Internal Revenue Bulletin 1998-29 (PDF rendition): IRS Announcements

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing. Whole bulletin rendition: numbered items are identified below; other legal material and publisher context remain included. This is not a new standalone advance release.

INCOME TAX
T.D. 8773, page 4.
REG–116608–97, page 12.
Temporary and proposed regulations under section 32 of
the Code provide guidance to taxpayers who have been de-
nied the earned income credit (EIC) as a result of the defi-
ciency procedures and wish to claim the EIC in a subsequent
year. A public hearing on the proposed regulations will be
held on October 21, 1998.
EMPLOYEE PLANS
Announcement 98–62, page 13.
This announcement requests public comments relating to
section 1510 of the Taxpayer Relief Act of 1997, which pro-
vides that the Secretary of the Treasury shall issue guid-
ance no later than December 31, 1998, regarding the use
of new technologies by sponsors and administrators of re-
tirement plans while maintaining the protection of the rights
of participants and beneficiaries.
EXEMPT ORGANIZATIONS
Announcement 98–68, page 14.
A list is given of organizations now classified as private foun-
dations.
EMPLOYMENT TAX
T.D. 8771, page 6.
REG–110403–98, page 11.
Final, temporary, and proposed regulations under section
6302 of the Code relate to the deposit of federal employ-
ment taxes.
EXCISE TAX
Notice 98–36, page 8.
T.D. 8685, 1996–2 C.B. 174, relating to the deposit of ex-
cise taxes, is amended.
ADMINISTRATIVE
Rev. Proc. 98–43, page 8.
Disclosure Authorization List, Rev. Proc. 80–46, 1980–2
C.B. 779, is obsolete. The Service advises a business entity
to use Form 8821, Tax Information Authorization, to desig-
nate its employees to receive its tax information.
REG–104641–97, page 9.
Proposed regulations under section 1092 of the Code pro-
vides guidance on the application of the rules governing
qualified covered calls. A public hearing will be held on
November 4, 1998.
Internal Revenue
bbuulllleettiinn
Bulletin No. 1998–29
July 20, 1998
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.
Department of the Treasury
Internal Revenue Service
Finding Lists begin on page 18.

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 prod-
ucts and services; and perform in a manner warranting
the highest degree of public confidence in our integrity, effi-
ciency, and fairness.
2
Statement of Principles
of Internal Revenue
Tax Administration
The function of the Internal Revenue Service is to adminis-
ter 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 provi-
sions in light of the Congressional purpose in enacting them;
and to perform this work in a fair and impartial manner, with
neither a government nor a taxpayer point of view.
At the heart of administration is interpretation of the Code. It
is the responsibility of each person in the Service, charged
with the duty of interpreting the law, to try to find the true
meaning of the statutory provision and not to adopt a
strained construction in the belief that he or she is “protect-
ing the revenue.” The revenue is properly protected only
when we ascertain and apply the true meaning of the statute.
The Service also has the responsibility of applying and
administering the law in a reasonable, practical manner.
Issues should only be raised by examining officers when
they have merit, never arbitrarily or for trading purposes.
At the same time, the examining officer should never hesi-
tate to raise a meritorious issue. It is also important that
care be exercised not to raise an issue or to ask a court to
adopt a position inconsistent with an established Service
position.
Administration should be both reasonable and vigorous. It
should be conducted with as little delay as possible and
with great courtesy and considerateness. It should never
try to overreach, and should be reasonable within the
bounds of law and sound administration. It should, howev-
er, be vigorous in requiring compliance with law and it
should be relentless in its attack on unreal tax devices and
fraud.

The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing offi-
cial 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 consoli-
dated 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 sub-
stantive 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 other-
wise indicated. Procedures relating solely to matters of in-
ternal 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 pub-
lished rulings and procedures, the effect of subsequent leg-
islation, regulations, court decisions, rulings, and proce-
dures must be considered, and Service personnel and oth-
ers concerned are cautioned against reaching the same con-
clusions in other cases unless the facts and circumstances
are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions, and Subpart B, Legislation and Related
Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to
these subjects are contained in the other Parts and Sub-
parts. Also included in this part are Bank Secrecy Act Admin-
istrative Rulings. Bank Secrecy Act Administrative Rulings
are issued by the Department of the Treasury’s Office of the
Assistant Secretary (Enforcement).
Part IV.—Items of General Interest.
With the exception of the Notice of Proposed Rulemaking
and the disbarment and suspension list included in this part,
none of these announcements are consolidated in the Cumu-
lative Bulletins.
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 semi-
annual period, respectively.
3
Introduction
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.

July 20, 199841998–29 I.R.B.
Section 32.—Earned Income
26 CFR 1.32–3T: Eligibility requirements
(temporary).
T.D. 8773
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 602
EIC Eligibility Requirements
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Temporary regulations.
SUMMARY: This document contains
temporary regulations that provide guid-
ance to taxpayers who have been denied
the earned income credit (EIC) as a result
of the deficiency procedures and wish to
claim the EIC in a subsequent year. The
temporary regulations apply to taxpayers
claiming the EIC for taxable years begin-
ning after December 31, 1997, where the
taxpayer’s EIC claim was denied for a
taxable year beginning after December
31, 1996. The text of these temporary
regulations also serves as the text of pro-
posed regulations set forth in REG–
116608–97, page 12 of this Bulletin.
DATES: Effective date:June 25, 1998.
Applicability dates:For dates of ap-
plicability, see §1.32–3T(f) of these regu-
lations.
FOR FURTHER INFORMATION CON-
TACT: Karin Loverud at 202-622-6060
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
These regulations are being issued
without prior notice and public procedure
pursuant to the Administrative Procedure
Act (5 U.S.C. 553). For this reason, the
collection of information contained in
these regulations has been reviewed and,
pending receipt and evaluation of public
comments, approved by the Office of
Management and Budget under control
number 1545–1575. Responses to this
collection of information are mandatory.
An agency may not conduct or sponsor,
and a person is not required to respond to,
a collection of information unless it dis-
plays a valid control number assigned by
the Office of Management and Budget.
For further information concerning this
collection of information, and where to
submit comments on the collection of in-
formation and the accuracy of the esti-
mated burden, and suggestions for reduc-
ing this burden, please refer to the
preamble to the cross-referencing notice
of proposed rulemaking published in
REG–116608–97.
Books or records relating to a collec-
tion of information must be retained as
long as their contents may become mater-
ial in the administration of any internal
revenue law. Generally, tax returns and
tax return information are confidential, as
required by 26 U.S.C. 6103.
Background
This document contains amendments to
the Income Tax Regulations (26 CFR part
1) providing guidance relating to the re-
quirement that taxpayers who are denied
the EIC for a taxable year demonstrate
their eligibility to claim the EIC in a sub-
sequent taxable year. This requirement is
described in section 32(k)(2), which was
added by section 1085(a)(1) of the Tax-
payer Relief Act of 1997 (Public Law
105–34, 111 Stat. 788).
Section 32(k)(2) pertains to taxpayers
who are denied the EIC as a result of the
deficiency procedures under subchapter B
of chapter 63 (the deficiency procedures).
A taxpayer who has been denied the EIC
for any taxable year as a result of the defi-
ciency procedures is ineligible to claim
the EIC for a subsequent taxable year un-
less the taxpayer provides information re-
quired by the Secretary demonstrating eli-
gibility for the EIC. If the taxpayer
demonstrates eligibility for the EIC, the
taxpayer is not required to provide this in-
formation in the future unless the IRS
again denies the EIC as a result of the de-
ficiency procedures.
If the taxpayer fails to provide the re-
quired information or the information
provided does not demonstrate eligibility
for the EIC, the requirements of section
32(k)(2) are not satisfied. In such circum-
stances, the IRS can treat the failure to
meet these requirements as a mathemati-
cal or clerical error.
In the case of deficiencies attributable
to certain mathematical and clerical er-
rors, enumerated in section 6213(g), the
IRS is authorized to make a summary as-
sessment, without following the normal
deficiency procedures. In the case of EIC
claims, mathematical and clerical errors
can include both errors that apply gener-
ally to all returns and certain errors spe-
cific to the EIC. For example, mathemat-
ical and clerical errors include situations
in which (1) a taxpayer fails to provide a
correct taxpayer identification number re-
quired under section 32, or (2) a taxpayer
who claims the EIC with respect to net
earnings from self-employment fails to
pay the proper amount of self-employ-
ment tax on the net earnings. As noted
above, the IRS is now authorized to treat
failure to meet the requirements of section
32(k)(2) as a mathematical or clerical
error.
Ineligibility for the EIC under these
new rules is subject to review by the
courts.
The new provision applies to taxpayers
who are denied the EIC on their return for
any taxable year beginning after 1996.
Explanation of Provisions
A taxpayer who has been denied the
EIC, in whole or in part, as a result of de-
ficiency procedures is ineligible to file a
return claiming the EIC subsequent to the
denial until the taxpayer provides evi-
dence of eligibility for the EIC. Defi-
ciency procedures include administrative
procedures (other than procedures related
to mathematical or clerical errors) that re-
sult in an assessment of a deficiency in
tax, whether or not a notice of deficiency
is issued. To demonstrate current eligibil-
ity, the regulations require the taxpayer to
complete Form 8862, Information To
Claim Earned Income Credit After Disal-
lowance. Form 8862 contains a series of
questions designed to assist the IRS in de-
termining whether the taxpayer is eligible
to claim the EIC under section 32 for the
subsequent taxable year. A taxpayer fails
to demonstrate eligibility if, for example,
Part I. Rulings and Decisions Under the Internal Revenue Code of 1986

the form is incomplete or any item of in-
formation on the form is incorrect or in-
consistent with any item on the return. If
the taxpayer properly demonstrates eligi-
bility for the EIC, the taxpayer is not re-
quired to submit Form 8862 in the future
unless the IRS again denies the EIC as a
result of the deficiency procedures.
The regulations require the taxpayer to
attach Form 8862 to the first income tax
return on which the taxpayer claims the
EIC after the EIC has been denied as a re-
sult of the deficiency procedures. The
EIC is denied as a result of the deficiency
procedures when an assessment of a defi-
ciency is made (other than as a mathemat-
ical or clerical error under section
6213(b)(1)).
The Treasury Department and the IRS
anticipate that the Commissioner of Inter-
nal Revenue may require taxpayers to
provide documentary evidence in addition
to Form 8862. Whether or not the Com-
missioner requires taxpayers to provide
documentary evidence in addition to
Form 8862, the Commissioner may
choose to examine any return claiming
the EIC for which Form 8862 is required.
The regulations provide that if the tax-
payer fails to properly complete Form
8862 or does not demonstrate eligibility
for the EIC, the provisions of section
32(k)(2) are not satisfied. In such circum-
stances, the IRS can deny the EIC as a
mathematical or clerical error under sec-
tion 6213(g)(2)(J) [(K)] (relating to the
omission of information required by sec-
tion 32(k)(2)). If a taxpayer’s claim for
the EIC is denied under section
6213(g)(2)(J) [(K)], the taxpayer must at-
tach Form 8862 to the next return for
which the EIC is claimed.
The regulations provide that if two in-
dividuals marry after one has been denied
the EIC as a result of the deficiency pro-
cedures, the eligibility requirements apply
when they file a joint return and claim the
EIC. For example, two unmarried tax-
payers have qualifying children and claim
the EIC. The taxpayers subsequently
marry. For a taxable year preceding the
marriage, one of the taxpayers was denied
the EIC under the deficiency procedures
and has not established eligibility for a
subsequent year. In this situation, if they
claim the EIC for the taxable year in
which they marry, the demonstration of
eligibility rules will apply.
Special Analyses
It has been determined that these regu-
lations are not a significant regulatory ac-
tion as defined in Executive Order 12866.
Therefore, a regulatory assessment is not
required. It also has been determined that
section 553(b) of the Administrative Pro-
cedure Act (5 U.S.C. chapter 5) does not
apply to these regulations.
It is hereby certified that these regula-
tions will not have a significant economic
impact on a substantial number of small
entities. This certification is based upon
the fact that the underlying statute applies
only to individuals. Therefore, a Regula-
tory Flexibility Analysis under the Regu-
latory Flexibility Act (5 U.S.C. chapter 6)
is not required.
Pursuant to section 7805(f), these tem-
porary regulations will be submitted to
the Chief Counsel for Advocacy of the
Small Business Administration for com-
ment on their impact on small business.
Drafting Information
The principal author of these regula-
tions is Karin Loverud of the Office of the
Associate Chief Counsel (Employee Ben-
efits and Exempt Organizations), IRS.
However, other personnel from the IRS
and Treasury Department participated in
their development.
*****
Adoption of Amendments to the
Regulations
Accordingly, 26 CFR part 1 is amended
as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.32–3T is added to
read as follows:
§1.32–3T Eligibility Requirements
(temporary).
(a) In general.A taxpayer who has
been denied the earned income credit
(EIC), in whole or in part, as a result of
the deficiency procedures under subchap-
ter B of chapter 63 (deficiency proce-
dures) is ineligible to file a return claim-
ing the EIC subsequent to the denial until
the taxpayer demonstrates eligibility for
the EIC in accordance with paragraph (c)
of this section. If a taxpayer demonstrates
eligibility for a taxable year in accordance
with paragraph (c) of this section, the tax-
payer need not comply with those require-
ments for any subsequent taxable year un-
less the Service again denies the EIC as a
result of the deficiency procedures.
(b) Denial of the EIC as a result of the
deficiency procedures.For purposes of
this section, denial of the EIC as a result of
the deficiency procedures occurs when a
tax on account of the EIC is assessed as a
deficiency (other than as a mathematical
or clerical error under section 6213(b)(1)).
(c) Demonstration of eligibility. In the
case of a taxpayer to whom paragraph (a)
of this section applies, and except as oth-
erwise provided by the Commissioner, no
claim for the EIC filed subsequent to the
denial is allowed unless the taxpayer prop-
erly completes Form 8862, Information To
Claim Earned Income Credit After Disal-
lowance,demonstrating eligibility for the
EIC, and otherwise is eligible for the EIC.
If any item of information on Form 8862
is incorrect or inconsistent with any item
on the return, the taxpayer will be treated
as not demonstrating eligibility for the
EIC. The taxpayer must attach Form 8862
to the taxpayer’s first income tax return on
which the taxpayer claims the EIC after
the EIC has been denied as a result of the
deficiency procedures.
(d) Failure to demonstrate eligibility.
If a taxpayer to whom paragraph (a) of
this section applies fails to satisfy the re-
quirements of paragraph (c) of this sec-
tion with respect to a particular taxable
year, the IRS can deny the EIC as a math-
ematical or clerical error under section
6213(g)(2)(J) [(K)].
(e) Special rule where one spouse de-
nied EIC. The eligibility requirements set
forth in this section apply to taxpayers fil-
ing a joint return where one spouse was
denied the EIC for a taxable year prior to
marriage and has not established eligibil-
ity as either an unmarried or married tax-
payer for a subsequent taxable year.
(f) Effective date.This section applies
to returns claiming the EIC for taxable
years beginning after December 31,
1997, where the EIC was denied for a
taxable year beginning after December
31, 1996.
1998–29 I.R.B.5July 20, 1998

PART 602—OMB CONTROL
NUMBERS UNDER THE
PAPERWORK REDUCTION ACT
Par. 3. The authority citation for part
602 continues to read as follows:
Authority: 26 U.S.C. 7805.
Par. 4. In §602.101, paragraph (c) is
amended by adding an entry in numerical
order to read as follows:
§602.101 OMB Control numbers.
*****
(c) * * *
CFR part or sectionCurrent OMB
where identified and control No.
described
*****
1.32–3T . . . . . . . . . . . . . . . . 1545–1575
*****
Michael P. Dolan,
Deputy Commissioner of
Internal Revenue.
Approved May 18, 1998.
Donald C. Lubick,
Assistant Secretary of
the Treasury.
(Filed by the Office of the Federal Register on June
24, 1998, 8:45 a.m., and published in the issue of the
Federal Register for June 25, 1998, 63 F.R. 34594)
Section 6302.—Mode or Time of
Collection
26 CFR 31.6302–1: Federal tax deposit rules for
withheld income taxes and taxes under the Federal
Insurance Contributions Act (FICA) attributable to
payments made after December 31, 1992.
T.D. 8771
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 31
Federal Employment Tax
Deposits—
De MinimisRule
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Temporary and final regula-
tions.
SUMMARY: This document contains
temporary and final regulations relating to
the deposit of Federal employment taxes.
The regulations change the de minimis de-
posit rule for quarterly and annual return
periods. The regulations affect taxpayers
required to make deposits of Federal em-
ployment taxes. The text of the temporary
regulations also serves as the text of the
proposed regulations set forth in
REG–110403–98, page 11 of this Bulletin.
DATES: Effective date:These regula-
tions are effective June 16, 1998.
Applicability date: For dates of applic-
ability, see §31.6302–1T(f)(4).
FOR FURTHER INFORMATION CON-
TACT: Vincent Surabian (202) 622-4940
(not a toll-free call).
SUPPLEMENTARY INFORMATION:
Background and Explanation of
Provisions
This document contains amendments to
26 CFR part 31, Employment Taxes and
Collection of Income Tax at Source. Sec-
tion 31.6302–1(f)(4) provides that if the
total amount of accumulated employment
taxes for the quarter is less than $500 and
the amount is fully deposited or remitted
with a timely filed return for the quarter,
the amount deposited or remitted will be
deemed to be timely deposited.
The temporary regulations change the
$500 threshold to $1,000. In addition, the
regulations replace the term “quarter”
with the term “return period” since some
employment taxes are reported on an an-
nual basis (Forms 943, 945, and CT-1)
rather than quarterly (Form 941). Thus, a
taxpayer that has accumulated employ-
ment taxes of less than $1,000 for a return
period (quarterly or annual, as the case
may be) does not have to make deposits
but may remit its full liability with a
timely filed return for the return period.
Special Analyses
It has been determined that this Trea-
sury decision is not a significant regula-
tory action as defined in EO 12866.
Therefore, a regulatory assessment is not
required. It also has been determined that
section 553(b) of the Administrative Pro-
cedure Act (5 U.S.C. chapter 5) does not
apply to these regulations, and because
these regulations do not impose a collec-
tion of information on small entities, the
Regulatory Flexibility Act (5 U.S.C.
chapter 6) does not apply. Pursuant to
section 7805(f) of the Internal Revenue
Code, these regulations will be submitted
to the Chief Counsel for Advocacy of the
Small Business Administration for com-
ment on their impact on small business.
Drafting Information
The principal author of these regula-
tions is Vincent Surabian, Office of Assis-
tant Chief Counsel (Income Tax & Ac-
counting). However, other personnel
from the IRS and Treasury Department
participated in their development.
*****
Adoption of Amendments to the
Regulations
Accordingly, 26 CFR part 31 is
amended as follows:
PART 31—EMPLOYMENT TAXES
AND COLLECTION OF INCOME
TAX AT SOURCE
Paragraph 1. The authority citation for
part 31 is amended by adding an entry in
numerical order to read as follows:
Authority: 26 U.S.C. 7805. * * *
§31.6302–1T also issued under 26
U.S.C. 6302(a) and (c). * * *
Par. 2. In §31.6302–1, a new sentence
is added at the end of paragraph (f)(4) to
read as follows:
§31.6302–1 Federal tax deposit rules for
withheld income taxes and taxes under
the Federal Insurance Contributions Act
(FICA) attributable to payments made
after December 31, 1992.
*****
(4) De Minimis rule.* * * For guid-
ance regarding de minimisamounts for
quarterly return periods beginning on or
after July 1, 1998, and annual return peri-
ods beginning on or after January 1, 1999,
see §31.6302–1T(f)(4).
July 20, 199861998–29 I.R.B.

*****
Par. 3. Section 31.6302–1T is added to
read as follows:
§31.6302–1T Federal tax deposit rules
for withheld income taxes and taxes
under the Federal Insurance
Contributions Act (FICA) attributable to
payments made after December 31, 1992
(temporary).
(a) through (f)(3). [Reserved] For fur-
ther guidance, see §31.6302–1(a) through
(f)(3).
(f)(4) De Minimis rule.For quarterly re-
turn periods beginning on or after July 1,
1998, and annual return periods beginning
on or after January 1, 1999, if the total
amount of accumulated employment taxes
for the return period is less than $1,000 and
the amount is fully deposited or remitted
with a timely filed return for the return pe-
riod, the amount deposited or remitted will
be deemed to have been timely deposited.
(f)(5) through (m). [Reserved] For fur-
ther guidance, see §31.6302–1(g) through
(m).
Michael P. Dolan,
Deputy Commissioner of
Internal Revenue.
Approved June 1, 1998.
Donald C. Lubick,
Assistant Secretary of
the Treasury.
(Filed by the Office of the Federal Register on June
15, 1998, 8:45 a.m., and published in the issue of the
Federal Register for June 16, 1998, 63 F.R. 32735)
1998–29 I.R.B.7July 20, 1998

July 20, 199881998–29 I.R.B.
Deposit of Excise Taxes
Notice 98–36
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Technical amendment.
SUMMARY: This document contains
technical amendments to final regulations
(T.D. 8685 [1996–2, C.B. 174]), which
were published in the Federal Register
for November 12, 1996, at 61 F.R. 58004,
relating to deposit of excise taxes.
EFFECTIVE DATE: March 31, 1998.
FOR FURTHER INFORMATION CON-
TACT: Dale Goode (202) 622-6795 (not
a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The final regulations that are the sub-
ject of this technical amendment provide
guidance under section 6302 relating to
deposit of excise taxes.
Need for Correction
This amendment serves to correct refer-
ences found in §40.6302(c)–3. Currently,
a number of incorrect references appear in
§40.6302(c)–3(g) of the Code of Federal
Regulations (26 CFR part 40). As pub-
lished in the Federal Registeron Novem-
ber 12, 1996 (61 F.R. 58004), paragraph
(f) of §40.6302(c)–3 was redesignated as
paragraph (g), and the internal references
were not changed to reflect this.
*****
Accordingly, 26 CFR part 40 is
amended by making the following cor-
recting amendments:
PART 40—EXCISE TAX
PROCEDURAL REGULATIONS
Paragraph 1. The authority citation for
part 40 continues to read in part as fol-
lows:
Authority: 26 U.S.C. 7805 * * *
§40.6302(c)–3(g) [Amended]
Par. 2. Section 40.6302(c)–3 is
amended by removing the reference “(f)”
and adding “(g)” in its place in the follow-
ing locations:
1. Paragraph (g)(1) introductory text.
2. Paragraphs (g)(2)(i) and (g)(2)(ii).
3. Paragraph (g)(3) introductory text.
4. Paragraph (g)(3), paragraph (b) of
the Example.
Dale D. Goode,
Federal Register Liaison Officer,
Assistant Chief Counsel (Corporate).
(Filed by the Office of the Federal Register on
March 30, 1998, 8:45 a.m., and published in the
issue of the Federal Register for March 31, 1998, 63
F.R. 15292)
26 CFR 601.502: Requirement for conference—
recognition to practice and, in certain cases, power
of attorney or tax information authorization.
(Also, Part I, section 6103; 301.6103(c)–1.)
Rev. Proc. 98–43
The Internal Revenue Service is contin-
uing its program of reviewing and identi-
fying those revenue procedures that, al-
though not specifically revoked or
superseded, are no longer considered de-
terminative. The revenue procedure listed
below relates to the Disclosure Authoriza-
tion Lists submitted by business entities
to the district office(s) with which tele-
phone contact is expected and maintained
only by those district offices. These lists
provide the names and social security
numbers of employees who are autho-
rized to receive confidential tax informa-
tion of the business entities. The revenue
procedure is made obsolete by a change in
the Service’s telephone environment.
Presently, if a Disclosure Authorization
List is in effect, an authorized employee
who contacts the Service by telephone to
resolve a business tax matter may be talk-
ing to a customer service representative
from a district or service center that does
not have access to the Disclosure Autho-
rization List. In this situation, the cus-
tomer service representative would not be
able to determine if the employee on the
telephone has authorization to receive
confidential tax information of the
business.
In the present environment, the Service
advises a business entity to use Form
8821, Tax Information Authorization, to
designate its employees to receive its tax
information. The designated employees’
names are recorded on the Centralized
Authorization File so that the employees’
authorizations would be available in any
district or service center. See Statement
of Procedural Rules, 1991-1 C.B. 717 for
more information.
Accordingly, the revenue procedure
listed below is obsolete.
Rev. Proc. No.C.B. Citation
80–461980–2, 779
Part III. Administrative, Procedural, and Miscellaneous

1998–29 I.R.B.9July 20, 1998
Part IV. Items of General Interest
Notice of Proposed Rulemaking
and Notice of Public Hearing
Equity Options Without Standard
Terms; Special Rules and
Definitions
REG–104641–97
AGENCY: Internal Revenue Service
(IRS), Treasury
ACTION: Notice of proposed rulemak-
ing and notice of public hearing.
SUMMARY: This document contains
proposed regulations providing guidance
on the application of the rules governing
qualified covered calls. The new rules ad-
dress concerns that were created by the
introduction of new financial instruments
after the enactment of the qualified cov-
ered call rules. The proposed regulations
will provide guidance to taxpayers hold-
ing qualified covered calls. This docu-
ment also provides notice of public hear-
ing on these proposed regulations.
DATES: Written comments must be re-
ceived by September 23, 1998. Requests
to speak (with outlines of oral comments)
at the public hearing scheduled for No-
vember 4, 1998, must be submitted by
October 14, 1998.
ADDRESSES: Send submissions to:
CC:DOM:CORP:R (REG–104641–97),
room 5228, Internal Revenue Service,
POB 7604, Ben Franklin Station, Wash-
ington, DC 20044. Submissions may be
hand delivered between the hours of 8
a.m. and 5 p.m. to: CC:DOM:CORP:R
(REG–104641–97), Courier’s Desk, In-
ternal Revenue Service, 1111 Constitution
Avenue, NW, Washington, DC. Alterna-
tively, taxpayers may submit comments
electronically via the Internet by selecting
the “Tax Regs” option on the IRS Home
Page, or by submitting comments directly
to the IRS Internet site at http://www.irs.
ustreas.gov/prod/tax_regs/comments.html
. The public hearing will be held in room
2615, Internal Revenue Building, 1111
Constitution Avenue, NW, Washington,
DC.
FOR FURTHER INFORMATION CON-
TACT: Concerning the regulations,
Pamela Lew, (202) 622-3950; concerning
submissions and the hearing, Michael L.
Slaughter, Jr., (202) 622-7190, (not toll-
free numbers).
SUPPLEMENTARY INFORMATION:
Background
Section 1092(c) defines a straddle as
offsetting positions with respect to per-
sonal property. Under section 1092(d)(3),
stock is personal property if the stock is
part of a straddle that involves an option
on that stock or substantially identical
stock or securities. Under section
1092(c)(4), however, writing a qualified
covered call option and owning the op-
tioned stock is not treated as a straddle for
purposes of section 1092.
The special treatment for qualified cov-
ered calls was created because Congress
believed that, in certain limited circum-
stances, a taxpayer who grants a call option
does not substantially reduce his or her risk
of loss with respect to the optioned stock.
Congress established a mechanical test to
determine whether a written call option
could substantially reduce a taxpayer’s risk
of loss and, therefore, should be subject to
treatment as one leg of a straddle. In order
to be classified as a qualified covered call
under this test, a call option must, among
other things, be exchange-traded and not
be deep in the money.
Section 1092(c)(4)(C) defines a deep-
in-the-money option as an option whose
strike price is lower than an allowed bench
mark. Under section 1092(c)(4)(D), this
bench mark is generally the highest avail-
able strike price for an option that is less
than the applicable stock price, as defined
in section 1092(c)(4)(G). The Internal
Revenue Code provides other bench
marks under specified circumstances.
At the time the qualified covered call
definition was written, listed options were
available only at standardized maturity
dates and strike price intervals. This
fixed-interval system was a basic assump-
tion of the Congressional plan for quali-
fied covered calls and, more specifically,
was the foundation for the definition of a
deep-in-the-money option.
Certain options exchanges have begun
to trade put and call equity options with
flexible terms. The terms that are flexible
include strike price, expiration date, and
exercise style (that is, American, Euro-
pean, or capped). Except as noted below,
the strike price is denominated in the
smallest interval available on the options
exchanges, which is currently 1/8 of one
dollar. To minimize the market impact of
options contract expirations, equity op-
tions with flexible terms may not expire
within 2 business days of equity options
with standardized terms. Equity options
with flexible terms are generally intended
for institutional and other large investors.
Questions have been raised as to
whether the strike prices established by
equity options with flexible terms might
establish the lowest qualified benchmark
under section 1092(c)(4)(D) for all equity
options, including those with standard-
ized terms. The following example illus-
trates this concern. If a stock is currently
selling for $62, equity options with flexi-
ble terms and option periods of not more
than 90 days could have a strike price of
$61 7/8. If the strike prices from equity
options with flexible terms were taken
into account in determining if a 90-day
equity option with standardized terms is
deep in the money, any option being sold
for less than $61 7/8 would be deep in the
money. Because the strike prices for an
equity option with standardized terms are
set in $5 intervals, the highest strike price
less than the current selling price for an
equity option with standardized terms
would be $60. Thus, any in-the-money
equity option on the stock that had stan-
dardized terms would be deep in the
money (for purposes of section
1092(c)(4)).
Explanation of Provisions
The proposed regulations provide that
the strike prices established by equity op-
tions with flexible terms are not taken into
account in determining whether equity
options that are not equity options with
flexible terms are deep in the money.
Thus, the existence of strike prices estab-
lished for equity options with flexible
terms does not affect the lowest qualified
bench mark, as determined under section
1092(c)(4)(D), for an equity option with
standardized terms. The proposed regula-
tions define equity options with flexible

July 20, 1998101998–29 I.R.B.
terms as those equity options described in
certain specified SEC releases, including
any changes approved by the SEC to
these releases.
The regulations will allow some tax-
payers, primarily institutional and other
large investors, to engage in certain ex-
change-based transactions that are cur-
rently unavailable to them and will permit
other investors to continue doing business
under section 1092 without regard to the
existence of the institutional product.
The proposed regulations do not ad-
dress whether an equity option with flexi-
ble terms is eligible for qualified covered
call treatment under section 1092(c)(4).
Comments are requested on the following
issues: (1) whether equity options with
flexible terms should be eligible for quali-
fied covered call treatment under section
1092(c)(4); (2) whether there should be
uniform rules governing the bench marks
for equity options with flexible terms and
standardized options; and (3) if uniform
rules are not appropriate, what bench
marks should apply to equity options with
flexible terms.
Proposed Effective Date
These regulations apply to equity op-
tions with flexible terms entered into on or
after the date that the Treasury Decision
adopting these rules as final regulations is
published in the Federal Register.
Special Analyses
It has been determined that this notice
of proposed rulemaking is not a signifi-
cant regulatory action as defined in EO
12866. Therefore, a regulatory assess-
ment is not required. It also has been de-
termined that section 553(b) of the Ad-
ministrative Procedure Act (5 U.S.C.
chapter 5) does not apply to these regula-
tions, and because the regulations do not
impose a collection of information on
small entities, the Regulatory Flexibility
Act (5 U.S.C. chapter 6) does not apply.
Pursuant to section 7805(f) of the Internal
Revenue Code, this notice of proposed
rulemaking will be submitted to the Chief
Counsel for Advocacy of the Small Busi-
ness Administration for comment on its
impact on small business.
Comments and Public Hearing
Before these proposed regulations are
adopted as final regulations, considera-
tion will be given to any written com-
ments (preferably a signed original and
eight (8) copies) that are submitted timely
to the IRS. All comments will be avail-
able for public inspection and copying.
A public hearing has been scheduled for
Wednesday, November 4, 1998, beginning
at 10:00 a.m. The hearing will be held in
Room 2615, Internal Revenue Building,
1111 Constitution Avenue NW, Washing-
ton DC. Because of access restrictions,
visitors will not be admitted beyond the
Internal Revenue Building lobby more
than 15 minutes before the hearing starts.
The rules of 26 CFR 601.601(a)(3)
apply to the hearing.
Persons who wish to present oral com-
ments at the hearing must submit written
comments by September 23, 1998, and
submit an outline of topics to be discussed
and the time to be devoted to each topic
(signed original and eight (8) copies) by
October 14, 1998.
A period of 10 minutes will be allotted
to each person for making comments.
An agenda showing the scheduling of
the speakers will be prepared after the
deadline for receiving outlines has
passed. Copies of the agenda will be
available free of charge at the hearing.
Drafting Information
The principal author of these regula-
tions is Pamela Lew, Office of Assistant
Chief Counsel (Financial Institutions and
Products). However, other personnel
from the IRS and Treasury Department
participated in their development.
*****
Proposed Amendments to the Regulations
Accordingly, 26 CFR part 1 is pro-
posed to be amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 is amended by adding an entry in
numerical order to read as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.1092(c)–1 also issued under 26
U.S.C. 1092(c)(4)(H). * * *
Par. 2. Section 1.1092(c)–1 is added to
read as follows:
§1.1092(c)–1 Equity options with
flexible terms.
(a) Effect on lowest qualified bench
mark for other options.The existence of
strike prices established by equity options
with flexible terms does not affect the de-
termination of the lowest qualified bench
mark, as defined in section 1092(c)(4)(D),
for any option that is not an equity option
with flexible terms.
(b) Definitions. For purposes of this
section–
(1) Equity option with flexible terms
means an equity option—
(i) That is described in the following
Securities Exchange Act Releases—
(A) Self-Regulatory Organizations;
Order Approving Proposed Rule Changes
and Notice of Filing and Order Granting
Accelerated Approval of Amendments by
the Chicago Board Options Exchange,
Inc. and the Pacific Stock Exchange, Inc.,
Relating to the Listing of Flexible Equity
Options on Specified Equity Securities,
Securities Exchange Act Release No.
34–36841 (Feb. 21, 1996); or
(B) Self-Regulatory Organizations;
Order Approving Proposed Rule Changes
and Notice of Filing and Order Granting
Accelerated Approval of Amendment
Nos. 2 and 3 to the Proposed Rule Change
by the American Stock Exchange, Inc.,
Relating to the Listing of Flexible Equity
Options on Specified Equity Securities,
Securities Exchange Act Release No.
34–37336 (June 27, 1996); or
(C) Self-Regulatory Organizations;
Order Approving Proposed Rule Change
and Notice of Filing and Order Granting
Accelerated Approval of Amendment
Nos. 2, 4 and 5 to the Proposed Rule
Change by the Philadelphia Stock Ex-
change, Inc., Relating to the Listing of
Flexible Exchange Traded Equity and
Index Options, Securities Exchange Act
Release No. 34–39549 (Jan. 23, 1998); or
(D) Any changes to the SEC releases
described in paragraphs (b)(1)(i)(A)
through (C) of this section that are ap-
proved by the Securities and Exchange
Commission; or
(ii) That is traded on any national secu-
rities exchange which is registered with
the Securities and Exchange Commission
(other than those described in the SEC
Releases set forth in paragraph (b)(1)(i) of
this section) or other market which the
Secretary determines has rules adequate
to carry out the purposes of section 1092
and is—
(A) Substantially identical to the equity
options described in paragraph (b)(1)(i) of
this section; and

1998–29 I.R.B.11July 20, 1998
(B) Approved by the Securities and Ex-
change Commission in a Securities Ex-
change Act Release.
(2) Securities Exchange Act Release
means a release issued by the Securities
and Exchange Commission. To deter-
mine identifying information for releases
referenced in paragraph (b)(1) of this sec-
tion, including release titles, identification
numbers, and issue dates, contact the Of-
fice of the Secretary, Securities and Ex-
change Commission, 450 5th Street, NW.,
Washington, DC 20549. To obtain a copy
of a Securities Exchange Act Release,
submit a written request, including the
specific release identification number,
title, and issue date, to Securities and Ex-
change Commission, Attention Public
Reference, 450 5th Street, NW., Washing-
ton, DC 20549.
(c) Effective date.These regulations
apply to equity options with flexible
terms entered into on or after the date that
the Treasury Decision adopting these reg-
ulations is published in the Federal
Register.
Michael P. Dolan,
Deputy Commissioner of
Internal Revenue.
(Filed by the Office of the Federal Register on June
24, 1998, 8:45 a.m., and published in the issue of the
Federal Register for June 25, 1998, 63 F.R. 34616)
Notice of Proposed Rulemaking
Federal Employment Tax
Deposits—
De Minimis Rule
REG–110403–98
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemak-
ing by cross-reference to temporary regu-
lations.
SUMMARY: In T.D. 8771, page 6 of this
Bulletin, the IRS is issuing temporary
regulations relating to the deposits of Fed-
eral employment taxes. The text of those
regulations also serves as the text of these
proposed regulations.
DATES: Written comments and requests
for a public hearing must be received by
September 14, 1998.
ADDRESSES: Send submissions to:
CC:DOM:CORP:R (REG–110403–98),
room 5226, Internal Revenue Service,
POB 7604, Ben Franklin Station, Wash-
ington, DC 20044. Submissions may be
hand delivered between the hours of 8:00
a.m. and 5 p.m. to: CC:DOM:CORP:R
(REG–110403–98), Courier’s Desk, In-
ternal Revenue Service, 1111 Constitution
Avenue, NW, Washington, DC. Alterna-
tively, taxpayers may submit comments
electronically via the Internet by selecting
the “Tax Regs” option on the IRS Home
Page, or by submitting comments directly
to the IRS Internet site at http://www.irs.
ustreas.gov/prod/tax_regs/comments.html.
FOR FURTHER INFORMATION CON-
TACT: Concerning the submissions,
Michael Slaughter, (202) 622-7180; con-
cerning the regulations, Vincent Surabian,
(202) 622-4940 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background and Explanation of
Provisions
Temporary regulations in T.D. 8771
amend the Employment Tax and Collec-
tion of Income Tax at Source Regulations
(26 CFR part 31) relating to section 6302.
The termporary regulations change the
de minimis rule for the deposit of Federal
employment taxes. The text of those
regulations also serves as the text of these
proposed regulations. The preamble to the
temporary regulations explain the amend-
ments.
Special Analysis
It has been determined that this notice
of proposed rulemaking is not a signifi-
cant regulatory action as defined in EO
12866. Therefore, a regulatory assess-
ment is not required. It also has been de-
termined that section 553(b) of the Ad-
ministrative Procedure Act (5 U.S.C.
chapter 5) does not apply to these regula-
tions, and because these regulations do
not impose a collection of information on
small entities, the Regulatory Flexibility
Act (5 U.S.C. chapter 6) does not apply.
Pursuant to section 7805(f) of the Internal
Revenue Code, this notice of proposed
rulemaking will be submitted to the Chief
Counsel for Advocacy of the Small Busi-
ness Administration for comment on its
impact on small business.
Comments and Requests for a
Public Hearing
Before these proposed regulations are
adopted as final regulations, considera-
tion will be given to any comments that
are submitted timely to the IRS. All com-
ments will be available for public inspec-
tion and copying. A public hearing may
be scheduled if requested by any person
that timely submits comments. If a public
hearing is scheduled, notice of the date,
time, and place for the hearing will be
published in the Federal Register.
Drafting Information
The principal author of these regula-
tions is Vincent Surabian, Office of Assis-
tant Chief Counsel (Income Tax & Ac-
counting). However, other personnel
from the IRS and the Treasury Depart-
ment participated in their development.
*****
Proposed Amendments to the Regulations
Accordingly, 26 CFR part 31 is pro-
posed to be amended as follows:
PART 31—EMPLOYMENT TAXES
AND COLLECTION OF INCOME TAX
AT SOURCE
Paragraph 1. The authority citation for
part 31 continues to read in part as fol-
lows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. In §31.6302–1, paragraph (f)(4)
is revised to read as follows:
§31.6302–1 Federal tax deposit rules for
withheld income taxes and taxes under
the Federal Insurance Contributions Act
(FICA) attributable to payments made
after December 31, 1992.
*****
(f) * * *
(4) [The text of proposed §31.6302–
1(f)(4) is the same as the text of
§31.6302–1T(f)(4)].
* * * * *
Michael P. Dolan,
Deputy Commissioner of
Internal Revenue.

(Filed by the Office of the Federal Register on June
15, 1998, 8:45 a.m., and published in the issue of the
Federal Register for June 16, 1998, 63 F.R. 32774)
Notice of Proposed Rulemaking
and Notice of Public Hearing
EIC Eligibility Requirements
REG–116608–97
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemak-
ing by cross-reference to temporary regu-
lations and notice of public hearing.
SUMMARY: In T.D. 8773, page 4 of this
Bulletin, the IRS is issuing temporary
regulations pertaining to the eligibility re-
quirements for certain taxpayers denied
the earned income credit (EIC) as a result
of the deficiency procedures. The text of
those temporary regulations also serves as
the text of these proposed regulations.
This document also provides notice of a
public hearing on these proposed regula-
tions.
DATES: Written comments must be re-
ceived by September 23, 1998. Requests
to speak (with outlines of oral comments)
at a public hearing scheduled for Wednes-
day, October 21, 1998, must be received
by September 30, 1998.
ADDRESSES: Send submissions to:
CC:DOM:CORP:R (REG–116608–97),
room 5228, Internal Revenue Service,
POB 7604, Ben Franklin Station, Wash-
ington, DC 20044. Submissions may be
hand delivered between the hours of 8
a.m. and 5 p.m. to: CC:DOM:CORP:R
(REG–116608–97), Courier’s Desk, In-
ternal Revenue Service, 1111 Constitution
Avenue, NW, Washington, DC. Alterna-
tively, taxpayers may submit comments
electronically via the Internet by selecting
the “Tax Regs” option on the IRS Home
Page, or by submitting comments directly
to the IRS Internet site at http://www.irs.
ustreas.gov/prod/tax_regs/comments.html.
The public hearing will be held in room
2615, Internal Revenue Building, 1111
Constitution Avenue, NW, Washington,
DC 20224.
FOR FURTHER INFORMATION CON-
TACT: Concerning the regulations, Karin
Loverud, 202-622-6060; concerning sub-
missions or the hearing, LaNita VanDyke,
202-622-7190 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information con-
tained in this notice of proposed rulemak-
ing has been submitted to the Office of
Management and Budget for review in ac-
cordance with the Paperwork Reduction
Act of 1995 (44 U.S.C. 3507(d)). Com-
ments on the collection of information
should be sent to the Office of Manage-
ment and Budget,Attn: Desk Officer for
the Department of the Treasury, Office of
Information and Regulatory Affairs,
Washington, DC 20503, with copies to
the Internal Revenue Service,Attn: IRS
Reports Clearance Officer, T:FP, Wash-
ington, DC 20224. Comments on the col-
lection of information should be received
by August 24, 1998. Comments are
specifically requested concerning:
Whether the proposed collection of in-
formation is necessary for the proper per-
formance of the functions of the Internal
Revenue Service, including whether the
information will have practical utility;
The accuracy of the estimated burden
associated with the proposed collection of
information (see below);
How the quality, utility, and clarity of
the information to be collected may be en-
hanced;
How the burden of complying with the
proposed collection of information may
be minimized, including through the ap-
plication of automated collection tech-
niques or other forms of information tech-
nology; and
Estimates of capital or start-up costs and
costs of operation, maintenance, and pur-
chase of services to provide information.
The collection of information in this
proposed regulation is in §1.32–3. This
information is required to conform with
the statute and to permit the taxpayer to
claim the EIC. This information will be
used by the IRS to determine whether the
taxpayer is entitled to claim the EIC. The
collection of information is mandatory.
The likely respondents are individuals.
The burden is reflected in the burden of
Form 8862.
An agency may not conduct or sponsor,
and a person is not required to respond to,
a collection of information unless it dis-
plays a valid control number assigned by
the Office of Management and Budget.
Books or records relating to a collec-
tion of information must be retained as
long as their contents may become mater-
ial in the administration of any internal
revenue law. Generally, tax returns and
tax return information are confidential, as
required by 26 U.S.C. 6103.
Background
The temporary regulations published in
T.D. 8773 add §1.32–3T to the Income
Tax Regulations.
The text of those temporary regulations
also serves as the text of these proposed
regulations. The preamble to the tempo-
rary regulations explains the temporary
regulations.
Special Analyses
It has been determined that this notice of
proposed rulemaking is not a significant
regulatory action as defined in EO 12866.
Therefore, a regulatory assessment is not
required. It also has been determined that
section 553(b) of the Administrative Pro-
cedure Act (5 U.S.C. chapter 5) does not
apply to these regulations.
It is hereby certified that these regula-
tions will not have a significant economic
impact on a substantial number of small
entities. This certification is based upon
the fact that the underlying statute applies
only to individuals. Therefore, a Regula-
tory Flexibility Analysis under the Regu-
latory Flexibility Act (5 U.S.C. chapter 6)
is not required.
Pursuant to section 7805(f) of the Inter-
nal Revenue Code, this notice of pro-
posed rulemaking will be submitted to the
Chief Counsel for Advocacy of the Small
Business Administration for comment on
its impact on small business.
Comments and public hearing
Before these proposed regulations are
adopted as final regulations, considera-
tion will be given to any written com-
ments (a signed original and eight copies)
that are submitted timely (in the manner
described in the ADDRESSES portion of
this preamble) to the IRS. All comments
will be available for public inspection and
copying.
July 20, 1998121998–29 I.R.B.

1998–29 I.R.B.13July 20, 1998
A public hearing has been scheduled
for Wednesday, October 21, 1998, at 10
a.m., in room 2615, Internal Revenue
Building, 1111 Constitution Avenue, NW,
Washington, DC. Because of access re-
strictions, visitors will not be admitted be-
yond the building lobby more than 15
minutes before the hearing starts.
The rules of §601.601(a)(3) apply to
the hearing.
Persons that have submitted written
comments by September 23, 1998, and
want to present oral comments at the
hearing must submit, not later than Sep-
tember 30, 1998, an outline of the topics
to be discussed and the time to be devoted
to each topic. A period of 10 minutes will
be allotted to each person for making
comments.
An agenda showing the scheduling of
the speakers will be prepared after the
deadline for receiving outlines has
passed. Copies of the agenda will be
available free of charge at the hearing.
Drafting Information
The principal author of these proposed
regulations is Karin Loverud, Office of
the Associate Chief Counsel (Employee
Benefits and Exempt Organizations), IRS.
However, other personnel from the IRS
and the Treasury Department participated
in their development.
*****
Proposed Amendments to the Regulations
Accordingly, 26 CFR part 1 is pro-
posed to be amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.32–3 is added to read
as follows:
§1.32–3 Eligibility Requirements.
[The text of this proposed section is the
same as the text of §1.32–3T published in
T.D. 8773.]
Michael P. Dolan,
Deputy Commissioner of
Internal Revenue.
(Filed by the Office of the Federal Register on June
25, 1998, 8:45 a.m., and published in the issue of the
Federal Register for June 25, 1998, 63 F.R. 34615)
Request for Information—New
Technologies in Retirement
Plans
Announcement 98–62
The Internal Revenue Service and the
Department of the Treasury request com-
ments from the public relating to the use
of new technologies (sometimes referred
to as “paperless” technologies) in the ad-
ministration of retirement plans. The Ser-
vice and Treasury are in the process of de-
veloping guidance relating to the use of
new technologies in communications be-
tween retirement plans and their partici-
pants. This announcement solicits com-
ments on a number of specific issues.
However, comments and suggestions
from interested parties concerning other
issues pertinent to these technologies are
also requested.
BACKGROUND
Section 1510 of the Taxpayer Relief
Act of 1997 (“TRA ’97”), Pub. L. 105–
34, provides that the Secretary of the
Treasury and the Secretary of Labor each
shall issue guidance designed to interpret
the notice, election, consent, disclosure,
and time requirements (and related
recordkeeping requirements) under the
Internal Revenue Code of 1986 and the
Employee Retirement Income Security
Act of 1974 relating to retirement plans as
applied to the use of new technologies by
plan sponsors and administrators. Section
1510 requires the guidance to maintain
the protection of the rights of participants
and beneficiaries. Section 1510 further
provides that the guidance shall clarify
the extent to which writing requirements
under the Internal Revenue Code of 1986
relating to retirement plans shall be inter-
preted to permit paperless transactions.
SPECIFIC ISSUES FOR COMMENT
The Service invites interested parties to
submit information concerning the appli-
cation of new or paperless technologies in
the administration of retirement plans and
concerning any issues that such technolo-
gies have presented for plan sponsors, ad-
ministrators, participants or beneficiaries.
Specifically, interested members of the
public are invited to describe new tech-
nologies that are commonly used in plan
administration, and to indicate the extent
to which these technologies, and the man-
ner in which they are used, adequately
protect the rights of participants and bene-
ficiaries. Commentators also are invited
to contrast characteristics and appli-
cations of technologies that adequately
protect the rights of participants and bene-
ficiaries with characteristics and appli-
cations that may not provide such pro-
tection. The Service is particularly
interested in receiving specific comments
regarding the paperless administration of
participant elections and consents, plan
notices, plan loans, and distributions.
In addition to the information requested
above, comments are specifically invited
on the following questions:
• Would it be preferable for guidance
to focus on specific uses of existing tech-
nologies or to take the form of generally
applicable principles or standards? If
commentators recommend that guidance
take the form of generally applicable prin-
ciples or standards, it is requested that the
comments identify suggested principles
or standards as specifically as possible
(including any variations appropriate for
different technologies).
• To what extent, if any, do the terms
“election” and “consent” imply a writing
or signature requirement?
• To what extent should paperless
identification mechanisms (for example, a
Personal Identification Number (“PIN”)
or password) be treated as satisfying a
legal requirement of a “writing” or a sig-
nature?
• Should the requirement to provide a
notice during a specified period (such as
the requirement to provide a § 402(f) no-
tice no less than 30 and no more than 90
days before the date of an eligible rollover
distribution) be deemed to be satisfied by
providing a written copy of a full notice
on a less frequent basis (for example,
once a year) if participants or beneficia-
ries, when initiating a transaction to
which the notice relates (such as request-
ing a distribution), are given an oral or
recorded summary of the notice and told
how to obtain a copy of the full notice?

July 20, 1998141998–29 I.R.B.
• What are the appropriate standards
for authentication, substantiation, and se-
curity in paperless plan administration
and record-keeping? For example, how
can it be established with a reasonable
level of confidence that a plan notice has
actually been received by a plan partici-
pant or beneficiary to whom the notice
has been transmitted in a paperless form?
Similarly, how can it be established that a
particular paperless transaction was en-
tered into by a particular participant?
Also, how should records of paperless
transactions be maintained by plan spon-
sors or administrators?
• What are the appropriate standards
for ensuring that participants and benefi-
ciaries have sufficient time and opportu-
nity to consider (and, if desired, obtain
advice on) all relevant options when mak-
ing significant decisions about retirement
savings? For example, should partici-
pants and beneficiaries have the right to
review and change the content of any
communication or instructions transmit-
ted in a paperless form before completion
of the transaction, and should they always
have the right to receive communications
on paper as an alternative to paperless
communications?
• What types of new or paperless tech-
nologies do plan sponsors and administra-
tors foresee using in the future? What
practical and legal issues might arise from
the use of those technologies, and how
might systems using those technologies
be designed to protect the rights of partic-
ipants and beneficiaries?
• Which issues raised by the use of
new technologies in retirement plans are
most in need of administrative guidance?
Comments received to date indicate
that the possible use of electronic tech-
nologies in the administration of the
spousal consent requirements of
§§ 401(a)(11) and 417 of the Code raises
a number of significant legal and practical
issues relating to adequate protection of
persons who are not plan participants or
current or former employees. Conse-
quently, initial guidance on new technolo-
gies is unlikely to address issues involv-
ing spousal consent. The public is
nevertheless invited to submit comments
on this topic.
ADDRESS
Written comments should be submitted
with a signed original and eight (8)
copies. All comments will be available
for public inspection and copying in their
entirety. Comments should be sent to
CC:DOM:CORP:R (OGI–106555–98),
Room 5226, Internal Revenue Service,
P.O. Box 7604, Ben Franklin Station,
Washington, DC 20044. Alternatively,
comments may be hand delivered be-
tween the hours of 8 a.m. and 5 p.m. to
CC:DOM:CORP:R, Courier’s Desk, In-
ternal Revenue Service, 1111 Constitution
Avenue, NW, Washington, DC, or may be
submitted electronically via the IRS Inter-
net site at http://www.irs.ustreas.gov/
prod/tax_regs/comments.html. To ensure
that comments are given full considera-
tion, they should be submitted by October
5, 1998.
DRAFTING INFORMATION
The principal authors of this announce-
ment are Catherine Livingston Fernandez
of the Office of the Associate Chief Coun-
sel (Employee Benefits and Exempt Or-
ganizations) and Daniel S. Evans of the
Employee Plans Division. For further in-
formation regarding this announcement,
contact the Employee Plans Division’s
telephone assistance service between 1:30
and 4:00 p.m., Eastern Time, Monday
through Thursday at (202) 622-6074/75,
or Ms. Fernandez at (202) 622-6030.
(These telephone numbers are not toll-
free).
Foundations Status of Certain
Organizations
Announcement 98–68
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 des-
ignations in the Cumulative List of Orga-
nizations (Publication 78), or on the pre-
sumption arising from the filing of notices
under section 508(b) of the Code. This
listing does notindicate that the organiza-
tions have lost their status as organiza-
tions described in section 501(c)(3), eligi-
ble to receive deductible contributions.
Former Public Charities.The following
organizations (which have been treated as
organizations that are not private founda-
tions described in section 509(a) of the
Code) are now classified as private foun-
dations:
Golden Generations Inc., Philadelphia,
PA
Good Shepherd of Colorado I, Littleton,
CO
Gower Foundation for Excellence in
Education, Burr Ridge, IL
Granada East Parent Teacher
Organization, Phoenix, AZ
Grand Rapids Emergency Assistance
Team GREAT, Grant Rapids, MI
Grass Roots Initiative for Planning &
Progress Inc., Conway, SC
Grayson County Community Housing
Resource Board Inc., Sherman, TX
Great Independence Housing Coalition,
Independence, MO
Greater Albuquerque Housing
Partnership, Albuquerque, NM
Greater Cleveland Soccer Association,
Cleveland, TN
Greater Birmingham Alabama Nawic
Scholarship Fund, Birmingham, AL
Greater First Social Ministries
Incorporated GFSMI, Beaumont, TX
Greater Kankakee Development
Foundation, Kankakee, IL
Greater Orleans Club of the National
Association of Negro, New Orleans,
LA
Greater Works Outreach Ministries Inc.,
Philadelphia, PA
Grey Wolves Rugby Club Inc., Thornton,
CO
Grief of the Washington Metropolitan
Area Inc., Alexandria, VA
Griffin Group International Inc., Mesa, AZ
Group Inc., Stuart, FL
Gunn Junior High School Band Booster
Club, Arlington, TX
Gurnee Rotary Club Charitable
Foundation, Gurnee, IL
Haddington Townhouses Resident
Association Inc., Philadelphia, PA
Halifax-Northampton Opportunity
Industrialization Center Inc., Roanoke
Rapids, NC
Hannibal Area Rapid Express Inc.,
Hannibal, MO
Harold Key Scholarship Endowment
Fund, Arlington, TX
Harvest Time Crusades Inc., Waco, TX
Haven Enterprises Inc., Wonsocket, RI
Health Education and Scholarship
Foundation, St. Louis, MO

1998–29 I.R.B.15July 20, 1998
Health Fair of Greater Kansas City Inc.,
Independence, MO
Health Opportunity Protection and
Encouragement Center Inc., Athens,
TN
Heart Body & Soul Inc., Baltimore, MD
Hearth, Chapel Hill, NC
Hellenic American National Council Inc.,
Washington, DC
Henry County Council on Child Abuse,
Stockbridge, GA
Heritage Arts Inc., Raleigh, NC
Heritage Festival, Brooklyn Center, MN
Hiram G. Andrews Parents Association
Incorporated, Johnstown, PA
Hispanic Society of Central Ohio Inc.,
Columbus, OH
Hospital Art Project Network, Inc.,
Dallas, TX
Hooves for Happiness Inc., Frostburg,
MD
Horner Association of Men, Chicago, IL
Hospice of the VNA of Greater
Philadelphia, Philadelphia, PA
Housecalls-Hospice Volunteer
Association Inc., Parkersburg, WV
Housing Applications to Social Training
Evolutions Inc., Arlington, TX
Housing Opportunity Center, Phoenix,
AZ
Howard County Hospital Foundation,
Cresco, IA
Humanitarian Aid Relief Team, Provo, UT
IGBO Foundation USA, Chicago, IL
Illinois Ethnic Coalition, Chicago, IL
Illinois Pirg Education Fund, Chicago, IL
In the Best Interest Children of Divorce,
Salt Lake City, UT
India Outreach, Elgin, IL
Indian Cultural Center Inc., Marlton, NJ
Inner-City Growth Corporation, Chicago,
IL
Institute for Innovative Interventions II
Inc., Miami Beach, FL
Interagency Council for Youth of Wake
County, Raleigh, NC
Intercounty Teach a Trade Inc., King of
Prussia, PA
International Falls Education Fund,
International Falls, MN
International Learning Center Inc.,
Bellaire, TX
International Trade Finance Society, Inc.,
Santa Rosa, CA
International Trade & Management
Institute, Philadelphia, PA
IO Association, Middletown, OH
Iowa Young Farmers National Institute
1992 Inc., Mt. Union, IA
Iowans Against the Death Penalty Fund,
West Des Moines, IA
Iowans for Safer Cities, Des Moines, IA
Irish Alliances Foundation, St. Paul, MN
Isshin Ryu Club Inc., Albuquerque, NM
J R Tucker High School Athletic Booster
Club Inc., Richmond, VA
Jane Addams Delta Development
Corporation, Chicago, IL
James D Evans & Pauline Palmer Evans
Memorial Scholarship Trust,
Stoutland, MO
Japan-America Jamboree Adventure,
Rapid City, SD
Jefferson Housing Opportunities Inc.,
Metairie, LA
Jenkins Apartments Inc., Baltimore, MD
Jennings Rotary Scholastic Fund Inc.,
Jennings, LA
Jesus Christ Prison Ministries Inc.,
Saginaw, MI
Jewish Repertory Theatre Company,
Bethesda, MD
Johnny Gray Jones Youth Shelter,
Boosier City, LA
Johnson City Historic Preservation
Society Inc., Johnson City, TN
Just In Time Builders, Inc., Pepper Pike,
OH
Just Us for Youth, Chicago, IL
Juvenile Justice Center Inc., Tallahassee,
FL
Kansas Association of Directors of Plant
Facilities Scholarship, Leavenworth,
KS
Kansas Multi-Cultural Arts Alliance Inc.,
Wichita, KS
KDK Private Industry Council Inc.,
Batavia, IL
Kelly Home of Iredell County Inc.,
Raleigh, NC
Kemper Hall Alumnae Association Inc.,
Gurnee, IL
Kensington Academy Foundation,
Birmingham, MI
Kentucky Experimental Program to
Simulate Competitive Research,
Lexington, KY
Keroglu Association Inc., Boonton, NJ
Keshet of Michigan-Jewish Families of
Children With Special Needs, Oak
Park, MI
Kidsburgh Press, Pittsburgh, PA
Kidslife Resources, Mount Laurel, NJ
Kittrell School Scholarship Fund Inc.,
Readyville, TN
Knox Co Task Force Against Violence
Inc. Harbor House, Vincennes, IN
Koo-Koo News Foundation, Strasburg,
VA
KPMG Peat Marwick Disaster Relief
Fund, Montvale, NJ
Kyrene de la Colina School P T O,
Phoenix, AZ
La Palomas, Inc., Loveland, CO
Laikos Ministries Inc., Hague, VA
Lamar County Activity Center Inc.,
Barnesville, GA
Lancaster Heart Foundation, Lancaster,
PA
Landmark Court Inc., Pittsburgh, PA
Leavenworth County Youth Soccer
Association, Levenworth, KS
Leora Brown School Inc., Corydon, IN
Liberty High School Alumni Scholarship
Fund Inc., Williamson, WV
Life Directions USA, Chicago, IL
Lifeskills Education to Empower People
Inc., Paducah, KY
Lillian Holliday Residence, Philadelphia,
PA
Lincoln High School Band Boosters,
Des Moines, IA
Literacy Alliance Memphis-Shelby
County, Memphis, TN
Louisiana-Mississippi Infectious
Diseases Society, New Orleans, LA
Love and Care Center Inc., San Antonio,
TX
Luce County Non-Profit Housing
Commission, Newberry, MI
Ludlow Youth Community Center,
Philadelphia, PA
M Span, St. Paul, MN
MacArthur Avenue Players, Dillon, SC
Madison Basketball Association,
Phoenix, AZ
Mahlon and Millcreek Corporation,
Philadelphia, PA
Mainstreet Springfield—Robertson
County, Springfield, TN
Mapleview Inc., Carmel, IN
Marianna High School Foundation Inc.,
Marianna, FL
Marshall Junior Olympic Volleyball,
Marshall, MN
Mattawan Public Education Foundation,
Mattawan, MI
Matter of Life Consortium Inc.,
Pinehurst, NC
Mature Resources Foundation, Clearfield,
PA
Maxwell Parent Teacher Organization,
Greensburg, PA
Mayors Literacy Commission Stark
County Dist Library, Canton, OH

McDowell County Citizens Conservation
Corps Inc., Welch, WV
Medford Educational Institute Inc.,
Medford, OR
Mediation Center for Central Virginia
Incorporated, Lynchburg, VA
Memorial Hospital Southeast Auxiliary,
Houston, TX
Memorial Hospital Southwest Auxiliary,
Houston, TX
Memphis and Shelby County Adolescent
Pregnancy Council, Memphis, TN
Memphis State Swimming Inc.,
Memphis, TN
Menasha Wisconsin Rotary Foundation
Inc., Menasha, WI
Metanoia Mentor Group, Blue Springs,
MO
Metro East Area Project Board,
E. St. Louis, IL
Metroplex Association of Teachers of
Elementary Science, Arlington, TX
Michigan Pharmacists Association,
Lansing, MI
Mid-County Educational Foundation,
Varna, IL
Midnet Inc., Lincoln, NE
Midpark High School Foundation,
Middleburg Heights, OH
Midwest Safety and Health Association,
St. Paul, MN
Mike Begeny Memorial Scholarship
Fund, Westerville, OH
Mindmenders Foundation Inc., Naples,
FL
Ministers Training Center, Richmond, VA
Minnesota Project for Contemporary
Language Arts, St. Paul, MN
Minnesota Safety and Health Foundation,
St. Paul, MN
Minority Health Coalition of
Vanderburgh County, Evansville, IN
Monte Carlo Outreach Facility Vaughn
Green, New Orleans, LA
Morehouse College Alumni Chapter of
Palm Beach County Florida Inc.,
West Palm Beach, FL
Morgan County Academic Booster Club,
Madison, GA
Morningstars Development Company,
Inc., Kansas City, MO
Mountain College Library Network Inc.,
Swannanoa, NC
Mri Mobile Services of West Michigan,
Grand Rapids, MI
Multiple Sclerosis Fight Against
Demyelinnating Diseases, Inc.,
San Antonio, TX
Museo Chicano Inc., Phoenix, AZ
Music in Common Inc., Columbia, MD
Mustangs Athletic Booster Club Inc.,
Parker, CO
Nancy Davis Foundation for Multiple
Sclerosis, Aspen, CO
Nannie Berry Elementary Parent Teacher
Org PTO Hendersonville TN,
Hendersonville, TN
Nashville Mens Chorus, Nashville, TN
National African-American Club,
Philadelphia, PA
National Assoc. of Secretaries of State,
Lexington, KY
National Association of Head Start
Alumni Chapters Inc., Indianapolis, IN
National Association of State Personnel
Executives Inc., Lexington, KY
National Douglass Alumni Corporation,
Memphis, TN
Native American War Dead Memorial,
Lander, WY
NDC Center for Affordable Solutions in
Housing of Tampa Inc., Bethesda,
MD
Nebraska Friends of Foster Children
Foundation, Lincoln, NE
Neighborhood Educational Training
Services, Toledo, OH
Neighbors Helping Neighbors, Canton,
OH
Net Illinois Inc., Ann Arbor, MI
New Afrikan Writers Workshop, Omaha,
NE
New Beginnings Youth Center Inc.,
Des Moines, IA
New Generations Youth Club Inc.,
Ann Arbor, MI
New Haven Band Boosters Inc., New
Haven, IN
New Hope Ministries Inc., Falls Church,
VA
New Jersey Dare Drug Abuse Resistance
Education Officers, Totowa, NJ
Newton Community Center a New Jersey
Non-Profit Corporation, Camden, NJ
NIH Recreation & Welfare Foundation
Inc., Bethesda, MD
Ninth Judicial District Family and
Childrens Court Services Inc., Clovis,
NM
No Needles in the Trash Foundation Inc.,
Parkersburg, WV
North East Gifted and Talented Education
Association, San Antonio, TX
North Eastern Community Services Inc.,
Las Vegas, NM
North Georgia Heritage Association Inc.,
Jasper, GA
North Museum Corporation, Lancaster,
PA
North Surburban Parochial School
League, Robbinsdale, MN
North Texas Estate and Financial Planning
Council Inc., Wichita Falls, TX
North Texas Free-Net Incorporated,
Dallas, TX
Northeastern Action Wildlife Club Inc.,
Roanoke Rapids, NC
Northeastern Network Inc., Wilkes Barre,
PA
Northern Ireland Human Rights
Commission Inc., Washington, DC
Northern Pocahontas Health Clinic Inc.,
Durbin, WV
Northside Athletic Association, Huber
Heights, OH
Northwest Delta Choral and Arts Council
Inc., Batesville, MS
Northwest Louisiana Youth Services,
Shreveport, LA
Novel Stages Theater Company Inc.,
Philadelphia, PA
Nursing Center at Oak Summit, Winston-
Salem, NC
Oakland Education Foundation, Oakland,
NJ
If an organization listed above submits
information that warrants the renewal of
its classification as a public charity or as a
private operating foundation, the Internal
Revenue Service will issue a ruling or de-
termination letter with the revised classi-
fication as to foundation status. Grantors
and contributors may thereafter rely upon
such ruling or determination letter as pro-
vided in section 1.509(a)–7 of the Income
Tax Regulations. It is not the practice of
the Service to announce such revised clas-
sification of foundation status in the Inter-
nal Revenue Bulletin.
July 20, 1998161998–29 I.R.B.

1998–29 I.R.B.17July 20, 1998
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 pub-
lished 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 confu-
sion. It is not used where a position in a
prior ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously
published ruling and points out an essen-
tial difference between them.
Modified is used where the substance
of a previously published position is
being changed. Thus, if a prior ruling
held that a principle applied to A but not
to B, and the new ruling holds that it ap-
plies to both A and B, the prior ruling is
modified because it corrects a published
position. (Compare with amplified and
clarified, above).
Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. 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 sub-
stance has been included in regulations
subsequently adopted.
Revoked describes situations where the
position in the previously published rul-
ing 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 pe-
riod 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 pub-
lished 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 super-
seded.
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 pub-
lished 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
The following abbreviations in current use and for-
merly 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.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contribution Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign Corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statements of Procedral Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.
Definition of Terms

July 20, 1998181998–29 I.R.B.
1
See footnote at end of list.
Numerical Finding List
1
Bulletins 1998–1 through 1998–28
Announcements:
98–1, 1998–2 I.R.B. 38
98–2, 1998–2 I.R.B.38
98–3, 1998–2 I.R.B.38
98–4, 1998–4 I.R.B.31
98–5, 1998–5 I.R.B. 25
98–6, 1998–5 I.R.B. 25
98–7, 1998–5 I.R.B. 26
98–8, 1998–6 I.R.B. 96
98–9, 1998–7 I.R.B. 35
98–10, 1998–7 I.R.B. 35
98–11, 1998–8 I.R.B. 42
98–12, 1998–8 I.R.B. 43
98–13, 1998–8 I.R.B. 43
98–14, 1998–8 I.R.B. 44
98–15, 1998–10 I.R.B.36
98–16, 1998–9 I.R.B. 17
98–17, 1998–9 I.R.B. 16
98–18, 1998–10 I.R.B.44
98–19, 1998–10 I.R.B.44
98–20, 1998–11 I.R.B. 25
98–21, 1998–11 I.R.B. 26
98–22, 1998–12 I.R.B. 33
98–23, 1998–12 I.R.B. 34
98–24, 1998–12 I.R.B. 35
98–25, 1998–13 I.R.B.43
98–26, 1998–14 I.R.B. 28
98–27, 1998–15 I.R.B. 30
98–28, 1998–15 I.R.B. 30
98–29, 1998–16 I.R.B. 48
98–30, 1998–17 I.R.B. 38
98–32, 1998–17 I.R.B. 39
98–33, 1998–17 I.R.B. 39
98–34, 1998–17 I.R.B. 39
98–35, 1998–17 I.R.B. 40
98–36, 1998–18 I.R.B. 18
98–37, 1998–19 I.R.B. 24
98–38, 1998–19 I.R.B. 26
98–39, 1998–20 I.R.B.24
98–40, 1998–20 I.R.B. 24
98–41, 1998–20 I.R.B. 25
98–42, 1998–21 I.R.B. 26
98–43, 1998–21 I.R.B. 26
98–44, 1998–22 I.R.B. 24
98–45, 1998–23 I.R.B. 18
98–46, 1998–25 I.R.B. 11
98–47, 1998–23 I.R.B. 5
98–48, 1998–24 I.R.B. 6
98–49, 1998–23 I.R.B. 19
98–50, 1998–23 I.R.B. 20
98–51, 1998–24 I.R.B.7
98–52, 1998–24 I.R.B. 37
98–53, 1998–24 I.R.B. 37
98–54, 1998–25 I.R.B.11
98–55, 1998–26 I.R.B.41
98–56, 1998–26 I.R.B.44
98–57, 1998–28 I.R.B. 11
98–58, 1998–28 I.R.B. 12
98–59, 1998–28 I.R.B. 12
98–60, 1998–27 I.R.B.39
98–61, 1998–27 I.R.B. 38
98–63, 1998–28 I.R.B. 12
98–64, 1998–28 I.R.B. 14
98–65, 1998–28 I.R.B. 14
98–66, 1998–28 I.R.B. 15
98–67, 1998–28 I.R.B. 15
Notices:
98–1, 1998–3 I.R.B. 42
98–2, 1998–2 I.R.B. 22
Notices—Continued
98–3, 1998–3 I.R.B. 48
98–4, 1998–2 I.R.B. 25
98–5, 1998–3 I.B.R.49
98–6, 1998–3 I.R.B. 52
98–7, 1998–3 I.R.B. 54
98–8, 1998–4 I.R.B. 6
98–9, 1998–4 I.R.B. 8
98–10, 1998–6 I.R.B.9
98–11, 1998–6 I.R.B. 18
98–12, 1998–5 I.R.B.12
98–13, 1998–6 I.R.B.19
98–14, 1998–8 I.R.B. 27
98–15, 1998–9 I.R.B. 8
98–16, 1998–15 I.R.B. 12
98–17, 1998–11 I.R.B. 6
98–18, 1998–12 I.R.B. 11
98–19, 1998–13 I.R.B.24
98–20, 1998–13 I.R.B.25
98–21, 1998–15 I.R.B. 14
98–22, 1998–17 I.R.B. 5
98–23, 1998–18 I.R.B. 9
98–24, 1998–17 I.R.B. 5
98–25, 1998–18 I.R.B. 11
98–26, 1998–18 I.R.B. 14
98–27, 1998–18 I.R.B. 14
98–28, 1998–19 I.R.B.7
98–29, 1998–22 I.R.B.8
98–30, 1998–22 I.R.B. 9
98–31, 1998–22 I.R.B. 10
98–32, 1998–22 I.R.B. 23
98–33, 1998–25 I.R.B. 10
98–34, 1998–27 I.R.B. 30
98–35, 1998–27 I.R.B. 35
Proposed Regulations:
PS–158–86, 1998–11 I.R.B. 13
REG–100841–97, 1998–8 I.R.B. 30
REG–102144–98, 1998–15 I.R.B.25
REG–102894–97, 1998–3 I.R.B. 59
REG–104062–97, 1998–10 I.R.B. 34
REG–104537–97, 1998–16 I.R.B. 21
REG–104691–97, 1998–11 I.R.B. 13
REG–105163–97, 1998–8 I.R.B. 31
REG–106031–98, 1998–26 I.R.B. xx
REG–109333–97, 1998–9 I.R.B. 9
REG–109704–97, 1998–3 I.R.B. 60
REG–110965–97, 1998–13 I.R.B. 42
REG–115795–97, 1998–8 I.R.B.33
REG–119449–97, 1998–10 I.R.B. 35
REG–120200–97, 1998–12 I.R.B. 32
REG–120882–97, 1998–14 I.R.B. 25
REG–121268–97, 1998–20 I.R.B. 12
REG–121755–97, 1998–9 I.R.B. 13
REG–208299–90, 1998–16 I.R.B. 26
REG–209276–87, 1998–11 I.R.B. 18
REG–209322–82, 1998–15 I.R.B. 26
REG–209373–81, 1998–14 I.R.B. 26
REG–209463–82, 1998–4 I.R.B. 27
REG–209476–82, 1998–8 I.R.B. 36
REG–209484–87, 1998–8 I.R.B.40
REG–209485–86, 1998–11 I.R.B. 21
REG–209682–94, 1998–17 I.R.B. 20
REG–209807–95, 1998–8 I.R.B. 40
REG–243025–96, 1998–18 I.R.B. 18
REG–251502–96, 1998–9 I.R.B. 14
REG–251698–96, 1998–20 I.R.B. 14
Revenue Procedures:
98–1, 1998–1 I.R.B. 7
98–2, 1998–1 I.R.B. 74
98–3, 1998–1 I.R.B. 100
Revenue Procedures—Continued
98–4, 1998–1 I.R.B. 113
98–5, 1998–1 I.R.B. 155
98–6, 1998–1 I.R.B. 183
98–7, 1998–1 I.R.B. 222
98–8, 1998–1 I.R.B. 225
98–9, 1998–3 I.R.B. 56
98–10, 1998–2 I.R.B. 35
98–11, 1998–4 I.R.B.9
98–12, 1998–4 I.R.B. 18
98–13, 1998–4 I.R.B. 21
98–14, 1998–4 I.R.B. 22
98–15, 1998–4 I.R.B. 25
98–16, 1998–5 I.R.B. 19
98–17, 1998–5 I.R.B. 21
98–18, 1998–6 I.R.B. 20
98–19, 1998–7 I.R.B. 30
98–20, 1998–7 I.R.B. 32
98–21, 1998–8 I.R.B. 27
98–22, 1998–12 I.R.B. 11
98–23, 1998–10 I.R.B. 30
98–24, 1998–10 I.R.B. 31
98–25, 1998–11 I.R.B. 7
98–26, 1998–13 I.R.B.26
98–27, 1998–15 I.R.B.15
98–28, 1998–15 I.R.B.14
98–29, 1998–15 I.R.B. 22
98–30, 1998–17 I.R.B. 6
98–31, 1998–23 I.R.B. 9
98–32, 1998–17 I.R.B. 11
98–33, 1998–19 I.R.B. 7
98–34, 1998–18 I.R.B. 15
98–35, 1998–21 I.R.B. 6
98–36, 1998–23 I.R.B. 10
98–37, 1998–26 I.R.B.6
98–38, 1998–27 I.R.B.29
98–39, 1998–26 I.R.B.36
98–42, 1998–28 I.R.B.9
Revenue Rulings:
98–1, 1998–2 I.R.B. 5
98–2, 1998–2 I.R.B. 15
98–3, 1998–2 I.R.B. 4
98–4, 1998–2 I.R.B. 18
98–5, 1998–2 I.R.B. 20
98–6, 1998–4 I.R.B. 4
98–7, 1998–6 I.R.B.6
98–8, 1998–7 I.R.B. 24
98–9, 1998–6 I.R.B. 5
98–10, 1998–10 I.R.B. 11
98–11, 1998–10 I.R.B. 13
98–12, 1998–10 I.R.B. 5
98–13, 1998–11 I.R.B. 4
98–14, 1998–11 I.R.B. 4
98–15, 1998–12 I.R.B. 6
98–16, 1998–13 I.R.B. 18
98–17, 1998–13 I.R.B. 21
98–18, 1998–14 I.R.B. 22
98–19, 1998–15 I.R.B. 5
98–20, 1998–15 I.R.B. 8
98–21, 1998–18 I.R.B. 7
98–22, 1998–19 I.R.B.5
98–23, 1998–18 I.R.B. 5
98–24, 1998–19 I.R.B. 6
98–25, 1998–19 I.R.B.4
98–26, 1998–21 I.R.B. 4
98–27, 1998–22 I.R.B. 4
98–28, 1998–22 I.R.B. 5
98–29, 1998–24 I.R.B.4
98–30, 1998–25 I.R.B.8
98–31, 1998–25 I.R.B. 4
98–32, 1998–25 I.R.B. 4

1998–29 I.R.B.19July 20, 1998
Numerical Finding List—Continued
Bulletins 1998–1 through 1998–28
Revenue Rulings—Continued
98–33, 1998–27 I.R.B.26
Treasury Decisions:
8740, 1998–3 I.R.B. 4
8741, 1998–3 I.R.B. 6
8742, 1998–5 I.R.B.4
8743, 1998–7 I.R.B. 26
8744, 1998–7 I.R.B. 20
8745, 1998–7 I.R.B. 15
8746, 1998–7 I.R.B. 4
8747, 1998–7 I.R.B. 18
8748, 1998–8 I.R.B. 24
8749, 1998–7 I.R.B. 16
8750, 1998–8 I.R.B. 4
8751, 1998–10 I.R.B. 23
8752, 1998–9 I.R.B. 4
8753, 1998–9 I.R.B. 6
8754, 1998–10 I.R.B. 15
8755, 1998–10 I.R.B. 21
8756, 1998–12 I.R.B.4
8757, 1998–13 I.R.B.4
8758, 1998–13 I.R.B. 15
8759, 1998–13 I.R.B. 19
8760, 1998–14 I.R.B. 4
8761, 1998–14 I.R.B. 13
8762, 1998–14 I.R.B. 15
8763, 1998–15 I.R.B. 5
8764, 1998–15 I.R.B. 9
8765, 1998–16 I.R.B. 11
8766, 1998–16 I.R.B. 17
8767, 1998–16 I.R.B. 4
8768, 1998–20 I.R.B.4
8769, 1998–28 I.R.B.4
8770, 1998–27 I.R.B.4
1
A cumulative list of all revenue rulings, revenue
procedures, Treasury decisions, etc., published in
Internal Revenue Bulletins 1997–27 through
1997–52 will be found in Internal Revenue Bulletin
1998–1, dated January 5, 1998.

July 20, 1998201998–29 I.R.B.
Finding List of Current Action on
Previously Published Items
1
Bulletins 1998–1 through 1998–28
Revenue Procedures:
91–59
Updated and superseded by
98–25, 1998–11 I.R.B. 7
94–16
Modified and superseded by
98–22, 1998–12 I.R.B. 11
93–62
Modified and superseded by
98–22, 1998–12 I.R.B. 11
95–35
95–35A
Superseded by
98–19, 1998–7 I.R.B. 30
96–29
Modified and superseded by
98–22, 1998–12 I.R.B. 11
97–1
Superseded by
98–1, 1998–1 I.R.B. 7
97–2
Superseded by
98–2, 1998–1 I.R.B. 74
97–3
Superseded by
98–3, 1998–1 I.R.B. 100
97–4
Superseded by
98–4, 1998–1 I.R.B. 113
97–5
Superseded by
98–5, 1998–1 I.R.B. 155
97–6
Superseded by
98–6, 1998–1 I.R.B. 183
97–7
Superseded by
98–7, 1998–1 I.R.B. 222
97–8
Superseded by
98–8, 1998–1 I.R.B. 225
97–21
Superseded by
98–2, 1998–1 I.R.B. 74
97–24
97–24A
Superseded by
98–33, 1998–19 I.R.B. 7
97–26
Obsoleted by
98–28, 1998–15 I.R.B. 14
97–28
Superseded by
98–36, 1998–23 I.R.B. 10
97–32
Superseded by
98–37, 1998–26 I.R.B. 6
Revenue Procedures—Continued
97–34
Superseded by
98–35, 1998–21 I.R.B. 6
97–35
Modified by
98–39, 1998–26 I.R.B. xx
97–53
Superseded by
98–3, 1998–1 I.R.B. 100
Revenue Rulings:
68–352
Obsoleted by
98–24, 1998–19 I.R.B. 6
70–225
Modified by
98–27, 1998–22 I.R.B. 4
73–198
Modified by
98–24, 1998–19 I.R.B. 6
75–17
Supplemented and superseded by
98–5, 1998–2 I.R.B. 20
75–406
Obsoleted by
98–27, 1998–22 I.R.B. 4
92–19
Supplemented in part by
98–2, 1998–2 I.R.B. 15
96–30
Obsoleted by
98–27, 1998–22 I.R.B. 4
1
A cumulative finding list for previously published
items mentioned in Internal Revenue Bulletins
1997–27 through 1997–52 will be found in Internal
Revenue Bulletin 1998–1, dated January 5, 1998.

1998–29 I.R.B.21July 20, 1998
Notes

Notes
July 20, 1998221998–29 I.R.B.

INTERNAL REVENUE BULLETIN
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