.R.B. 187
Corrected by
Ann. 2002–67, 2002–30 I.R.B. 237
REG–118861–00
Corrected by
Ann. 2002–67, 2002–30 I.R.B. 237
REG–126100–00
Withdrawn by
REG–133254–02, 2002–34 I.R.B. 412
REG–136193–01
Corrected by
Ann. 2002–67, 2002–30 I.R.B. 237
Revenue Procedures:
Revenue Rulings—Continued:
91–23
Modified and superseded by
Rev. Proc. 2002–52, 2002–31 I.R.B. 242
65–129
Obsoleted by
T.D. 9010, 2002–33 I.R.B. 341
91–26
Modified and superseded by
Rev. Proc. 2002–52, 2002–31 I.R.B. 242
67–197
Obsoleted by
T.D. 9010, 2002–33 I.R.B. 341
95–18
Superseded by
Rev. Proc. 2002–51, 2002–29 I.R.B. 175
69–259
Modified and superseded by
Rev. Rul. 2002–50, 2002–32 I.R.B. 292
96–13
Modified and superseded by
Rev. Proc. 2002–52, 2002–31 I.R.B. 242
96–14
Modified and superseded by
Rev. Proc. 2002–52, 2002–31 I.R.B. 242
96–53
Amplified by
Rev. Proc. 2002–52, 2002–31 I.R.B. 242
2001–12
Obsoleted by
T.D. 9004, 2002–33 I.R.B. 331
2001–17
Modified and superseded by
Rev. Proc. 2002–47, 2002–29 I.R.B. 133
2001–26
Superseded by
Rev. Proc. 2002–53, 2002–31 I.R.B. 253
2002–9
Modified and amplified by
Rev. Proc. 2002–46, 2002–28 I.R.B. 105
Amplified, clarified, and modified by
Rev. Proc. 2002–54, 2002–35 I.R.B. 432
69–595
Obsoleted in part by
T.D. 9010, 2002–33 I.R.B. 341
70–608
Obsoleted in part by
T.D. 9010, 2002–33 I.R.B. 341
73–232
Obsoleted by
T.D. 9010, 2002–33 I.R.B. 341
76–225
Revoked by
REG–115781–01, 2002–33 I.R.B. 380
77–53
Obsoleted by
T.D. 9010, 2002–33 I.R.B. 341
85–50
Obsoleted by
T.D. 2002–33 I.R.B. 341
92–17
Amplified by
Rev. Rul. 2002–49, 2002–32 I.R.B. 288
2002–13
Modified by
Rev. Proc. 2002–45, 2002–27 I.R.B. 40
92–75
Clarified by
Rev. Proc. 2002–52, 2002–31 I.R.B. 242
2002–19
Amplified and clarified by
Rev. Proc. 2002–54, 2002–35 I.R.B. 432
93–70
Obsoleted by
T.D. 9010, 2002–33 I.R.B. 341
Revenue Rulings:
94–76
Amplified by
Rev. Rul. 2002–42, 2002–28 I.R.B. 76
REG–161424–01
Corrected by
Ann. 2002–67, 2002–30 I.R.B. 237
54–571
Obsoleted by
T.D. 9010, 2002–33 I.R.B. 341
REG–165706–01
Corrected by
Ann. 2002–67, 2002–30 I.R.B. 237
55–606
Obsoleted by
T.D. 9010, 2002–33 I.R.B. 341
8997
Corrected by
Ann. 2002–68, 2002–31 I.R.B. 283
REG–102740–02
Corrected by
Ann. 2002–67, 2002–30 I.R.B. 237
59–328
Obsoleted by
T.D. 9010, 2002–33 I.R.B. 341
8999
Corrected by
Ann. 2002–71, 2002–32 I.R.B. 323
REG–123305–02
Corrected by
Ann. 2002–69, 2002–31 I.R.B. 283
64–36
Obsoleted by
T.D. 9010, 2002–33 I.R.B. 341
Treasury Decisions:
1
A cumulative list of current actions on previously published
items in Internal Revenue Bulletins 2002–1 through 2002–25 is
in Internal Revenue Bulletin 2002–26, dated July 1, 2002.
September 16, 2002
iii
2002–37 I.R.B.
This page is reserved for missing child Christopher Temple.
2002–37 I.R.B.
September 16, 2002
This page is reserved for missing child Michelle Otter.
September 16, 2002
2002–37 I.R.B.
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.