Internal Revenue Bulletin 2003-18 (PDF rendition): IRS Revenue Rulings

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.

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. 2003–44, page 848.
Low-income housing credit; satisfactory bond; “bond fac-
tor” amounts for the period April through June 2003.This
ruling announces the monthly bond factor amounts to be used
by taxpayers who dispose of qualified low-income buildings or in-
terests therein during the period April through June 2003.
Notice 2003–22, page 851.
This notice addresses an abusive arrangement designed to cir-
cumvent longstanding tax principles and enable the evasion of
income and employment taxes on compensation income through
the use of unrelated conduit domestic and foreign employee leas-
ing companies.
EMPLOYEE PLANS
Notice 2003–24, page 853.
Collectively-bargained welfare plans; section 419A(f)(5);
listed transactions.This notice describes certain abusive situ-
ations that may arise where a trust arrangement seeks to qualify
for the exception for collectively-bargained welfare benefit plans
under section 419A(f)(5) of the Code. The notice states that the
Service invites comments on the issue and that certain of the ar-
rangements are listed transactions.
EXEMPT ORGANIZATIONS
Announcement 2003–26, page 862.
Clinica Materno Infantil Plaza 3030, Inc., of Hollywood, Florida
no longer qualifies as an organization to which contributions are
deductible under section 170 of the Code.
EMPLOYMENT TAX
Notice 2003–22, page 851.
This notice addresses an abusive arrangement designed to cir-
cumvent longstanding tax principles and enable the evasion of
income and employment taxes on compensation income through
the use of unrelated conduit domestic and foreign employee leas-
ing companies.
ADMINISTRATIVE
Rev. Rul. 2003–36, page 849.
Executors, relief from joint and several liability.This rul-
ing provides for an executor (including any other duly appointed
representative) to pursue an existing request for relief from joint
and several liability or file a request for relief on behalf of a de-
cedent. Section 6903 of the Code provides that any person act-
ing for another person in a fiduciary capacity assumes the rights
of that person. This ruling concludes that the authority granted
to fiduciaries in section 6903 includes the authority for an ex-
ecutor (including any other duly appointed representative) to seek
relief pursuant to section 6015.
(Continued on the next page)
Bulletin No. 2003–18
May 5, 2003
Actions Relating to Court Decisions is on the page following the Introduction.
Announcements of Declaratory Judgment Proceedings Under Section 7428 begin on page 862.
Finding Lists begins on page ii.
Index for January through April begins on page v.

Notice 2003–25, page 855.
Canadian retirement plan trust reporting.Extension of time
to file 2002 Forms 3520 and 3520–A with respect to certain Ca-
nadian retirement plans and suspension of requirement to file
Form 3520–A with respect to certain Canadian retirement plans
for which an election has been made under Rev. Proc. 2002–
23.
Notice 2003–26, page 855.
Public comments are requested for items that should be in-
cluded on the 2003–2004 Guidance Priority List. Taxpayers may
submit recommendations at any time during the year. All rec-
ommendations received by May 15, 2003, will be reviewed for
possible inclusion on the original 2003–2004 Guidance Prior-
ity List. Recommendations received after May 15, 2003, will be
reviewed for inclusion in the quarterly updates if received by Au-
gust 31, 2003; November 30, 2003; or February 28, 2004, re-
spectively.
Rev. Proc. 2003–34, page 856.
Changes in accounting periods; approval.Procedures are
provided modifying the term and condition for the Commission-
er’s approval to change an annual accounting period under which
the taxpayer generally is precluded from carrying back a net op-
erating loss or capital loss generated in the short taxable year.
Rev. Procs. 2002–37 and 2002–39 modified.
Rev. Proc. 2003–36, page 859.
This document provides guidance to business taxpayers, indus-
try associations, and other interested parties to submit issues
for consideration under the Service’s Industry Issue Resolution
(IIR) Program. The objective of the IIR Program is to identify fre-
quently disputed or burdensome tax issues that are common to
a significant number of business taxpayers that may be re-
solved through published or other administrative guidance. No-
tice 2002–20 superseded.
May 5, 20032003–18 I.R.B.

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 rul-
ings and procedures of the Internal Revenue Service and for pub-
lishing Treasury Decisions, Executive Orders, Tax Conventions,
legislation, court decisions, and other items of general inter-
est. It is published weekly and may be obtained from the Super-
intendent 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 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 pub-
lished rulings apply retroactively unless otherwise indicated. Pro-
cedures relating solely to matters of internal management are
not published; however, statements of internal practices and pro-
cedures that affect the rights and duties of taxpayers are pub-
lished.
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 taxpay-
ers or technical advice to Service field offices, identifying de-
tails 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 re-
lied on, used, or cited as precedents by Service personnel in the
disposition of other cases. In applying published rulings and pro-
cedures, the effect of subsequent legislation, regulations, court
decisions, rulings, and procedures must be considered, and Ser-
vice personnel and others concerned are cautioned against reach-
ing 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, Legisla-
tion and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these sub-
jects are contained in the other Parts and Subparts. Also in-
cluded in this part are Bank Secrecy Act Administrative Rulings.
Bank Secrecy Act Administrative Rulings are issued by the De-
partment of the Treasury’s Office of the Assistant Secretary (En-
forcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment 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 pe-
riod, 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.
2003–18 I.R.B.May 5, 2003

Actions Relating to Decisions of the Tax Court
It is the policy of the Internal Revenue
Service to announce at an early date
whether it will follow the holdings in cer-
tain cases. An Action on Decision is the
document making such an announcement.
An Action on Decision will be issued at the
discretion of the Service only on unap-
pealed issues decided adverse to the gov-
ernment. Generally, an Action on Decision
is issued where its guidance would be help-
ful to Service personnel working with the
same or similar issues. Unlike a Treasury
Regulation or a Revenue Ruling, an Ac-
tion on Decision is not an affirmative state-
ment of Service position. It is not intended
to serve as public guidance and may not be
cited as precedent.
Actions on Decisions shall be relied
upon within the Service only as conclu-
sions applying the law to the facts in the
particular case at the time the Action on De-
cision was issued. Caution should be ex-
ercised in extending the recommendation of
the Action on Decision to similar cases
where the facts are different. Moreover, the
recommendation in the Action on Deci-
sion may be superseded by new legisla-
tion, regulations, rulings, cases, or Actions
on Decisions.
Prior to 1991, the Service published ac-
quiescence or nonacquiescence only in cer-
tain regular Tax Court opinions. The Service
has expanded its acquiescence program to
include other civil tax cases where guid-
ance is determined to be helpful. Accord-
ingly, the Service now may acquiesce or
nonacquiesce in the holdings of memoran-
dum Tax Court opinions, as well as those
of the United States District Courts, Claims
Court, and Circuit Courts of Appeal. Re-
gardless of the court deciding the case, the
recommendation of any Action on Deci-
sion will be published in the Internal Rev-
enue Bulletin.
The recommendation in every Action on
Decision will be summarized as acquies-
cence, acquiescence in result only, or non-
acquiescence. Both “acquiescence” and
“acquiescence in result only” mean that the
Service accepts the holding of the court in
a case and that the Service will follow it
in disposing of cases with the same con-
trolling facts. However, “acquiescence” in-
dicates neither approval nor disapproval of
the reasons assigned by the court for its
conclusions; whereas, “acquiescence in re-
sult only” indicates disagreement or con-
cern with some or all of those reasons.
“Nonacquiescence” signifies that, although
no further review was sought, the Service
does not agree with the holding of the court
and, generally, will not follow the deci-
sion in disposing of cases involving other
taxpayers. In reference to an opinion of a
circuit court of appeals, a “nonacquies-
cence” indicates that the Service will not
follow the holding on a nationwide basis.
However, the Service will recognize the pre-
cedential impact of the opinion on cases
arising within the venue of the deciding cir-
cuit.
The Actions on Decisions published in
the weekly Internal Revenue Bulletin are
consolidated semiannually and appear in the
first Bulletin for July and the Cumulative
Bulletin for the first half of the year. A semi-
annual consolidation also appears in the first
Bulletin for the following January and in
the Cumulative Bulletin for the last half of
the year.
TheCommissionerdoesNOT
ACQUIESCE in the following decision:
Internet Corporation & Subs.
v. Commissioner,
1
Docket No. 8246–97
117 T.C. 133 (filed Oct. 2, 2001)
February 4, 2002
1
Nonacquiescence in part (prior acquiescence in result, hereby revoked) relating to whether deductions for state income tax deficiencies and interest thereon as well as interest on federal
income tax deficiencies, all attributable to tax liabilities arising at least three years before the beginning of the taxable year, and taken into account in computing a net operating loss, qualify
for a ten-year carryback as specified liability losses under former I.R.C. section 172(f)(1)(B).
May 5, 20032003–18 I.R.B.

Part I. Rulings and Decisions Under the Internal Revenue Code of 1986
Section 42.—Low-Income
Housing Credit
Low-income housing credit; satisfac-
tory bond; “bond factor” amounts for the
period April through June 2003.This rul-
ing announces the monthly bond factor
amounts to be used by taxpayers who dis-
pose of qualified low-income buildings or
interests therein during the period April
through June 2003.
Rev. Rul. 2003–44
In Rev. Rul. 90–60, 1990–2 C.B. 3, the
Internal Revenue Service provided guid-
ance to taxpayers concerning the general
methodology used by the Treasury Depart-
ment in computing the bond factor amounts
used in calculating the amount of bond con-
sidered satisfactory by the Secretary un-
der§42(j)(6) of the Internal Revenue Code.
It further announced that the Secretary
would publish in the Internal Revenue Bul-
letin a table of bond factor amounts for dis-
positions occurring during each calendar
month.
Rev. Proc. 99–11, 1999–1 C.B. 275, es-
tablished a collateral program as an alter-
native to providing a surety bond for
taxpayers to avoid or defer recapture of the
low-income housing tax credits under
§42(j)(6). Under this program, taxpayers
may establish a Treasury Direct Account
and pledge certain United States Treasury
securities to the Internal Revenue Service
as security.
This revenue ruling provides in Table 1
the bond factor amounts for calculating the
amount of bond considered satisfactory un-
der§42(j)(6) or the amount of United
States Treasury securities to pledge in a
Treasury Direct Account under Rev. Proc.
99–11 for dispositions of qualified low-
income buildings or interests therein dur-
ing the period April through June 2003.
Table 1
Rev. Rul. 2003–44
Monthly Bond Factor Amounts for Dispositions Expressed
As a Percentage of Total Credits
Calendar Year Building Placed in Service
or, if Section 42(f)(1) Election Was Made,
the Succeeding Calendar Year
Month of
Disposition
19891990199119921993199419951996199719981999
Apr’0316.2330.0441.8351.9360.5059.7959.6859.6859.7559.9660.20
May’0316.2330.0441.8351.9360.5059.6559.5459.5459.6159.8360.07
Jun’0316.2330.0441.8351.9360.5059.5159.4059.4059.4859.7059.95
Table 1 (cont’d)
Rev. Rul. 2003–44
Monthly Bond Factor Amounts for Dispositions Expressed
As a Percentage of Total Credits
Calendar Year Building Placed in Service
or, if Section 42(f)(1) Election Was Made,
the Succeeding Calendar Year
Month of
Disposition
2000200120022003
Apr’0360.4961.1562.0662.68
May’0360.3761.0461.9662.68
Jun’0360.2660.9361.8662.68
2003–18 I.R.B.848May 5, 2003

For a list of bond factor amounts appli-
cable to dispositions occurring during other
calendar years, see: Rev. Rul. 98–3, 1998–1
C.B. 248; Rev. Rul. 2001–2, 2001–1 C.B.
255; Rev. Rul. 2001–53, 2001–2 C.B. 488;
and Rev. Rul. 2002–72, 2002–44 I.R.B. 759.
For dispositions occurring during the pe-
riod January through March 2003, see Rev.
Rul. 2003–22, 2003–8 I.R.B. 494.
DRAFTING INFORMATION
The principal author of this revenue rul-
ing is Gregory N. Doran of the Office of
Associate Chief Counsel (Passthroughs and
Special Industries). For further informa-
tion regarding this revenue ruling, con-
tact Mr. Doran at (202) 622–3040 (not a
toll-free call).
Section442.—Change of
Annual Accounting Period
26 CFR 1.442–1: Change of annual accounting
period.
Procedures are provided modifying the term
and condition for the Commissioner’s approval to
change an annual accounting period under which
the taxpayer generally is precluded from carrying
back a net operating loss or capital loss generated
in the short taxable year. See Rev. Proc. 2003–34,
page 856.
Section 6015.—Relief From
Joint and Several Liability on
a Joint Return
26 CFR 1.6015–5: Relief from joint and several
liability. Time and manner for requesting relief.
Executors, relief from joint and sev-
eral liability.This ruling provides for an
executor (including any other duly ap-
pointed representative) to pursue an exist-
ing request for relief from joint and several
liability or file a request for relief on be-
half of a decedent. Section 6903 of the
Code provides that any person acting for
another person in a fiduciary capacity as-
sumes the rights of that person. This rul-
ing concludes that the authority granted to
fiduciaries in section 6903 includes the au-
thority for an executor (including any other
duly appointed representative) to seek re-
lief pursuant to section 6015 of the Code.
Rev. Rul. 2003–36
ISSUES
1. Whether an executor (including any
other duly appointed representative) of a de-
cedent’s estate may pursue a request for re-
lief from joint and several liability under
section 6015 of the Internal Revenue Code
made during the decedent’s lifetime?
2. Whether an executor of a decedent’s
estate may file a section 6015 request for
relief from joint and several liability on be-
half of the decedent?
FACTS
Situation 1. W and H were married. For
taxable year 2000, W and H claimed de-
ductions on their joint income tax return re-
lating to an investment owned entirely by
H. In 2002, the Internal Revenue Service
proposed to disallow the deductions and
make adjustments to the joint return for tax-
able year 2000. W then filed a Form 8857,
“Request for Innocent Spouse Relief,”elect-
ing to seek relief under section 6015(b) and
(c) or, alternatively, seeking equitable re-
lief under section 6015(f). W died while the
request for relief from joint and several li-
ability was pending. The executor of W’s
estate pursued the request for relief from
joint and several liability that W made dur-
ing her lifetime.
Situation 2. W and H were married. For
taxable year 2000, W and H claimed de-
ductions on their joint return relating to an
investment owned entirely by H. In 2001,
the Service proposed to disallow the de-
ductions and make adjustments to the joint
return for taxable year 2000. W died in
2002, and later that year W’s executor filed
a Form 8857,“Request for Innocent Spouse
Relief,”electing to seek relief under sec-
tion 6015.
LAW AND ANALYSIS
Section 6013(a) allows a husband and
wife to elect to make a joint income tax re-
turn. Section 6013(a)(3) provides that, in the
case of death of a husband, wife or both,
an executor may make a joint return with
respect to a decedent. If an executor is ap-
pointed after a surviving spouse makes a
joint return, the executor may disaffirm the
joint return in the manner prescribed by sec-
tion 6013(a)(3). If a husband and wife make
a joint return, then the liability with re-
spect to the tax shall be joint and several
pursuant to section 6013(d)(3).
Under section 6015, an individual who
makes a joint return may elect to seek re-
lief from joint and several liability. Sec-
tion 6015(b) provides procedures for
seeking relief from joint and several liabil-
ity applicable to all joint filers. Relief from
joint and several liability pursuant to sec-
tion 6015(c) only applies to limit tax li-
ability for joint filers who are no longer
married, legally separated, or not mem-
bers of the same household for a period of
at least 12 months prior to filing a request.
Section 1.6015–3(a) of the Income Tax
Regulations provides guidance as to the
marital status of a deceased requesting
spouse. Section 6015(f) provides author-
ity for the Service to grant equitable re-
lief when relief is not otherwise available
under section 6015(b) or (c), if taking into
account all the facts and circumstances, the
Service determines that an individual seek-
ing relief (a“requesting spouse”) should not
be held liable.
Section 6015 does not expressly autho-
rize an executor to file a request for re-
lief from joint and several liability resulting
from a joint return pursuant to section 6013.
The regulations under section 6015, how-
ever, contemplate that a requesting spouse
may be deceased.
An executor, acting on behalf of a de-
cedent’s estate in a fiduciary capacity, is
granted broad authority. Some of the au-
thority is explicitly provided by statute and
other authority is derived from an execu-
tor’s fiduciary obligations. The explicit au-
thority of an executor on behalf of a
decedent’s estate under the Code includes,
but is not limited to, requesting prompt as-
sessment and discharge from personal li-
ability under section 6501(d), electing to
treat a revocable trust as part of an estate
under section 645, electing an alternate
valuation date under section 2032, mak-
ing a qualified terminal interest property
election under section 2056(b)(7), elect-
ing to extend the time for payment of es-
tate taxes under section 6166, postponing
the payment of estate taxes attributable to
reversionary or remainder interests under
section 6163(a), making a return for a short
period under section 443(a), electing to rec-
ognize gain or loss on distributions of prop-
erty in kind under section 643(e), and
electing S corporation status under sec-
tion 1362.
May 5, 20038492003–18 I.R.B.

Section 6903 provides that, upon no-
tice to the Secretary that any person is act-
ing for another person in a fiduciary
capacity, the fiduciary shall assume the
powers, rights, duties, and privileges of the
other person in respect of a tax imposed by
the Code. The term“fiduciary”is defined
in section 7701(a)(6) as a guardian, trustee,
executor, administrator, receiver, conser-
vator, or any person acting in any fidu-
ciary capacity for any person.
Because an executor assumes the rights
of a decedent’s estate pursuant to the broad
grant of authority in section 6903 and has
specific authority to make and disaffirm
joint returns under section 6013(a)(3), an
executor also is authorized to seek relief
from joint and several liability pursuant to
section 6015 on behalf of a decedent. It
makes no difference whether the request for
relief is an election pursuant to section
6015(b) or (c), or a request for equitable re-
lief pursuant to section 6015(f). It also fol-
lows that an executor may pursue an
existing request for relief from joint and
several liability pursuant to section 6015 that
was made during the requesting spouse’s
lifetime. The Tax Court implicitly recog-
nized that an executor may pursue an ex-
isting request inJonson v. Commissioner,
118 T.C. 106 (2002),appeal docketed, No.
02–9009 (10
th
Cir. May 24, 2002) (tax-
payer appeal on other grounds).
While an executor may pursue an ex-
isting request or seek relief from joint and
several liability under section 6015(c), re-
lief will not be available unless the dece-
dent had satisfied the eligibility requirements
while alive. To determine marital status for
purposes of section 6015(c), section 1.6015–
3(a) of the Income Tax Regulations pro-
vides for determination of marital status of
a deceased requesting spouse as of the ear-
lier of the date of the section 6015(c) elec-
tion or the date of death in accordance with
section 7703(a)(1). The Tax Court in
Jonsonheld that the eligibility require-
ments under section 6015(c), that the joint
filers be no longer married, legally sepa-
rated, or not members of the same house-
hold, cannot be satisfied by the death of a
requesting spouse.
HOLDINGS
Situation 1. An executor of a decedent’s
estate may pursue a section 6015 request
for relief from joint and several liability
made during the decedent’s lifetime.
Situation 2. An executor of a decedent’s
estate has authority under section 6903 to
file a request for relief pursuant to sec-
tion 6015 as long as the decedent had sat-
isfied any applicable requirements while
alive.
DRAFTING INFORMATION
The principal author of this revenue rul-
ing is Jamie G. Bernstein of the Office of
Associate Chief Counsel (Procedure and
Administration), Administrative Provi-
sions and Judicial Practice Division. For fur-
ther information regarding this revenue
ruling, contact Ms. Bernstein at (202) 622–
4940 (not a toll-free call).
2003–18 I.R.B.850May 5, 2003

Part III. Administrative, Procedural, and Miscellaneous
Offshore Deferred
Compensation Arrangements
Notice 2003–22
The Internal Revenue Service and the
Treasury Department have become aware
of a type of arrangement, described be-
low, that is being promoted to and used by
taxpayers for the purpose of avoiding or
evading federal income and employment
taxes. This notice alerts taxpayers and their
representatives that the tax benefits pur-
portedly generated by these arrangements
are not allowable for federal income or em-
ployment tax purposes. This notice also
alerts taxpayers, their representatives, and
promoters of these arrangements of cer-
tain responsibilities that may arise from par-
ticipatinginorpromotingthese
arrangements.
FACTS
In general, the arrangement involves a
series of steps involving domestic and for-
eign parties. First, Taxpayer, an individual,
purports to terminate Taxpayer’s existing
employment relationship with a domestic
corporation (“Service Recipient Corpora-
tion”) that may be owned, either directly or
indirectly, in whole or in part by Taxpayer.
Taxpayer then purports to enter into an em-
ployment relationship with a foreign cor-
poration (“Foreign Leasing Corporation”)
that is incorporated and managed in a coun-
try with which the United States has an in-
come tax convention. Foreign Leasing
Corporation purports to lease the right to
Taxpayer’s services in the United States to
a domestic corporation (“Domestic Leas-
ing Corporation”). Domestic Leasing Cor-
poration, in turn, purports to lease
Taxpayer’s services to Service Recipient
Corporation.
Before entering into the arrangement,
Taxpayer has little or no business relation-
ship either with Foreign Leasing Corpora-
tion or with Domestic Leasing Corporation.
After entering into the arrangement, Tax-
payer continues to provide substantially the
same services for Service Recipient Cor-
poration that Taxpayer provided before en-
tering into the arrangement, and, thus, the
interposition of Foreign Leasing Corpora-
tion and Domestic Leasing Corporation has
no significant effect on Taxpayer’s perfor-
mance of services for Service Recipient
Corporation.
Service Recipient Corporation makes
payments to Domestic Leasing Corpora-
tion for Taxpayer’s services. Domestic Leas-
ing Corporation makes payments to
Taxpayer for Taxpayer’s services in an
amount substantially less than the amount
paid to Domestic Leasing Corporation by
Service Recipient Corporation. After de-
ducting a fee for its participation in the ar-
rangement, Domestic Leasing Corporation
remits to Foreign Leasing Corporation, in
return for Taxpayer’s services, the remain-
der of the amount paid to Domestic Leas-
ing Corporation by Service Recipient
Corporation.
Foreign Leasing Corporation deducts a
fee from the amount paid by Domestic
Leasing Corporation and typically credits
the remainder to a notional account main-
tained on behalf of Taxpayer. In certain
cases, Foreign Leasing Corporation trans-
fers the remainder to a trust (“Trust”) for
the benefit of Taxpayer. Although the as-
sets of Trust may be nominally subject to
the claims of Foreign Leasing Corpora-
tion’s creditors, it is typically difficult or
impossible for creditors of Foreign Leas-
ing Corporation, Domestic Leasing Cor-
poration, or Service Recipient Corporation
to reach the assets of Trust in the event of
insolvency or bankruptcy of any of these
entities.
The arrangement is often designed to
provide Taxpayer, either directly or indi-
rectly, with explicit or implicit control over
the amounts held on Taxpayer’s behalf by
Foreign Leasing Corporation or Trust. For
example, the arrangement may permit or re-
quire Foreign Leasing Corporation to pro-
vide Taxpayer with a device, such as a
credit or debit card, for paying personal,
business, or professional expenses out of
such amounts. As another example, the ar-
rangement may permit Taxpayer to sub-
mit bills and receipts for payment or
reimbursement from such amounts or to
borrow from such amounts.
Taxpayer takes the reporting position that
only the compensation actually paid to Tax-
payer by Domestic Leasing Corporation is
currently includible in Taxpayer’s gross in-
come and that amounts held by Foreign
Leasing Corporation or Trust on Taxpay-
er’s behalf are not currently includible in
Taxpayer’s gross income.
Service Recipient Corporation takes the
reporting position that the entire amount
paid to Domestic Leasing Corporation in re-
turn for Taxpayer’s services is currently de-
ductible as a trade or business expense
under§162 of the Internal Revenue Code.
Service Recipient Corporation does not treat
the amount paid to Domestic Leasing Cor-
poration as compensation to Taxpayer and,
therefore, does not report any amount at-
tributable thereto or withhold or pay any
amount therefrom for federal tax purposes.
Domestic Leasing Corporation takes the
reporting position that both the compen-
sation paid to Taxpayer and the amount paid
to Foreign Leasing Corporation are cur-
rently deductible as a trade or business ex-
pense. Domestic Leasing Corporation does
not treat the amount paid to Foreign Leas-
ing Corporation as compensation to Tax-
payer and, therefore, does not report any
amount attributable thereto or withhold or
pay any amount therefrom for federal tax
purposes.
Foreign Leasing Corporation takes the
position that it is a resident of a country
with which the United States has an in-
come tax convention, and that it is en-
titled to all of the benefits afforded under
that convention. Foreign Leasing Corpo-
ration also takes the position that, pursu-
ant to the convention, no portion of the
amount paid to it by Domestic Leasing Cor-
poration is subject to income tax by the
United States because such amount is busi-
ness profits which are not attributable to a
permanent establishment in the United
States.
The structure of the arrangement may
vary without altering the applicability of this
notice to the arrangement. For example, the
applicability of this notice is not depen-
dent upon Taxpayer owning Service Re-
cipient Corporation, or Service Recipient
Corporation being the same taxpayer be-
fore and after Taxpayer enters into the ar-
rangement. Similarly, the applicability of
this notice is not dependent upon Domes-
tic Leasing Corporation or Foreign Leas-
ing Corporation existing before Taxpayer
enters into the arrangement. In addition, the
applicability of this notice to the arrange-
ment is not affected by replacing Domes-
tic Leasing Corporation, Foreign Leasing
May 5, 20038512003–18 I.R.B.

Corporation, or Service Recipient Corpo-
ration (or two or more of those corpora-
tions) with one or more non-corporate
entities. Likewise, the applicability of this
notice to the arrangement is not affected by
replacing Trust with another person or per-
sons, or by involving one or more other cor-
porations or non-corporate entities. These
and similar variations are within the scope
of this notice. Moreover, the means (if any)
by which Taxpayer has control over the
amount held by Foreign Leasing Corpora-
tion or Trust on Taxpayer’s behalf are not
limited to the means described in this no-
tice.
ANALYSIS
The arrangement described in this no-
tice involves a series of steps, some or all
of which do not reflect the underlying eco-
nomics of the arrangement, and has been
designed to circumvent longstanding le-
gal principles to enable Taxpayer and Ser-
vice Recipient Corporation to avoid or
evade income and employment taxes. Tax-
payers who participate in the arrangement
may believe they can achieve its purpose
or intended result by relying on various
documents and agreements, which purport-
edly create binding and legally enforce-
able obligations among the parties to the
arrangement. The Internal Revenue Ser-
vice intends to challenge the purported tax
benefits claimed for this arrangement on a
number of grounds, including, but not lim-
ited to, the nature and substance of the ar-
rangement and of the documents and
agreements used to facilitate it.
In challenging the purported tax ben-
efits, the Service will, in appropriate cases,
assert that Taxpayer’s employment by For-
eign Leasing Corporation and the addi-
tional steps by which Taxpayer’s services
are leased back to Service Recipient Cor-
poration are disregarded for federal tax pur-
poses. Thus, the Service will assert that
Taxpayer remains the employee of Ser-
vice Recipient Corporation and that amounts
paid by Service Recipient Corporation to
Domestic Leasing Corporation either (1) are
currently includible in Taxpayer’s gross in-
come as compensation for services pro-
vided to Service Recipient Corporation or
(2) are not currently deductible by Ser-
vice Recipient Corporation.
More specifically, with regard to the tax
benefits claimed by Taxpayer and irrespec-
tive of whether the Service asserts that the
leasing arrangement should be disregarded
for tax purposes, the Service may assert, in
appropriate cases, that amounts paid to Do-
mestic Leasing Corporation by Service Re-
cipient Corporation have been actually or
constructively received by Taxpayer. The
Service may assert, in addition or in the al-
ternative, that such amounts are currently
includible in Taxpayer’s gross income un-
der§83(a), the economic benefit doctrine,
the cash equivalency doctrine, or the as-
signment of income doctrine, or that such
amounts are constructive dividends to Tax-
payer.
With regard to Service Recipient Cor-
poration, the Service may assert that the
amount paid to Domestic Leasing Corpo-
ration, less the amount Domestic Leasing
Corporation pays currently to Taxpayer, is
nonqualified deferred compensation, the de-
ductibility of which is governed by
§404(a)(5) and which is subject to FICA
tax under§3121(v)(2), or property trans-
ferred to Taxpayer in connection with the
performance of services, the deductibility
of which is governed by§83(h) and which
is subject to FICA tax under§3121(a) or
3121(v)(2). The Service also may disal-
low the deductibility of such amount as (1)
not being an ordinary and necessary busi-
ness expense under§162 or (2) being a
nondeductible constructive dividend to Tax-
payer.
Finally, the Service also may challenge
attempts to apply a tax convention be-
tween the United States and a foreign coun-
try to the arrangement in a manner that is
inconsistent with the way the arrangement
is characterized for United States tax pur-
poses.
Arrangements that are the same as, or
substantially similar to, the arrangement
(“Offshore Deferred Compensation Ar-
rangement”) described in this notice are,
with respect to Taxpayer, Service Recipi-
ent Corporation, and Domestic Leasing Cor-
poration, identified as“listed transactions”
for purposes of§1.6011–4(b)(2) of the In-
come Tax Regulations and§§301.6111–
2(b)(2) and 301.6112–1(b)(2) of the
Procedure and Administration Regulations.
Further, it should be noted that, indepen-
dent of their classification as“listed trans-
actions”for purposes of§§1.6011–4(b)(2),
301.6111–2(b)(2), and 301.6112–1(b)(2), ar-
rangements that are the same as, or sub-
stantially similar to, an Offshore Deferred
Compensation Arrangement may already be
subject to the disclosure requirements of
§6011, the tax shelter registration require-
ments of§6111, or the list maintenance re-
quirements of§6112 (§§1.6011–4,
301.6111–1T, 301.6111–2, and 301.6112–
1).
Persons who are required to satisfy the
registration requirement of§6111 with re-
spect to the arrangement described in this
notice and who fail to do so may be sub-
ject to the penalty under§6707(a). Per-
sons who are required to satisfy the list-
keeping requirement of§6112 with respect
to the transaction and who fail to do so may
be subject to the penalty under§6708(a).
In addition, the Service may impose pen-
alties on participants in this arrangement or
substantially similar arrangements, or, as ap-
plicable, on persons who participate in the
promotion or reporting of this arrange-
ment or substantially similar arrangements,
including the accuracy-related penalty un-
der§6662, the return preparer penalty un-
der§6694, the promoter penalty under
§6700, and the aiding and abetting pen-
alty under§6701. In addition to other pen-
alties, any person who willfully attempts to
evade or defeat tax by means of the ar-
rangement described in this notice or sub-
stantially similar arrangements, or who
willfully counsels or advises such eva-
sion or defeat, may be guilty of a crimi-
nal offense under§§7201, 7203, 7206, or
7212(a) or other provisions of federal law.
The Service cautioned taxpayers against
the arrangement described in this notice in
a recent outreach project. Although that par-
ticular outreach project was directed to-
ward medical professionals, the applicability
of this notice is not dependent upon Tax-
payer being a medical professional. Tax-
payers can obtain copies of the Service’s
alert on the IRS web site atwww.irs.gov—
search term“employee leasing.”
Taxpayers who have participated or who
are currently participating in the arrange-
ment described in this notice are encour-
aged to apply to participate in the Offshore
Voluntary Compliance Initiative described
in Rev. Proc. 2003–11, 2003–4 I.R.B. 311.
The principal author of this notice is Ken
Griffin of the Office of Division Counsel/
Associate Chief Counsel (Tax Exempt
and Government Entities). For further in-
formation regarding this notice, contact
Mr. Griffin at (202) 622–6030 (not a toll-
free call).
2003–18 I.R.B.852May 5, 2003

Tax Problems Raised by
Certain Trust Arrangements
Seeking to Qualify for
Exception for Collectively
Bargained Welfare Benefit
Funds Under§419A(f)(5)
Notice 2003–24
The Internal Revenue Service and the
Treasury Department have become aware
of certain arrangements purporting to qualify
as collectively-bargained welfare benefit
funds excepted from the account limits of
§419 and§419A of the Internal Rev-
enue Code. This notice alerts taxpayers and
their representatives that the tax benefits
purportedly generated by these transac-
tions are not allowable for federal income
tax purposes. This notice also identifies
some purported collectively bargained ar-
rangements as listed transactions and alerts
taxpayers, their representatives, and orga-
nizers or sellers of these transactions to cer-
tain responsibilities that may arise from
participating in these transactions.
In general, contributions to a welfare
benefit fund are deductible when paid, but
only if they qualify as ordinary and nec-
essary business expenses of the taxpayer
and only to the extent allowable under§419
and§419A of the Code. Those sections im-
pose strict limits on the deduction for con-
tributions in excess of current costs. An
exception to some of the limits is pro-
vided under§419A(f)(5) for contribu-
tions to a separate welfare benefit fund
under a collective bargaining agreement.
The exception is based in part on the
premise that deductions in such a setting
will not be excessive because of the arms’
length negotiations between adversary par-
ties inherent in the collective bargaining pro-
cess.SeeS. Rep. No. 313, 99th Cong., 2nd
Sess. 1010 (1986), 1986–3 C.B. (Vol. 3) 1,
1010.
Section 1.419A–2T, Q&A–2, of the In-
come Tax Regulations sets out a number of
requirements that a fund must meet in or-
der to qualify as a welfare benefit fund un-
der a collective bargaining agreement for
purposes of§419A(f)(5) of the Code. One
of those requirements is that the benefits
provided through the fund were the sub-
ject of arms-length negotiations between
employee representatives and one or more
employers. Another requirement is that the
circumstances surrounding a collective bar-
gaining agreement must evidence good faith
bargaining between adverse parties over the
welfare benefits to be provided through the
fund.
Section 7701(a)(46) of the Code pro-
vides, in part, that an agreement will not be
treated as a collective bargaining agree-
ment unless it is abona fideagreement be-
tweenbona fideemployee representatives
and one or more employers. When this lan-
guage was added to the Code in 1986, the
Committee on Ways and Means reported
that some promoters of tax avoidance ar-
rangements were entering into arrange-
ments with employers under which,
superficially, the employer and its employ-
ees were represented by agents in collec-
tive bargaining. The Committee noted that
the named bargaining agent for the em-
ployees may have obtained a ruling by the
Internal Revenue Service that the agent is
exempt from tax as a labor organization.
Even so, the Committee noted, no good
faith bargaining occurred under this type of
arrangement because the bargaining agent
for the employees merely acts in concert
with the named bargaining agent for the em-
ployer. The Committee Report states:
The committee believes that these ar-
rangements are, in fact, designed for no
material purpose other than the improper
exploitation of provisions that are ap-
propriate only for legitimate collec-
tively bargained plans. The committee
wishes to make clear that it does not re-
gard such an arrangement as the prod-
uct of good faith bargaining and that it
does not consider an entity to be an em-
ployee representative merely because of
its status for tax exemption or a deter-
mination by the Internal Revenue Ser-
vice with respect to that status.
H.R. Rep. No. 426, 99
th
Cong., 1st Sess.
760 (1986), 1986–3 C.B. (Vol. 2) 1, 760.
A number of business owners have been
approached about arrangements that pur-
portedly allow the business to take a cur-
rent tax deduction for all contributions to
a welfare benefit fund. Prior to this con-
tact, these businesses typically have had no
involvement with labor organizations or
other aspects of the collective bargaining
process. The promoters of these arrange-
ments rely on§419A(f)(5), claiming that
the benefits are provided under a collec-
tive bargaining agreement. The individual
or company promoting the arrangement
typically arranges for an organization (some-
times referred to as a management group)
to act on the business’s behalf in bargain-
ing with an employee representative over
benefits to be provided to some or all of the
employees of the business (including em-
ployees who are also owners of the busi-
ness) and over certain other terms. While
its name may include the word“union,”the
employee representative is often estab-
lished specifically for the purpose of the
welfare benefit arrangement that is being
promoted. In other cases, the employee rep-
resentative may be affiliated with an es-
tablished union.
These arrangements usually require large
employer contributions relative to the
amount actually needed to provide the cur-
rent coverage for the welfare benefits un-
der the arrangement. Typically, benefits that
are provided or expected to be provided to
employees who are also owners are more
favorable than the benefits provided to em-
ployees who are not owners. For example,
if death benefit protection is being pro-
vided, owners may be covered by cash
value life insurance policies (and entitled
to certain benefits resulting from amounts
accumulating under those policies) while
other employees receive only term insur-
ance coverage or other less valuable cov-
erage than that provided to the owners.
In some of the arrangements, partici-
pants can access funds by obtaining a loan
from the trust. While the plan documents
may indicate that the loans are available
only for unanticipated future events, in re-
ality, most owners will be able to obtain a
loan without regard to whether those events
occur.
Often, the arrangement will operate to
allow the owner or owners to benefit from
any contributions to the trust in excess of
amounts actually used to provide cover-
age to other employees.
In general, these arrangements and other
similar arrangements do not satisfy the re-
quirements of§419A(f)(5) of the Code and
do not provide the tax deductions claimed
by their promoters. For example, if an em-
ployer (or its agent) bargains for benefits
to be provided to employees, including the
owner or owners of that employer, and the
benefits to be provided to an owner are
more favorable than those provided to other
employees, the circumstances of that bar-
gaining process strongly indicate a lack of
the good faith bargaining required to sat-
isfy the conditions for the§419A(f)(5) ex-
ception. Further, even if the stated benefits
May 5, 20038532003–18 I.R.B.

for an owner are not more favorable than
those for other employees (e.g., all ben-
efits are based on a uniform percentage of
compensation), the facts and circumstances
of the particular arrangement or the bar-
gaining process may indicate that the good
faith bargaining requirement, or another re-
quirement to be treated as a collective bar-
gaining agreement for purposes of
§419A(f)(5), has not been met.
In addition, an employer’s deduction for
contributions to the trust will be subject to
the deduction limits of§§419 and 419A of
the Code if it is not a“separate”welfare
benefit fund under a collective bargain-
ing agreement. Moreover, the deduction
may be subject to or disallowed by other
provisions of the Code. For example, de-
pending on the facts and circumstances, the
arrangement may actually be providing de-
ferred compensation or a constructive divi-
dend to an owner rather than welfare
benefits. If the arrangement is providing de-
ferred compensation, the employer’s de-
duction for contributions to the trust is
governed by§404(a)(5) of the Code, rather
than by§§419 and 419A. If the arrange-
ment is providing a constructive dividend,
to the extent of the constructive dividend,
the contributions are not deductible at all.
Taxpayers and their representatives
should be aware that the Service has dis-
allowed deductions for contributions to these
types of arrangements in the past and in-
tends to do so in the future.
The Service would like to emphasize that
the fact that a trust used to provide ben-
efits under an arrangement may have re-
ceived a determination letter stating that the
trust is exempt under§501(c)(9) of the
Code has no relevance to the issues dis-
cussed in this notice. A determination let-
ter under§501(c)(9) determines only the
tax status of the trust. It does not deter-
mine the tax deductibility of contributions
to such a trust, nor does it determine the
taxation of the benefits provided through the
fund to the participants. Also, as provided
by regulations, even if a union has been rec-
ognized as exempt under§501(c)(5), the
Service nevertheless has the authority to de-
termine whether there is a collective bar-
gaining agreement under the Code. Regs.
§301.7701–17T.
Listed Transactions
The following arrangements, and any ar-
rangement that is substantially similar to one
of the following arrangements, are identi-
fied as“listed transactions”for purposes of
§1.6011–4(b)(2) of the Income Tax Regu-
lations and§301.6111–2(b)(2) and
§301.6112–1(b)(2) of the Procedure and
Administration Regulations. For purposes
of determining whether an arrangement is
a listed transaction described in this no-
tice, the term owner refers to a“key em-
ployee”as defined in§416(i)(1) of the
Code, other than an individual who is
a key employee solely by reason of
§416(i)(1)(A)(i) (officers having annual
compensation greater than a specified
amount).
Any arrangement involving a purported
collectively bargained welfare benefit fund
is a listed transaction with respect to an em-
ployer if, in any year, the employer’s con-
tributions with respect to any owner or
owners of the employer, considered in the
aggregate, are more than one-half of the
employer’s total contributions, but only if
there is at least one owner with respect to
whom the employer’s contributions ex-
ceed $20,000. For this purpose, an em-
ployer’s contributions with respect to an
owner means employer contributions used
to fund the coverage or benefits for the
owner, including any employer contribu-
tions used to pay premiums on an insur-
ance contract covering the owner.
Any arrangement involving a purported
collectively bargained welfare benefit fund
is a listed transaction with respect to an em-
ployer if it provides more favorable cov-
erage for an owner of the employer than for
employees who are not owners. Even if the
stated coverage under an arrangement is not
more favorable for an owner, an arrange-
ment provides more favorable coverage for
an owner (and thus is a listed transaction)
if it has any attributes that are likely to re-
sult in an owner actually receiving more fa-
vorable coverage or benefits than other
employees, either during the term of the
purported collective bargaining agreement
or after the agreement has terminated. An
arrangement that provides coverage based
on a uniform percentage of each employ-
ee’s compensation will not be treated as
providing more favorable coverage to an
owner merely because the owner has higher
coverage as a result of the owner’s higher
compensation.
Some examples of purported collec-
tively bargained arrangements that have at-
tributes likely to result in an owner actually
receiving more favorable coverage or ben-
efits than other employees are as follows:
An arrangement providing death ben-
efits based on a uniform multiple of
compensation, if it can be expected that
an owner will obtain other benefits, such
as rights to accumulated amounts un-
der the arrangement, that are not avail-
able on the same basis to other
employees;
An arrangement allowing loans to par-
ticipants under which it can be expected
that an owner will be able to obtain the
loans more readily, or on better terms,
than the other employees;
An arrangement providing benefits
only to participants who have completed
a specified number of years of service
with the employer, if it can be expected
that one or more owners will be the only
employees to satisfy the years-of-service
requirement.
It should be noted that, independent of
any classification as“listed transactions”for
purposes of§§1.6011–4(b)(2), 301.6111–
2(b)(2), and 301.6112–1(b)(2) of the regu-
lations, arrangements that are the same as,
or substantially similar to, the arrange-
ments described in this notice may already
be subject to the disclosure requirements of
§6011 of the Code, the tax shelter regis-
tration requirements of§6111 or the list
maintenance requirements of§6112
(§§1.6011–4, 301.6111–1T, 301.6111–2,
and 301.6112–1).
Persons who are required to satisfy the
registration requirement of§6111 of the
Code with respect to the arrangements de-
scribed in this notice and who fail to do so
may be subject to the penalty under
§6707(a). Persons who are required to sat-
isfy the list-keeping requirement of§6112
with respect to the arrangements and who
fail to do so may be subject to the pen-
alty under§6708(a). In addition, the Ser-
vice may impose penalties on participants
in these arrangements or substantially simi-
lar arrangements, or, as applicable, on per-
sons who participate in the promotion or
reporting of these arrangements or sub-
stantially similar arrangements, including the
accuracy-related penalty under§6662, the
return preparer penalty under§6694, the
promoter penalty under§6700, and the aid-
ing and abetting penalty under§6701. In
addition to other penalties, any person who
willfully attempts to evade or defeat tax by
means of the arrangements described in this
notice, or who willfully counsels or ad-
vises such evasion or defeat, may be guilty
2003–18 I.R.B.854May 5, 2003

of a criminal offense under§§7201, 7203,
7206, or 7212(a) or other provisions of fed-
eral law.
Future Regulations
The Service is planning to publish pro-
posed regulations under§419A(f)(5) that
will address, among other things, the“sepa-
rate”fund requirement discussed above. The
Service understands that there arebona fide
collectively bargained welfare benefit plans
that provide benefits to one or more em-
ployees who are not collectively bargained,
and that some of these plans might not have
maintained a separate and distinct fund for
only the collectively bargained employ-
ees. The Treasury and the Service request
comments from the public regarding the
“separate”fund requirement in advance of
publishing the proposed regulations.
Those comments may be mailed to
CC:PA:RU (Notice 2003–24), room 5226,
Internal Revenue Service, POB 7604, Ben
Franklin Station, Washington, DC 20044.
Alternatively, comments may be hand de-
livered Monday through Friday between the
hours of 8 a.m. and 4 p.m. to CC:PA:RU
(Notice 2003–24), Courier’s Desk, Inter-
nal Revenue Service,1111Constitution Av-
enue, NW, Washington, DC, or submitted
electronically to:Notice.Comments@
irscounsel.treas.gov. Comments should be
submitted no later than August 3, 2003. All
comments will be available for public in-
spection and copying.
Drafting Information
The principal authors of this notice are
Louis Leslie of the Employee Plans, Tax
Exempt and Government Entities Divi-
sion and Betty Clary of the Office of Di-
vision Counsel/Associate Chief Counsel
(Tax Exempt and Government Entities). For
further information regarding this notice,
contact Mr. Leslie at (202) 283–9888 (not
a toll-free call) or Ms. Clary at (202) 622–
6080 (not a toll-free call).
Canadian Retirement Plan
Trust Reporting
Notice 2003–25
Internal Revenue Code section 6048 re-
quires information reporting with respect to
certain foreign trusts. Persons subject to
these information reporting rules must file
Form 3520 (Annual Return to Report Trans-
actions with Foreign Trusts and Receipt of
Certain Foreign Gifts) or Form 3520–A
(Annual Information Return of Foreign
Trust With a U.S. Owner), as applicable.
Form 3520 is generally filed on an an-
nual basis on or before the due date for the
U.S. owner’s or U.S. beneficiary’s income
tax return. A person may obtain an exten-
sion of time to file Form 3520 by obtain-
ing an extension of time to file the
applicable income tax return. Form 3520–A
is generally due by the fifteenth day of the
third month after the end of the trust’s tax
year. A person may seek an extension of
time to file Form 3520–A by filing Form
2758 (Application for Extension of Time to
File Certain Excise, Income, Information,
and Other Returns). Specific penalties un-
der Internal Revenue Code section 6677 ap-
ply if a Form 3520 or Form 3520–Aisnot
timely filed or if the required information
is incomplete or incorrect.
Treasury and the Internal Revenue Ser-
vice have become aware that many tax-
payers with interests in Canadian registered
retirement savings plans (RRSPs), as well
as the custodians of such plans, are unfa-
miliar with the requirements for filing
Forms 3520 and 3520–A. Under the cir-
cumstances, the IRS has determined that it
will enforce neither filing requirements, nor
penalties under section 6677, for Forms
3520 and 3520–A with respect to such plans
for tax years before 2002, and will grant ad-
ditional time to file these forms for 2002.
Any person who is required to file a 2002
Form 3520 or Form 3520–A with respect
to an RRSP or other eligible plan within the
meaning of section 3 of Revenue Proce-
dure 2002–23, 2002–1 C.B. 744, is granted
an automatic extension of time to file un-
til August 15, 2003. If a person obtains an
extension of time to file a Form 3520 or
Form 3520–A for a date later than Au-
gust 15, 2003, then such later extension date
applies. Penalties for failure to file will not
apply to a person who files by the rel-
evant extension date.
In addition, if the beneficiary of an eli-
gible plan has made an election in accor-
dance with section 4 of Rev. Proc. 2002–23
and the beneficiary complies with the an-
nual reporting requirements of Rev. Proc.
2002–23, the plan is relieved of any obli-
gation to file Form 3520–A for any year for
which such requirements are met.
Treasury and the IRS are interested in
establishing for future taxable years a sim-
plified reporting regime for RRSPs and per-
sons with interests in RRSPs. In addition
to streamlining the reporting requirements,
Treasury and the IRS are considering co-
ordinating them with the election described
in Rev. Proc. 2002–23. Treasury and the
IRS also will consider whether there are
other pension plans similar to RRSPs for
which similar simplified reporting is ap-
propriate.
The principal author of this notice is
Amanda A. Ehrlich of the Office of Asso-
ciate Chief Counsel (International). For fur-
ther information regarding this notice,
contact Amanda A. Ehrlich or Willard W.
Yates at (202) 622–3880 (not a toll-free
call).
Public Comment Invited on
Recommendations for
2003–2004 Guidance Priority
List
Notice 2003–26
The Department of Treasury and Inter-
nal Revenue Service invite public com-
ment on recommendations for items that
should be included on the 2003–2004 Guid-
ance Priority List.
Treasury’s Office of Tax Policy and the
Service use the Guidance Priority List each
year to identify and prioritize the tax is-
sues that should be addressed through regu-
lations, revenue rulings, revenue procedures,
notices, and other published administra-
tive guidance. The 2003–2004 Guidance
Priority List sets forth guidance that the
Treasury Department and the Service in-
tend to issue from July 1, 2003, through
June 30, 2004. The Treasury Department
and the Service recognize the importance
of public input to formulate a Guidance Pri-
ority List that focuses resources on guid-
ance items that are most important to
taxpayers and tax administration.
In reviewing recommendations and se-
lecting projects for inclusion on the 2003–
2004 Guidance Priority List, the Treasury
Department and the Service will consider
the following:
May 5, 20038552003–18 I.R.B.

1. Whether the recommended guidance
is consistent with the Internal Revenue Code
and Congressional intent;
2. Whether the recommended guidance
promotes sound tax administration;
3. Whether taxpayers can easily under-
stand and apply the recommended guid-
ance;
4. Whether the Service can enforce the
recommended guidance on a uniform ba-
sis; and
5. Whether the recommended guidance
reduces controversy or lessens the burden
on taxpayers and the Service.
Taxpayers may submit recommenda-
tions for guidance at any time during the
year. Please submit recommendations by
May 15, 2003, for possible inclusion on the
original 2003–2004 Guidance Priority List.
The Service will update the 2003–2004
Guidance Priority List quarterly to reflect
additional guidance that the Treasury De-
partment and the Service intend to pub-
lish during the plan year. The quarterly
updates allow the Treasury Department and
the Service to respond to the need for ad-
ditional guidance that may arise during the
plan year. Generally, recommendations for
guidance received after May 15, 2003, will
be reviewed for inclusion in the next quar-
terly update if received by August 31, 2003;
November 30, 2003; or February 28, 2004,
respectively.
Taxpayers are not required to submit rec-
ommendations for guidance in a particu-
lar format. Taxpayers should, however,
briefly describe the recommended guid-
ance and explain the need for the guid-
ance. In addition, taxpayers may include an
analysis of how the issue should be re-
solved.
Taxpayers should send written com-
ments to:
Internal Revenue Service
Attn: CC:PA:RU (Notice 2003–26)
Room 5226
P.O. Box 7604
Ben Franklin Station
Washington, D.C. 20044
or hand deliver comments between the
hours of 8 a.m. and 5 p.m. to:
Courier’s Desk
Internal Revenue Service
Attn: CC:PA:RU (Notice 2003–26)
1111Constitution Avenue, N.W.
Washington, D.C. 20224
Alternatively, taxpayers may submit
comments electronically via e-mail to the
following address:Notice.Comments
@irscounsel.treas.gov.Taxpayers should in-
clude“Notice 2003–26”in the subject line.
All comments will be available for public
inspection and copying in their entirety.
For further information regarding this no-
tice, contact Crystal Foster of the Office of
Associate Chief Counsel (Procedure and
Administration) at (202) 622–4652 (not a
toll-free call).
26 CFR 601.204: Changes in accounting periods
and methods of accounting.
(Also Part I,§§442; 1.442–1)
Rev. Proc. 2003–34
SECTION 1. PURPOSE
.01 This revenue procedure modifies one
of the terms and conditions under which the
Internal Revenue Service grants approval
of requests for changes in annual account-
ing periods filed under Rev. Proc. 2002–
37, 2002–22 I.R.B. 1030, and Rev. Proc.
2002–39, 2002–22 I.R.B. 1046. Specifi-
cally, this revenue procedure modifies the
term and condition pursuant to which tax-
payers generally are prohibited from car-
rying back net operating losses (NOLs) and
capital losses (CLs) generated in the short
period necessary to effect the change.See
section 6.08 of Rev. Proc. 2002–37, and
section 5.04(6) of Rev. Proc. 2002–39.
.02 The Modified Carryback Term and
Condition of section 4.01 of this revenue
procedure generally applies, in the case of
taxpayers within the scope of Rev. Proc.
2002–37, to taxable years ending on or af-
ter April 8, 2003, and, in the case of cer-
tain taxpayers within the scope of Rev. Proc.
2002–39, to applications filed on or after
that date. In addition, section 5 of this rev-
enue procedure allows certain qualifying
taxpayers that previously changed their an-
nual accounting period (either automati-
cally or with prior approval) to elect to
apply either (1) the Modified Carryback
Term and Condition, under which the loss
is carried back to the applicable number of
years prescribed by§172 or 1212 of the
Internal Revenue Code as it would have ap-
plied to the short period; or (2) in the case
of taxpayers with certain NOLs arising in
short periods ending during 2001 or 2002,
an Alternative Carryback Term and Con-
dition under which the NOL is carried back
to each of the 2 taxable years preceding the
short period.
SECTION 2. BACKGROUND
.01 Section 442 and§1.442–1(a) of the
Income Tax Regulations generally pro-
vide that a taxpayer that wants to change
its annual accounting period and use a new
taxable year must obtain the approval of the
Commissioner.
.02 Section 1.442–1(b)(2) provides, in
relevant part, that a change in annual ac-
counting period will be approved only
where the taxpayer agrees to the Commis-
sioner’s prescribed terms, conditions, and
adjustments for effecting the change.
.03 Section 1.442–1(b)(3) provides that
such terms, conditions, and adjustments may
include adjustments necessary to neutral-
ize the tax effects of a substantial distor-
tion of income that would otherwise result
from the requested annual accounting pe-
riod, including, for example, the creation of
a short period in which there is a substan-
tial NOL, CL, or credit (including a gen-
eral business credit).
.04 Section 172(b)(1)(A)(i) generally
provides that an NOL for any taxable year
must be carried back to each of the 2 tax-
able years preceding the taxable year of
such NOL, unless the taxpayer elects to
forgo the carryback period by attaching a
statement to the taxpayer’s timely filed
original federal income tax return for the
loss year.See§172(b)(3). Section
172(b)(1)(H) provides that NOLs arising in
a taxable year ending during 2001 and 2002
must be carried back to each of the 5 tax-
able years preceding the taxable year of
such NOL, unless the taxpayer elects to
forgo the carryback period entirely under
§172(b)(3), or elects under§172(j) to forgo
the 5-year carryback period in favor of a
2-year carryback period. In addition,§172
provides special rules (including different
carryback periods) for certain net operat-
ing losses, such as specified liability losses,
casualty losses, and net operating losses in-
curred by real estate investment trusts and
farming businesses.
.05 Section 1212 generally provides that
if a corporation has a net CL for any tax-
able year, the net CL generally must be car-
ried back to each of the 3 taxable years
preceding the taxable year of the CL.
.06 Rev. Proc. 2002–37 provides the ex-
clusive procedures for certain corpora-
tions to obtain automatic approval of the
Commissioner to change their annual ac-
counting periods. Rev. Proc. 2002–37 modi-
2003–18 I.R.B.856May 5, 2003

fies, amplifies, and supersedes Rev. Proc.
2000–11, 2000–1 C.B. 309.
.07 Rev. Proc. 2002–39 provides the
general procedures for establishing a busi-
ness purpose and obtaining the approval of
the Commissioner to adopt, change, or re-
tain an annual accounting period in cases
where the taxpayer does not meet the re-
quirements for using an automatic approval
revenue procedure.
.08 Section 6.08 of Rev. Proc. 2002–37
provides, as a term and condition for au-
tomatic approval, that a corporation gen-
erally is prohibited from carrying back an
NOL or CL generated in the short period
(the“Original Carryback Term and Con-
dition”). The Original Carryback Term and
Condition, however, is not imposed if the
NOL or CL either (1) is $50,000 or less;
or (2) results from a short period of 9
months or longer and is less than the NOL
or CL for the 12-month period beginning
with the first day of the short period. Sec-
tion 5.04(6) of Rev. Proc. 2002–39 also im-
poses the Original Carryback Term and
Condition for prior approval of a change in
annual accounting period. Moreover, the
Service has imposed a similar term and con-
dition in consent letters issued prior to Rev.
Proc. 2002–39. The purpose of the Origi-
nal Carryback Term and Condition is to pre-
vent artificial distortions of income from
NOLs and CLs that are generated in the
short period.
.09 The Service has determined that the
purpose of the Original Carryback Term and
Condition would not be frustrated if the ex-
ception to that term were expanded to in-
clude short periods of less than 9 months,
provided that the NOL or CL generated in
such short period were less than the NOL
or CL for the 12-month period beginning
with the first day of the short period.
.10 In an effort to provide relief to tax-
payers who may have been economically
disadvantaged by the events of Septem-
ber 11, 2001, the Service is also permit-
ting certain taxpayers who received approval
to change an annual accounting period for
which the short period began on or after
February 1, 2000, and whose short period
loss would have qualified for the expanded
exception, to carry back an NOL or CL gen-
erated in the short period.
SECTION 3. SCOPE
.01In General. This revenue proce-
dure generally applies to any taxpayer that
requests to change the taxpayer’s annual ac-
counting period under Rev. Proc. 2002–37
or Rev. Proc. 2002–39.
.02Prior Accounting Period Changes.
This revenue procedure also applies to any
taxpayer if:
(1) prior to April 8, 2003, the taxpayer
either filed an application for automatic ap-
proval to change the taxpayer’s annual ac-
counting period under Rev. Proc. 2002–37
(or any predecessor), or received prior ap-
proval to change its annual accounting pe-
riod by a letter issued by the national office
(whether or not issued under Rev. Proc.
2002–39);
(2) the administrative procedure, letter
ruling, or consent letter under which the tax-
payer made the change, as a term and con-
dition of the change, prohibited the taxpayer
from carrying back an NOL or CL gener-
ated in the short period because the short
period was less than 9 months;
(3) the NOL or CL generated in the short
period is less than the NOL or CL for the
full 12-month period beginning with the first
day of the short period; and
(4) the short period necessary to effect
the change began on or after February 1,
2000.
SECTION 4. MODIFIED
CARRYBACK TERM AND
CONDITION
.01 Section 6.08 of Rev. Proc. 2002–37
and section 5.04(6) of Rev. Proc. 2002–39
are modified to read as follows:
“If the taxpayer generates a net operat-
ing loss (NOL) or capital loss (CL) in the
short period required to effect a change in
annual accounting period, the taxpayer may
not carry the NOL or CL back, but must
carry it over in accordance with the pro-
visions of§§172 and 1212, respectively, be-
ginning with the first taxable year after the
short period. However, except as other-
wise provided in the Code or regulations,
the short period NOL or CL must be car-
ried back or carried over in accordance with
§172 or 1212, respectively, if it is either:
(a) $50,000 or less; or (b) less than the NOL
or CL, respectively, generated for the full
12-month period beginning with the first
day of the short period. The taxpayer must
wait until this 12-month period has ex-
pired to determine whether the taxpayer
qualifies for the exception in (b) above.”
.02 A taxpayer that is eligible to carry
back an NOL and wishes to forego the car-
ryback of such NOL must do so by mak-
ing a timely election to waive the entire
carryback period under§172(b)(3), or have
in place an election under§1502–
21(b)(3)(ii)(B).
SECTION 5. OPTIONAL TERMS AND
CONDITIONS FOR TAXPAYERS
WITH PRIOR ACCOUNTING PERIOD
CHANGES
.01In General. Pursuant to the Com-
missioner’s authority under§442 to pre-
scribe terms and conditions necessary to
effect a change in annual accounting pe-
riod, this section provides that a taxpayer
described in section 3.02 of this revenue
procedure may elect to apply to all NOLs
and CLs attributable to the short period, in
lieu of the Original Carryback Term and
Condition, either: (a) the Modified Carry-
back Term and Condition of section 4.01
of this revenue procedure (see section 5.02
of this revenue procedure); or (b) if the
short period ends during 2001 or 2002, the
Alternative Carryback Term and Condi-
tion (see section 5.03 of this revenue pro-
cedure). Unless such a taxpayer satisfies the
applicable requirements of section 6 of this
revenue procedure for timely electing one
of the optional carryback terms and con-
ditions described in this section 5, the Origi-
nal Carryback Term and Condition will
continue to apply. A taxpayer with both an
NOL and a CL for the short period must ap-
ply the same term and condition (Origi-
nal, Modified, or Alternative) to both the
NOL and CL.
.02Modified Carryback Term and Con-
dition. A taxpayer described in section 3.02
of this revenue procedure may elect to ap-
ply the Modified Carryback Term and Con-
dition of section 4.01 of this revenue
procedure by following the procedures set
forth in section 6 of this revenue proce-
dure. Thus, if a taxpayer elects to apply the
Modified Carryback Term and Condition,
NOLs and CLs generated in the short pe-
riod must be carried back in accordance
with§172 or 1212, whichever applies, ex-
cept as otherwise provided in the Code or
regulations. For example, an NOL gener-
ated in a short period ending in 2001 gen-
erally must be carried back 5 taxable years
under§172(b)(1)(H), and an NOL gener-
ated in a short period ending in 2000 gen-
erally must be carried back 2 taxable years
under§172(b)(1)(A)(i) (unless one of the
special carryback periods or limitations of
§172 applies).
May 5, 20038572003–18 I.R.B.

.03Alternative Carryback Term and
Condition.
(1)In general. If a taxpayer described
in section 3.02 of this revenue procedure
has a short period that ends in 2001 or
2002, the taxpayer may elect to apply the
Alternative Carryback Term and Condi-
tion of this section 5.03, in lieu of either
the Original Carryback Term and Condi-
tion or the Modified Term and Condition,
by following the procedures set forth in sec-
tion 6 of this revenue procedure.
(2)Alternative Carryback Term and
Condition. If the taxpayer generates an NOL
or CL in the short period required to ef-
fect a change in annual accounting pe-
riod, and the short period ends in 2001 or
2002, the taxpayer may not carry the NOL
or CL back, but must carry it over in ac-
cordance with the provisions of§§172 and
1212, respectively, beginning with the first
taxable year after the short period. How-
ever, if the short period NOL or CL is
either: (a) $50,000 or less; or (b) less than
the NOL or CL, respectively, generated for
the full 12-month period beginning with the
first day of the short period, such short pe-
riod NOL must be carried back to each of
the 2 taxable years preceding the short pe-
riod (and any remaining NOL must be car-
ried over in accordance with the provisions
of§172) and any short period CL must be
carried back or carried over in accordance
with§1212. The taxpayer must wait un-
til the 12-month period has expired to de-
termine whether the taxpayer qualifies for
the exception in (b) above.
(3)Other limitations. The Alternative
Carryback Term and Condition is not avail-
able to a taxpayer whose NOL for the short
period is subject to the provisions of:
(a)§172(b)(1)(B) (regarding NOLs of
real estate investment trusts);
(b)§172(b)(1)(C) (regarding speci-
fied liability losses);
(c)§172(b)(1)(E) (regarding certain ex-
cess interest losses);
(d)§172(b)(1)(F) (regarding a certain
3-year carryback in certain cases); or
(e)§172(b)(1)(G) (regarding farming
losses).
.04Special Elections for Consolidated
Groups. This paragraph 5.04 applies to a
taxpayer that is a consolidated group that:
(1) is described in section 3.02 of this
revenue procedure;
(2) includes a member that was a mem-
ber of another group immediately before it
became a member of the consolidated group
(acquired member); and
(3) elects either the Modified Carry-
back Term and Condition of section 4.01
of this revenue procedure, or the Alterna-
tive Carryback Term and Condition of sec-
tion 5.03 of this revenue procedure.
A consolidated group to which this para-
graph applies may make an irrevocable
election to relinquish, with respect to all
consolidated net operating losses for the
short period attributable to the acquired
member, the portion of the carryback pe-
riod for such loss for which the acquired
member was a member of another group to
the extent such portion of the carryback pe-
riod includes one or more taxable years that
are prior to the taxable year that is 2 tax-
able years preceding the taxable year of the
loss. Additionally, if an acquired member
became a member of the consolidated group
to which this paragraph applies after June
25, 1999, the consolidated group may make
an irrevocable election to relinquish, with
respect to all consolidated net operating
losses for the short period attributable to the
acquired member, the entire portion of the
carryback period for which the acquired
member was a member of another group.
The elections described in the prior 2 sen-
tences may be made only if any other cor-
poration joining the consolidated group that
was affiliated with the acquired member im-
mediately before it joined the consolidated
group is also included in the election. The
elections are made by following the pro-
cedures set forth in section 6 of this rev-
enue procedure.
SECTION 6. PROCEDURES FOR
ELECTING OPTIONAL TERMS AND
CONDITIONS OF SECTION 5.
.01Time and Manner for Making Elec-
tions
(1)In general. The election to apply ei-
ther the Modified Carryback Term and Con-
dition of section 4.01 of this revenue
procedure, or the Alternative Carryback
Term and Condition of section 5.03 of this
revenue procedure, must be made on a
statement filed with the appropriate Inter-
nal Revenue Service Center in accordance
with the procedures described in this sec-
tion 6.01. A taxpayer wishing to make one
of the Special Elections for Consolidated
Groups under section 5.04 of this revenue
procedure must make such election with the
election to apply either the Modified Car-
ryback Term and Condition of section 4.01
of this revenue procedure or the Alterna-
tive Carryback Term and Condition of sec-
tion 5.03.
(2)Time for making election. An elec-
tion to apply either the Modified Carry-
back Term and Condition or the Alternative
Carryback Term and Condition in lieu of
the Original Carryback Term and Condi-
tion must be made no later than Septem-
ber 30, 2003. The Special Elections for
Consolidated Groups of section 5.04 of this
revenue procedure must be made concur-
rently with the election to apply either the
Modified Carryback Term and Condition or
the Alternative Carryback Term and Con-
dition.
(3)Manner of making elections.
(a)What to file. A taxpayer may elect to
apply either the Modified Carryback Term
and Condition or the Alternative Carry-
back Term and Condition, and may make
one of the Special Elections for Consoli-
dated Groups, by filing with the appropri-
ate Internal Revenue Service Center on or
before September 30, 2003, whichever of
the following statements applies. The state-
ments must be signed and dated by the
taxpayer, the taxpayer’s authorized repre-
sentative, or other person authorized to bind
the taxpayer with respect to federal in-
come tax matters.
(i)Election to apply Modified Carry-
back Term and Condition of section 4.01:
“ELECTION UNDER REVENUE
PROCEDURE 2003–34. By this statement,
[insert taxpayer name and EIN or SSN]
elects to apply the Modified Carryback
Term and Condition of section 4.01 of Rev.
Proc. 2003–34 to any net operating loss and
capital loss arising in a short taxable year
ending [insert date short taxable year
ended]. Under the Modified Carryback Term
and Condition, net operating losses and
capital losses arising in the short taxable
year must be carried back and carried over
in accordance with the applicable provi-
sions of sections 172 and 1212 of the
Code.”;or
(ii)Election to apply Alternative Car-
ryback Term and Condition of section 5.03:
“ELECTION UNDER REVENUE
PROCEDURE 2003–34. By this statement,
[insert taxpayer name and EIN or SSN]
elects to apply the Alternative Carryback
Term and Condition of section 5.03 of Rev.
Proc. 2003–34 to any net operating loss and
capital loss arising in a short taxable year
2003–18 I.R.B.858May 5, 2003

ending [insert date short taxable year
ended]. Under the Alternative Carryback
Term and Condition, any net operating loss
arising in this short taxable year must be
carried back to each of the 2 taxable years
preceding the short taxable year (and any
remaining net operating loss must be car-
ried over in accordance with the provi-
sions of section 172 of the Code) and any
capital loss arising in this short taxable year
must be carried back or carried over in ac-
cordance with section 1212.”
(iii)Special elections for consolidated
groups. A consolidated group that wishes
to make one of the elections under sec-
tion 5.04 of this revenue procedure (ac-
quiring group) must attach one of the
following statements to the election to ap-
ply the Modified Carryback Term and Con-
dition or the Alternative Carryback Term
and Condition:
“SPECIAL ELECTION TO WAIVE
PRE-ACQUISITION EXTENDED CAR-
RYBACK PERIOD. This is an election un-
der section 5.04 of Rev. Proc. 2003–34 to
waive the pre[insert the first day of the first
taxable year for which the acquired mem-
ber (or members) was a member of the tax-
payer’s consolidated group (acquiring
group)] extended carryback period for the
consolidated NOLs attributable to [insert
name and employer identification num-
ber of acquired member (or members)] for
the [short period].”;or
“SPECIAL ELECTION TO WAIVE
ENTIRE PRE-ACQUISITION CARRY-
BACK PERIOD. This is an election un-
der section 5.04 of Rev. Proc. 2003–34 to
waive the pre[insert the first day of the first
taxable year for which the acquired mem-
ber (or members) was a member of the tax-
payer’s consolidated group (acquiring
group)] carryback period for the consoli-
dated NOLs attributable to [insert name and
employer identification number of acquired
member (or members)] for the [short pe-
riod].”
(b)Where to file. A taxpayer electing to
apply either the Modified Carryback Term
and Condition or the Alternative Carry-
back Term and Condition must file the ap-
propriate statement(s) with the Director,
Internal Revenue Service Center, Attention:
ENTITY CONTROL, where the taxpayer
files its federal income tax return. No cop-
ies of any statements are required to be sent
to the National Office.
(c)Statements not claims for refunds.
The statements described in section
6.01(3)(a) do not constitute claims for re-
fund or applications for tentative refunds.
A taxpayer electing to apply either the
Modified Carryback Term and Condition or
the Alternative Carryback Term and Con-
dition by filing a statement in compliance
with the procedures of this section 6.01
must additionally file a claim for refund or
application for tentative refund within the
periods prescribed by statute to carry back
any short period NOL or CL. The taxpayer
must attach a copy of the statement filed
under these procedures to any claim for re-
fund or application for tentative refund filed
as a result of the making of an election un-
der this revenue procedure.
.02Election Constitutes Taxpayer’s
Agreement. An election made in accor-
dance with this section constitutes an agree-
ment between the taxpayer and the Service
to modify the terms and conditions for the
Commissioner’s approval of the taxpay-
er’s change in annual accounting period. An
election to apply either the Modified Car-
ryback Term and Condition or the Alter-
native Carryback Term and Condition does
not revoke a valid election described in
§172(b)(3), Reg.§1.1502–21(b)(3)(ii)(B)
or Reg.§1.1502–21T.
SECTION 7. EFFECT ON OTHER
DOCUMENTS
Rev. Proc. 2002–37 and Rev. Proc.
2002–39 are modified.
SECTION 8. EFFECTIVE DATES AND
TRANSITION RULE
.01Applications Filed Under Rev. Proc.
2002–37. For a taxpayer within the scope
of Rev. Proc. 2002–37:
(1)In general. This revenue procedure
is effective for all changes in annual ac-
counting periods for which the first effec-
tive year (as defined in section 5.07 of Rev.
Proc. 2002–37) ends on or after April 8,
2003; and
(2)Transition rule.If the first effec-
tive year (as defined in section 5.07 of Rev.
Proc. 2002–37) ends before April 8, 2003,
and the time for filing Form 1128 with re-
spect to that first effective year expires on
or after April 8, 2003, (whether or not a
Form 1128 was filed before that date with
the Service Center), a taxpayer may elect
to use one of the optional carryback terms
and conditions of section 5 of this rev-
enue procedure by following the proce-
dures of section 6 of this revenue procedure.
.02Applications Filed Under Rev. Proc.
2002–39.For a taxpayer within the scope
of Rev. Proc. 2002–39:
(1)In general. This revenue procedure
is effective for applications filed on or af-
ter April 8, 2003; and
(2)Transition rule. If a taxpayer filed an
application to change the taxpayer’s an-
nual accounting period before April 8, 2003,
and the application is pending with the na-
tional office on April 8, 2003, the tax-
payer may request that the application be
processed in accordance with this revenue
procedure. However, the national office will
process applications filed before April 8,
2003, in accordance with prior authority un-
less, prior to the later of June 9, 2003, or
the issuance of the letter ruling granting or
denying consent to the adoption, change, or
retention, the taxpayer notifies the national
office that the taxpayer desires that the tax-
payer’s application be processed in accor-
dance with this revenue procedure.
.03Taxpayers With Prior Accounting Pe-
riod Changes. For a taxpayer described in
section 3.02 of this revenue procedure, this
revenue procedure is effective for changes
in the taxpayer’s annual accounting pe-
riod if the short period necessary to ef-
fect the change began on or after February
1, 2000.
DRAFTING INFORMATION
The principal authors of this revenue
procedure are Roy A. Hirschhorn and
Michael Schmit of the Office of Associ-
ate Chief Counsel (Income Tax and
Accounting). For further information re-
garding this revenue procedure, contact
Mr. Hirschhorn or Mr. Schmit at (202) 622–
4960 (not a toll-free call).
Industry Issue Resolution
Program
Rev. Proc. 2003–36
SECTION 1. PURPOSE
This revenue procedure describes pro-
cedures for business taxpayers, industry as-
sociations, and other interested parties to
submit issues for consideration under the
Internal Revenue Service’s Industry Issue
Resolution (IIR) Program. The objective of
May 5, 20038592003–18 I.R.B.

the IIR Program is to identify frequently
disputed or burdensome tax issues that are
common to a significant number of busi-
ness taxpayers that may be resolved through
published or other administrative guid-
ance. Resolving issues through prefiling
guidance rather than postfiling examina-
tion is a goal of the Internal Revenue Ser-
vice and the Office of Chief Counsel. The
Large and Mid-Size Business Division and
the Small Business and Self Employed Di-
vision of the Service share operational re-
sponsibility for the IIR Program.
SECTION 2. BACKGROUND
In Notice 2000–65, 2000–2 C.B. 599, the
Service announced the Industry Issue Reso-
lution Pilot Program. The objective of the
pilot program was to establish a proce-
dure to address frequently disputed tax is-
sues that are common to a significant
number of large or mid-size business tax-
payers through prefiling guidance rather
than postfiling examination. After evalu-
ating the success of the pilot program, the
Service announced in Notice 2002–20,
2002–1 C.B. 796, that the IIR Program
would be made permanent. In addition, No-
tice 2002–20 expanded the IIR Program to
address issues common to small businesses,
as well as large and mid-size businesses,
and to address opportunities to reduce bur-
den for all business taxpayers.
SECTION 3. SCOPE
.01Issues appropriate for the program.
The issues most appropriate for consid-
eration under the IIR Program generally will
have two or more of the following
characteristics:
(1) The proper tax treatment of a com-
mon factual situation is uncertain.
(2) The uncertainty results in frequent,
and often repetitive, examinations of the
same issue.
(3) The uncertainty results in taxpayer
burden.
(4) The issue is significant and im-
pacts a large number of taxpayers, either
within an industry or across industry lines.
(5) The issue requires extensive fac-
tual development, and an understanding of
industry practices and views concerning the
issue would assist the Service in determin-
ing the proper tax treatment.
.02Issues not appropriate for the pro-
gram.
The following issues are not appropri-
ate for consideration under the IIR Program:
(1) Issues that are unique to one or a
small number of taxpayers.
(2) Issues that are primarily under the
jurisdiction of Operating Divisions of the
Service other than the LMSB and SB/SE
Divisions.
(3) Issues that involve transactions that
lack abona fidebusiness purpose, or trans-
actions with a significant purpose of im-
properly reducing or avoiding federal taxes.
(4) Issues that involve transfer pricing
or international tax treaties.
SECTION 4. RECOMMENDATION
AND SELECTION PROCESS
.01Recommendation process.
The LMSB and SB/SE Divisions will re-
view and evaluate the issues submitted un-
der the IIR Program and, if appropriate,
may recommend that an issue be included
on the Treasury Department’s and the Ser-
vice’s Guidance Priority List for the up-
coming year or on periodic updates to the
Guidance Priority List. The Guidance Pri-
ority List sets forth the published guid-
ance that the Service expects to issue during
the plan year. Inclusion of an IIR item on
the Guidance Priority List does not, how-
ever, guarantee that the Service will issue
published guidance on the item.
Interested parties may submit issues at
any time during the year. The LMSB and
SB/SE Divisions will review and evalu-
ate the issues submitted under the IIR Pro-
gram at least semi-annually, generally after
March 31 and August 31 of each year. Ad-
ditionally, the LMSB and SB/SE Divi-
sions will review issues submitted by May
15, 2003, to determine whether to recom-
mend those issues for inclusion on the
2003–2004 Guidance Priority List.
.02Selection process.
A recommendation under this revenue
procedure does not guarantee that the is-
sue will be selected for inclusion on the
Guidance Priority List or included on a pe-
riodic update of the Guidance Priority List.
In deciding whether to include issues rec-
ommended by the LMSB Division or
SB/SE Division under this revenue proce-
dure for inclusion on the Guidance Prior-
ity List, the Office of Chief Counsel and the
Treasury Department will consider, among
other things, recommendations from other
sources, and whether the requested guid-
ance promotes sound tax administration.
An LMSB or SB/SE representative will
notify the submitter when a decision has
been made whether to include an issue on
the Guidance Priority List or on a peri-
odic update. A public announcement on the
issues reviewed under the IIR Program and
selected for the Guidance Priority List or
a periodic update will be issued at least an-
nually. The announcement will include the
name of the officials to contact for infor-
mation regarding the selected issues.
SECTION 5. GUIDANCE FOR
SELECTED ISSUES
Guidance on selected issues may be in
the form of published guidance, such as a
regulation, revenue ruling, revenue proce-
dure, or notice, prepared by the appropri-
ate Office of the Associate Chief Counsel.
In some situations, the guidance may re-
quire taxpayers to file a request for a change
in method of accounting before changing
the manner in which they treat the issue.
Published guidance issued under the IIR
Program is available on the Digital Daily
atwww.irs.gov.Selected issues also may be
addressed in administrative guidance, such
as an Internal Revenue Manual provision.
SECTION 6. ADDITIONAL
INFORMATION ABOUT THE IIR
PROGRAM
.01IIR team.
If an issue submitted under the IIR Pro-
gram is selected as a published guidance
project, the Service will establish a team
(the IIR team) to provide assistance in ana-
lyzing the issue. IIR team members will in-
clude appropriate personnel from the LMSB
and SB/SE Divisions, Appeals, the Office
of Chief Counsel, and the Treasury De-
partment.
.02Requests for information or meet-
ing.
An IIR team may request that the sub-
mitter or other business taxpayers volun-
tarily meet with the Service, provide
information, or provide an opportunity for
the Service to review books and records to
assist in the development of the issue. These
activities are not for the purpose of exami-
nation or inspection within the meaning of
section 7605(b).
.03Disclosure of information.
2003–18 I.R.B.860May 5, 2003

The Service encourages interested par-
ties to submit information that will assist
the Service and the Treasury Department in
reaching an appropriate resolution of the is-
sue. Submissions and any additional infor-
mation provided may be subject to
disclosure under the Freedom of Informa-
tion Act. All submissions made under the
IIR Program will be made available for
public inspection and copying in their en-
tirety. Therefore, submissions should not in-
clude confidential or taxpayer specific
information.
SECTION 7. SUBMITTING ISSUES
UNDER THE PROGRAM
.01No required format.
An issue submitted for consideration un-
der the IIR Program is not required to be
submitted in a particular format. The sub-
mission should, however, include an is-
sue statement, a description of why the issue
is appropriate for the IIR Program, an ex-
planation of the need for guidance, the es-
timated number of taxpayers affected by the
issue, and the name and telephone num-
ber of a person to contact if additional in-
formation is needed. The submission may
also include a recommendation as to how
the issue may be resolved.
.02Where to submit issues.
Interested parties should submit issues
by e-mail toIIR@irs.gov.Alternatively, sub-
missions may be mailed or faxed to:
Internal Revenue Service
Office of Prefiling and Technical
Services
Large and Mid-Size Business Division
LM:PFT
Mint Building 3
rd
Floor M3–420
1111Constitution Avenue, NW
Washington, DC 20224
Fax: 202–283–8406
SECTION 8. EFFECT ON OTHER
DOCUMENTS
This revenue procedure supersedes No-
tice 2002–20.
SECTION 9. EFFECTIVE DATE
This revenue procedure is effective April
17, 2003.
SECTION 10. PAPERWORK
REDUCTION ACT
The collections of information contained
in this revenue procedure have been re-
viewed and approved by the Office of Man-
agement and Budget in accordance with the
Paperwork Reduction Act (44 U.S.C. 3507)
under control number 1545–1837.
An agency may not conduct or spon-
sor, and a person is not required to re-
spond to, a collection of information unless
the collection of information displays a valid
OMB control number.
The collections of information in this
revenue procedure are in Sections 6 and 7.
This information is required to submit a re-
quest for the Service to consider an issue
under the IIR Program. This information
will be used to enable the Service to de-
termine whether the issue is suitable for de-
termination under the IIR Program. The
collections of information are voluntary to
obtain a benefit. The likely respondents are
business or other for profit institutions.
The estimated total annual reporting bur-
den is 2,000 hours.
The estimated annual burden per re-
spondent varies from 4 hours to 200 hours,
depending on individual circumstances, with
an estimated average of 40 hours. The es-
timated number of respondents is 50.
The estimated annual frequency of re-
sponses is on occasion.
Books or records relating to a collec-
tion of information must be retained as long
as their contents may become material in
the administration of any internal revenue
law. Generally tax returns and tax return in-
formation are confidential, as required by
26 U.S.C. 6103.
SECTION 11. CONTACT
INFORMATION
The principal author of this revenue pro-
cedure is Donna Welch of the Office of As-
sociate Chief Counsel (Procedure and
Administration), Administrative Provi-
sions and Judicial Practice Division.
Ms. Welch may be contacted at (202) 622–
4910 (not a toll-free number). For infor-
mation regarding the IIR Program, please
contact Susan Blake, Senior Program Ana-
lyst, of the LMSB Prefiling and Techni-
cal Services Office at (202) 283–8414 (not
a toll-free number) between the hours of
9:00 AM–5:00 PM, Eastern Time, Mon-
day through Friday.
May 5, 20038612003–18 I.R.B.

Part IV. Items of General Interest
Deletions From Cumulative
List of Organizations
Contributions to Which are
Deductible Under Section 170
of the Code
Announcement 2003–26
The name of an organization that no
longer qualifies as an organization described
in section 170(c)(2) of the Internal Rev-
enue Code of 1986 is listed below.
Generally, the Service will not disal-
low deductions for contributions made to
a listed organization on or before the date
of announcement in the Internal Revenue
Bulletin that an organization no longer
qualifies. However, the Service is not pre-
cluded from disallowing a deduction for any
contributions made after an organization
ceases to qualify under section 170(c)(2) if
the organization has not timely filed a suit
for declaratory judgment under section 7428
and if the contributor (1) had knowledge of
the revocation of the ruling or determina-
tion letter, (2) was aware that such revo-
cation was imminent, or (3) was in part
responsible for or was aware of the activi-
ties or omissions of the organization that
brought about this revocation.
If on the other hand a suit for declara-
tory judgment has been timely filed, con-
tributions from individuals and organizations
described in section 170(c)(2) that are oth-
erwise allowable will continue to be de-
ductible. Protection under section 7428(c)
would begin on October 28, 2002, and
would end on the date the court first de-
termines that the organization is not de-
scribed in section 170(c)(2) as more
particularly set forth in section 7428(c)(1).
For individual contributors, the maximum
deduction protected is $1,000, with a hus-
band and wife treated as one contributor.
This benefit is not extended to any indi-
vidual, in whole or in part, for the acts or
omissions of the organization that were the
basis for revocation.
Clinica Materno Infantil Plaza 3030, Inc.
Hollywood, FL
Section 7428(c) Validation of
Certain Contributions Made
During Pendency of
Declaratory Judgment
Proceedings
Announcement 2003–27
This announcement serves notice to po-
tential donors that the organization listed be-
low has recently filed a timely declaratory
judgment suit under section 7428 of the
Code, challenging revocation of its status
as an eligible donee under section 170(c)(2).
Protection under section 7428(c) of the
Code begins on the date that the notice of
revocation is published in the Internal Rev-
enue Bulletin and ends on the date on which
a court first determines that an organiza-
tion is not described in section 170(c)(2),
as more particularly set forth in section
7428(c)(1). In the case of individual con-
tributors, the maximum amount of contri-
butions protected during this period is
limited to $1,000.00, with a husband and
wife being treated as one contributor. This
protection is not extended to any indi-
vidual who was responsible, in whole or in
part, for the acts or omissions of the orga-
nization that were the basis for the revo-
cation. This protection also applies (but
without limitation as to amount) to orga-
nizations described in section 170(c)(2)
which are exempt from tax under section
501(a). If the organization ultimately pre-
vails in its declaratory judgment suit, de-
ductibility of contributions would be subject
to the normal limitations set forth under sec-
tion 170.
Clinica Materno Infantil Plaza 3030, Inc.
Hollywood, FL
2003–18 I.R.B.862May 5, 2003

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:
Amplifieddescribes 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
withmodified, below).
Clarifiedis 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.
Modifiedis 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 pub-
lished position. (Compare withamplified
andclarified, above).
Obsoleteddescribes 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.
Revokeddescribes situations where the
position in the previously published rul-
ing is not correct and the correct position
is being stated in the new ruling.
Supersededdescribes 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
andsupersededdescribes 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.
Supplementedis 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 rul-
ings in the series.
Suspendedis 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 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.
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.
May 5, 2003i2003–18 I.R.B.

Numerical Finding List
1
Bulletins 2003–1 through 2003–17
Announcements:
2003–1, 2003–2 I.R.B.281
2003–2, 2003–3 I.R.B.301
2003–3, 2003–4 I.R.B.361
2003–4, 2003–5 I.R.B.396
2003–5, 2003–5 I.R.B.397
2003–6, 2003–6 I.R.B.450
2003–7, 2003–6 I.R.B.450
2003–8, 2003–6 I.R.B.451
2003–9, 2003–7 I.R.B.490
2003–10, 2003–7 I.R.B.490
2003–11, 2003–10 I.R.B.585
2003–12, 2003–10 I.R.B.585
2003–13, 2003–11 I.R.B.603
2003–14, 2003–11 I.R.B.603
2003–15, 2003–11 I.R.B.605
2003–16, 2003–12 I.R.B.641
2003–17, 2003–15 I.R.B.722
2003–18, 2003–13 I.R.B.675
2003–19, 2003–15 I.R.B.723
2003–20, 2003–15 I.R.B.750
2003–21, 2003–17 I.R.B.846
2003–22, 2003–17 I.R.B.846
2003–23, 2003–16 I.R.B.808
2003–24, 2003–16 I.R.B.810
2003–25, 2003–17 I.R.B.846
Notices:
2003–1, 2003–2 I.R.B.257
2003–2, 2003–2 I.R.B.257
2003–3, 2003–2 I.R.B.258
2003–4, 2003–3 I.R.B.294
2003–5, 2003–3 I.R.B.294
2003–6, 2003–3 I.R.B.298
2003–7, 2003–4 I.R.B.310
2003–8, 2003–4 I.R.B.310
2003–9, 2003–5 I.R.B.369
2003–10, 2003–5 I.R.B.369
2003–11, 2003–6 I.R.B.422
2003–12, 2003–6 I.R.B.422
2003–13, 2003–8 I.R.B.513
2003–14, 2003–8 I.R.B.515
2003–15, 2003–9 I.R.B.540
2003–16, 2003–10 I.R.B.575
2003–17, 2003–12 I.R.B.633
2003–18, 2003–14 I.R.B.699
2003–19, 2003–14 I.R.B.703
2003–21, 2003–17 I.R.B.817
2003–23, 2003–17 I.R.B.821
Proposed Regulations:
REG–209500–86, 2003–2 I.R.B.262
REG–104385–01, 2003–12 I.R.B.634
REG–116641–01, 2003–8 I.R.B.518
REG–125638–01, 2003–5 I.R.B.373
REG–126016–01, 2003–7 I.R.B.486
REG–126485–01, 2003–9 I.R.B.542
REG–103580–02, 2003–9 I.R.B.543
REG–124069–02, 2003–7 I.R.B.488
REG–131478–02, 2003–13 I.R.B.669
Proposed Regulations—Continued:
REG–138882–02, 2003–8 I.R.B.522
REG–139768–02, 2003–10 I.R.B.583
REG–141097–02, 2003–16 I.R.B.807
REG–151043–02, 2003–3 I.R.B.300
REG–164464–02, 2003–2 I.R.B.262
Revenue Procedures:
2003–1, 2003–1 I.R.B.1
2003–2, 2003–1 I.R.B.76
2003–3, 2003–1 I.R.B.113
2003–4, 2003–1 I.R.B.123
2003–5, 2003–1 I.R.B.163
2003–6, 2003–1 I.R.B.191
2003–7, 2003–1 I.R.B.233
2003–8, 2003–1 I.R.B.236
2003–9, 2003–8 I.R.B.516
2003–10, 2003–2 I.R.B.259
2003–11, 2003–4 I.R.B.311
2003–12, 2003–4 I.R.B.316
2003–13, 2003–4 I.R.B.317
2003–14, 2003–4 I.R.B.319
2003–15, 2003–4 I.R.B.321
2003–16, 2003–4 I.R.B.359
2003–17, 2003–6 I.R.B.427
2003–18, 2003–6 I.R.B.439
2003–19, 2003–5 I.R.B.371
2003–20, 2003–6 I.R.B.445
2003–21, 2003–6 I.R.B.448
2003–22, 2003–10 I.R.B.577
2003–23, 2003–11 I.R.B.599
2003–24, 2003–11 I.R.B.599
2003–25, 2003–11 I.R.B.601
2003–26, 2003–13 I.R.B.666
2003–27, 2003–13 I.R.B.667
2003–28, 2003–16 I.R.B.759
2003–30, 2003–17 I.R.B.822
2003–31, 2003–17 I.R.B.838
2003–32, 2003–16 I.R.B.803
2003–33, 2003–16 I.R.B.803
Revenue Rulings:
2003–1, 2003–3 I.R.B.291
2003–2, 2003–2 I.R.B.251
2003–3, 2003–2 I.R.B.252
2003–4, 2003–2 I.R.B.253
2003–5, 2003–2 I.R.B.254
2003–6, 2003–3 I.R.B.286
2003–7, 2003–5 I.R.B.363
2003–8, 2003–3 I.R.B.290
2003–9, 2003–4 I.R.B.303
2003–10, 2003–3 I.R.B.288
2003–11, 2003–3 I.R.B.285
2003–12, 2003–3 I.R.B.283
2003–13, 2003–4 I.R.B.305
2003–14, 2003–4 I.R.B.302
2003–15, 2003–4 I.R.B.302
2003–16, 2003–6 I.R.B.401
2003–17, 2003–6 I.R.B.400
2003–18, 2003–7 I.R.B.467
2003–19, 2003–7 I.R.B.468
2003–20, 2003–7 I.R.B.465
2003–21, 2003–8 I.R.B.509
2003–22, 2003–8 I.R.B.494
Revenue Rulings—Continued:
2003–23, 2003–8 I.R.B.511
2003–24, 2003–10 I.R.B.557
2003–25, 2003–13 I.R.B.642
2003–26, 2003–10 I.R.B.563
2003–27, 2003–11 I.R.B.597
2003–28, 2003–11 I.R.B.594
2003–29, 2003–11 I.R.B.587
2003–30, 2003–13 I.R.B.659
2003–31, 2003–13 I.R.B.643
2003–32, 2003–14 I.R.B.689
2003–33, 2003–13 I.R.B.642
2003–34, 2003–17 I.R.B.813
2003–35, 2003–14 I.R.B.687
2003–37, 2003–15 I.R.B.717
2003–38, 2003–17 I.R.B.811
2003–39, 2003–17 I.R.B.811
2003–40, 2003–17 I.R.B.813
2003–41, 2003–17 I.R.B.814
2003–42, 2003–16 I.R.B.754
Treasury Decisions:
9024, 2003–5 I.R.B.365
9025, 2003–5 I.R.B.362
9026, 2003–5 I.R.B.366
9027, 2003–6 I.R.B.413
9028, 2003–6 I.R.B.415
9029, 2003–6 I.R.B.403
9030, 2003–8 I.R.B.495
9031, 2003–8 I.R.B.504
9032, 2003–7 I.R.B.471
9033, 2003–7 I.R.B.483
9034, 2003–7 I.R.B.453
9035, 2003–9 I.R.B.528
9036, 2003–9 I.R.B.533
9037, 2003–9 I.R.B.535
9038, 2003–9 I.R.B.524
9039, 2003–10 I.R.B.561
9040, 2003–10 I.R.B.568
9041, 2003–8 I.R.B.510
9042, 2003–10 I.R.B.564
9043, 2003–12 I.R.B.611
9044, 2003–14 I.R.B.690
9045, 2003–12 I.R.B.610
9046, 2003–12 I.R.B.614
9047, 2003–14 I.R.B.676
9048, 2003–13 I.R.B.644
9049, 2003–14 I.R.B.685
9050, 2003–14 I.R.B.693
9051, 2003–16 I.R.B.755
1
A cumulative list of all revenue rulings, revenue
procedures, Treasury decisions, etc., published in
Internal Revenue Bulletins 2002–26 through 2002–52 is
in Internal Revenue Bulletin 2003–1, dated January 6, 2003.
2003–18 I.R.B.iiMay 5, 2003

Finding List of Current Actions
on Previously Published Items
2
Bulletins 2003–1 through 2003–17
Notices:
97–19
Modified by
Rev. Proc. 2003–1, 2003–1 I.R.B.1
2001–26
Obsoleted by
T.D. 9032, 2003–7 I.R.B.471
2001–46
Modified by
Notice 2003–6, 2003–3 I.R.B.298
2001–69
Modified and superseded by
Notice 2003–1, 2003–2 I.R.B.257
2002–27
Clarified by
Notice 2003–3, 2003–2 I.R.B.258
2002–40
Modified by
Ann. 2003–18, 2003–13 I.R.B.675
2002–46
Modified by
Notice 2003–10, 2003–5 I.R.B.369
Proposed Regulations:
REG–209500–86
Corrected by
Ann. 2003–6, 2003–6 I.R.B.450
REG–103829–99
Corrected by
Ann. 2003–12, 2003–10 I.R.B.585
REG–126485–01
Withdrawn by
REG–126485–01, 2003–9 I.R.B.542
Corrected by
Ann. 2003–25, 2003–17 I.R.B.846
REG–131478–02
Corrected by
Ann. 2003–24, 2003–16 I.R.B.810
REG–143321–02
Corrected by
Ann. 2003–12, 2003–10 I.R.B.585
REG–164464–02
Corrected by
Ann. 2003–6, 2003–6 I.R.B.450
Revenue Procedures:
83–23
Supplemented by
Rev. Proc. 2003–21, 2003–6 I.R.B.448
Revenue Procedures—Continued:
84–37
Modified by
Rev. Proc. 2003–1, 2003–1 I.R.B.1
93–38
Obsoleted by
Rev. Proc. 2003–15, 2003–4 I.R.B.321
97–31
Modified by
Rev. Proc. 2003–9, 2003–8 I.R.B.516
98–13
Obsoleted by
T.D. 9032, 2003–7 I.R.B.471
2002–1
Superseded by
Rev. Proc. 2003–1, 2003–1 I.R.B.1
2002–2
Superseded by
Rev. Proc. 2003–2, 2003–1 I.R.B.76
2002–3
Superseded by
Rev. Proc. 2003–3, 2003–1 I.R.B.113
2002–4
Superseded by
Rev. Proc. 2003–4, 2003–1 I.R.B.123
2002–5
Superseded by
Rev. Proc. 2003–5, 2003–1 I.R.B.163
2002–6
Superseded by
Rev. Proc. 2003–6, 2003–1 I.R.B.191
2002–7
Superseded by
Rev. Proc. 2003–7, 2003–1 I.R.B.233
2002–8
Superseded by
Rev. Proc. 2003–8, 2003–1 I.R.B.236
2002–9
Modified and amplified by
Rev. Proc. 2003–20, 2003–6 I.R.B.445
Rev. Rul. 2003–3, 2003–2 I.R.B.252
2002–20
Supplemented by
Rev. Proc. 2003–26, 2003–13 I.R.B.666
2002–22
Modified by
Rev. Proc. 2003–3, 2003–1 I.R.B.113
2002–29
Modified by
Rev. Proc. 2003–10, 2003–2 I.R.B.259
2002–51
Superseded by
Rev. Proc. 2003–31, 2003–17 I.R.B.838
Revenue Procedures—Continued:
2002–52
Modified by
Rev. Proc. 2003–1, 2003–1 I.R.B.1
2002–53
Superseded by
Rev. Proc. 2003–30, 2003–17 I.R.B.822
2002–57
Superseded by
Rev. Proc. 2003–28, 2003–16 I.R.B.759
2002–67
Supplemented by
Ann. 2003–3, 2003–4 I.R.B.361
2002–75
Superseded by
Rev. Proc. 2003–3, 2003–1 I.R.B.113
2003–3
Amplified by
Rev. Proc. 2003–14, 2003–4 I.R.B.319
2003–7
Corrected by
Ann. 2003–4, 2003–5 I.R.B396
Revenue Rulings:
53–131
Modified by
Rev. Rul. 2003–12, 2003–3 I.R.B.283
57–190
Obsoleted by
Rev. Rul. 2003–18, 2003–7 I.R.B.467
65–190
Revoked by
Rev. Rul. 2003–3, 2003–2 I.R.B.252
66–118
Distinguished by
Rev. Rul. 2003–41, 2003–17 I.R.B.814
69–372
Revoked by
Rev. Rul. 2003–3, 2003–2 I.R.B.252
92–19
Supplemented in part by
Rev. Rul. 2003–24, 2003–10 I.R.B.557
2003–2
Revoked by
Rev. Rul. 2003–22, 2003–8 I.R.B.494
Treasury Decisions:
9002
Corrected by
Ann. 2003–8, 2003–6 I.R.B.451
9021
Corrected by
Ann. 2003–16, 2003–12 I.R.B.641
2
A cumulative list of current actions on previously
published items in Internal Revenue Bulletins
2002–26 through 2002–52 is in Internal Revenue
Bulletin 2003–1, dated January 6, 2003.
May 5, 2003iii2003–18 I.R.B.

Treasury Decisions—Continued:
9022
Supplemented by
Ann. 2003–7, 2003–6 I.R.B.450
Corrected by
Ann. 2003–11, 2003–10 I.R.B.585
9048
Corrected by
Ann. 2003–23, 2003–16 I.R.B.808
2003–18 I.R.B.ivMay 5, 2003

INDEX
Internal Revenue Bulletins
2003–1 through 2003–17
The abbreviation and number in paren-
thesis following the index entry refer to
the specific item; numbers in roman and
italic type following the parenthesis refer
to the Internal Revenue Bulletin in which
the item may be found and the page num-
ber on which it appears.
Key to Abbreviations:
AnnAnnouncement
CDCourt Decision
DODelegation Order
EOExecutive Order
PLPublic Law
PTEProhibited Transaction
Exemption
RPRevenue Procedure
RRRevenue Ruling
SPRStatement of Procedural
Rules
TCTax Convention
TDTreasury Decision
TDOTreasury Department Order
EMPLOYEE PLANS
Address for filing certain elections, state-
ments, returns and other documents
(Notice 19) 14,703
Advance letter rulings and determination
letters, areas which will not be issued
from:
Associates Chief Counsel and Division
Counsel/Associate Chief Counsel
(TE/GE) (RP 3) 1,113
Associate Chief Counsel (Interna-
tional) (RP 7) 1,233; correction
(Ann 4) 5,396
Contacts with third parties for determina-
tion or collection of taxes (TD 9028)
6,415
Defined benefit plans, required minimum
distributions (Notice 2) 2,257
Determination letters:
Form 5310 revised (Ann 13) 11,603
Issuing procedures (RP 6) 1,191
Employee stock ownership plans, delayed
effective date, abuse (RR 6) 3,286
EMPLOYEE PLANS—
Cont.
Form 5310, Application for Determina-
tion for Terminating Plan, revised (Ann
13) 11,603
Full funding limitations, weighted aver-
age interest rate for:
January 2003 (Notice 7) 4,310
February 2003 (Notice 14) 8,515
March 2003 (Notice 17) 12,633
April 2003 (Notice 23) 17,821
Individual retirement arrangements:
Deemed IRAs (RP 13) 4,317
Required minimum distributions
(Notice 3) 2,258
Letter rulings:
Determination letters and information
letters issued by Associates Chief
Counsel and Division Counsel/
Associate Chief Counsel (TE/GE)
(RP 1) 1,1
Information letters, etc. (RP 4) 1,123
Limitation on annual compensation, non-
discrimination (RR 11) 3,285
Nondiscrimination:
Cash balance plans (Ann 22) 17,846
Governmental plans (Notice 6) 3,298
Practice before the Internal Revenue Ser-
vice (Ann 5) 5,397
Proposed Regulations:
26 CFR 1.401(a)(4)–3,–9, revised;
1.411(b)–2, revised; reductions of
accruals and allocations because of
the attainment of any age; applica-
tion of nondiscrimination cross-
testing rules to cash balance plans
(REG–209500–86, REG–164464–
02) 2,262; correction (Ann 6)
6,450
Qualified retirement plans:
Age discrimination (REG–209500–86,
REG–164464–02) 2,262; correc-
tion (Ann 6) 6,450
Definition of early retirement benefits
and retirement-type subsidies, con-
tingent benefits (Notice 10) 5,369
Distributions, rollover, waiver of
60-day requirement (RP 16) 4,359
Loans to participants or beneficiaries
under section 72(p) (Ann 16) 12,
641
Minimum distributions, delayed
amendment date (RP 10) 2,259
EMPLOYEE PLANS—
Cont.
Regulations:
26 CFR 1.72(p)–1; loans from a quali-
fied employer plan to plan partici-
pants or beneficiaries (TD 9021);
correction (Ann 16) 12,641
26 CFR 301.7602–2, added; third
party contacts (TD 9028) 6,415
Technical advice:
Proposed cash balance regulations,
age discrimination issues (Ann 1)
2,281
To directors and chiefs, appeals
offices, from Associates Chief
Counsel and Division Counsel/
Associate Chief Counsel (TE/GE)
(RP 2) 1,76
To IRS employees (RP 5) 1,163
Time for performance of acts when last
day falls on Saturday, Sunday, or legal
holiday (RR 41) 17,814
User fees, request for letter rulings (RP 8)
1,236
EMPLOYMENT TAX
Address for filing certain elections, state-
ments, returns and other documents
(Notice 19) 14,703
Contacts with third parties for determina-
tion or collection of taxes (TD 9028)
6,415
Disclosure of returns and return informa-
tion by other agencies (TD 9036) 9,
533
Levy restrictions during installment
agreements (TD 9027) 6,413
Practice before the Internal Revenue Ser-
vice (Ann 5) 5,397
Publications:
1223, General Rules and Specifica-
tions for Substitute Forms W–2c and
W–3c, revised (RP 31) 17,838
1441, General Rules and Specifica-
tions for Substitute Forms W–2 and
W–3, revised (RP 30) 17,822
Regulations:
26 CFR 31.6011–4, added; 31.6011–
4T, removed; tax shelter regulations
(TD 9046) 12,614
26 CFR 301.6103(p)(2)(B)–1, added;
301.6103(p)(2)(B)–1T, removed;
602.101, amended; disclosure of
returns and return information by
other agencies (TD 9036) 9,533
May 5, 2003v2003–18 I.R.B.

EMPLOYMENT TAX—
Cont.
26 CFR 301.6331–3,–4, added; levy
restrictions during installment agree-
ments (TD 9027) 6,413
26 CFR 301.7602–2, added; third
party contacts (TD 9028) 6,415
Substitute forms:
W–2 and W–3, general rules and
specifications (RP 30) 17,822
W–2c and W–3c, general rules and
specifications (RP 31) 17,838
Tax shelter regulations (TD 9046) 12,
614
Time for performance of acts when last
day falls on Saturday, Sunday, or legal
holiday (RR 41) 17,814
ESTATE TAX
Address for filing certain elections, state-
ments, returns and other documents
(Notice 19) 14,703
Contacts with third parties for determina-
tion or collection of taxes (TD 9028)
6,415
Disclosure of returns and return informa-
tion by other agencies (TD 9036) 9,
533
Levy restrictions during installment
agreements (TD 9027) 6,413
Life insurance, taxation for Louisiana
decedents (RR 40) 17,813
Practice before the Internal Revenue Ser-
vice (Ann 5) 5,397
Regulations:
26 CFR 20.6011–4, added; 20.6011–
4T, removed; tax shelter regulations
(TD 9046) 12,614
26 CFR 301.6103(p)(2)(B)–1, added;
301.6103(p)(2)(B)–1T, removed;
602.101, amended; disclosure of
returns and return information by
other agencies (TD 9036) 9,533
26 CFR 301.6331–3,–4, added; levy
restrictions during installment agree-
ments (TD 9027) 6,413
26 CFR 301.7602–2, added; third
party contacts (TD 9028) 6,415
Tax shelter regulations (TD 9046) 12,
614
Time for performance of acts when last
day falls on Saturday, Sunday, or legal
holiday (RR 41) 17,814
EXCISE TAX
Address for filing certain elections, state-
ments, returns and other documents
(Notice 19) 14,703
Communication services, distance sensi-
tivity (REG–141097–02) 16,807
Contacts with third parties for determina-
tion or collection of taxes (TD 9028)
6,415
Diesel fuel, blended taxable fuel (TD
9051) 16,755
Disclosure of returns and return informa-
tion by other agencies (TD 9036) 9,
533
Highway vehicle, definition; correction
(Ann 12) 10,585
Insurance premium excise tax, liability
for (TD 9024) 5,365
Levy restrictions during installment
agreements (TD 9027) 6,413
Practice before the Internal Revenue Ser-
vice (Ann 5) 5,397
Proposed Regulations:
26 CFR 41.4482(a)–1; 48.4041–8;
48.4051–1; 48.4072–1; 48.4081–1;
48.6421–4; 145.4051–1; definition
of highway vehicle (REG–103829–
99); correction (Ann 12) 10,585
26 CFR 49.4252–0, added; communi-
cations services, distance sensitivity
(REG–141097–02) 16,807
26 CFR Part 157, added; excise tax on
structured settlement factoring trans-
actions (REG–139768–02) 10,583
Regulations:
26 CFR 40.6302(c)–3, amended;
48.4041–21, amended; 48.4081–1,
–3, amended; 48.6427–8(d),
amended; 49.4291–1, amended; die-
sel fuel, blended taxable fuel (TD
9051) 16,755
26 CFR 46.4374–1, revised; liability
for insurance premium excise tax
(TD 9024) 5,365
26 CFR 53.6011–4, added; 53.6011–
4T, removed; 54.6011–4, added;
54.6011–4T, removed; 56.6011–4,
added; 56.6011–4T, removed; tax
shelter regulations (TD 9046) 12,
614
26 CFR 301.6103(p)(2)(B)–1, added;
301.6103(p)(2)(B)–1T, removed;
602.101, amended; disclosure of
returns and return information by
other agencies (TD 9036) 9,533
EXCISE TAX—Cont.
26 CFR 301.6331–3,–4, added; levy
restrictions during installment agree-
ments (TD 9027) 6,413
26 CFR 301.7602–2, added; third
party contacts (TD 9028) 6,415
26 CFR Part 157, added; 602.101,
amended; excise tax on structured
settlement factoring transactions
(TD 9042) 10,564
Scholarship grants by employer-related
private foundations, victim of qualified
disaster (RR 32) 14,689
Structured settlement factoring transac-
tions (TD 9042) 10,564; (REG–
139768–02) 10,583
Tax shelter regulations (TD 9046) 12,
614
Time for performance of acts when last
day falls on Saturday, Sunday, or legal
holiday (RR 41) 17,814
EXEMPT
ORGANIZATIONS
Address for filing certain elections, state-
ments, returns and other documents
(Notice 19) 14,703
Advance letter rulings and determination
letters, areas which will not be issued
from Associates Chief Counsel and
Division Counsel/Associate Chief
Counsel (TE/GE) (RP 3) 1,113
Contacts with third parties for determina-
tion or collection of taxes (TD 9028)
6,415
Dissolution clause requirements for sec-
tion 501(c)(3) entities seeking a section
115(1) letter ruling (RP 12) 4,316
Form 990, Return of Organization
Exempt From Income Tax, U.S. posses-
sions, relief from filing (RP 21) 6,448
Letter rulings:
Determination letters and information
letters issued by Associates Chief
Counsel and Division Counsel/
Associate Chief Counsel (TE/GE)
(RP 1) 1,1
Information letters, etc. (RP 4) 1,123
List of organizations classified as private
foundations (Ann 10) 7,490; (Ann 14)
11,603; (Ann 20) 15,750
Practice before the Internal Revenue Ser-
vice (Ann 5) 5,397
Private foundations, termination, transfer
of assets (RR 13) 4,305
2003–18 I.R.B.viMay 5, 2003

EXEMPT
ORGANIZATIONS—
Cont.
Regulations:
26 CFR 301.7602–2, added; third
party contacts (TD 9028) 6,415
Scholarship grants by employer-related
private foundations, victim of qualified
disaster (RR 32) 14,689
Tax shelter regulations (TD 9046) 12,
614
Technical advice to:
Directors and chiefs, appeals offices,
from Associates Chief Counsel and
Division Counsel/Associate Chief
Counsel (TE/GE) (RP 2) 1,76
IRS employees (RP 5) 1,163
Time for performance of acts when last
day falls on Saturday, Sunday, or legal
holiday (RR 41) 17,814
U.S. possessions, relief from filing Form
990 (RP 21) 6,448
User fees, request for letter rulings (RP 8)
1,236
GIFT TAX
Address for filing certain elections, state-
ments, returns and other documents
(Notice 19) 14,703
Contacts with third parties for determina-
tion or collection of taxes (TD 9028) 6,
415
Disclosure of returns and return informa-
tion by other agencies (TD 9036) 9,
533
Practice before the Internal Revenue Ser-
vice (Ann 5) 5,397
Regulations:
26 CFR 25.6011–4, added; 25.6011–
4T, removed; tax shelter regulations
(TD 9046) 12,614
26 CFR 301.6103(p)(2)(B)–1, added;
301.6103(p)(2)(B)–1T, removed;
602.101, amended; disclosure of
returns and return information by
other agencies (TD 9036) 9,533
26 CFR 301.7602–2, added; third
party contacts (TD 9028) 6,415
Tax shelter regulations (TD 9046) 12,
614
Time for performance of acts when last
day falls on Saturday, Sunday, or legal
holiday (RR 41) 17,814
INCOME TAX
Accounting, application of normalization
accounting rules to balances of excess
deferred income taxes and accumulated
deferred investment tax credits (REG–
104385–01) 12,634
Accrual of income (RR 10) 3,288
Accuracy-related penalty, defenses avail-
able to the imposition (REG–126016–
01) 7,486
Address for filing certain elections, state-
ments, returns and other documents
(Notice 19) 14,703
Advance letter rulings and determination
letters, areas which will not be issued
from:
Associates Chief Counsel and Division
Counsel/Associate Chief Counsel
(TE/GE) (RP 3) 1,113
Associate Chief Counsel (Interna-
tional) (RP 7) 1,233; correction
(Ann 4) 5,396
Advance Pricing Agreement (APA) pro-
gram for 2002 (Ann 19) 15,723
Basis of redeemed stock when a distribu-
tion in redemption of stock is treated as
a dividend (Ann 9) 7,490
Capital expenditures, rotable spare parts,
depreciable assets (RR 37) 15,717
Capitalization of amounts paid to acquire,
create, or enhance intangible assets
(REG–125638–01) 5,373
Census Bureau, disclosure of tax informa-
tion (TD 9037) 9,535
Charitable contributions; patents (RR 28)
11,594
Combat zone personnel, tax relief (Notice
21) 17,817
Consolidated income tax return, common
parent as agent for consolidated group,
substitute agent, tentative carryback
adjustments (Ann 8) 6,451
Constructive sales:
Short sales, transition rule (RR 31) 13,
643
Treatment for appreciated financial
positions (RR 1) 3,291
Contacts with third parties for determina-
tion or collection of taxes (TD 9028)
6,415
Contingent liability transaction cases, list
of arbitrators (Ann 3) 4,361
Corporations:
Acquisitions:
Auto dealer expansion (RR 18) 7,
467
INCOME TAX—Cont.
Retail shoe store expansion (RR 38)
17,811
Foreign tax credit limitation, dividends
from a noncontrolled section 902
corporation (Notice 5) 3,294
S corporation, employee stock owner-
ship plan (ESOP):
Basis (RR 27) 11,597
IRA rollovers and S corporation
election (RP 23) 11,599
Statutory mergers and consolidations
(TD 9038) 9,524; (REG–126485–
01) 9,542; correction (Ann 25) 17,
846
Transactions involving deemed sale of
corporate assets under section 338,
new Form 8883 (Ann 2) 3,301
Cost-share payments, Agricultural Man-
agement Assistance Program (AMA)
(RR 15) 4,302
Costa Rican withholding taxes, noncredit-
ability (RR 8) 3,290
Credits:
Adoption credit (Notice 15) 9,540
Earned income credit, update (TD
9045) 12,610
Education tax credit (TD 9034) 7,
453
Foreign taxpayers, disallowance of
deductions and credits for failure to
file timely return (TD 9043) 12,
611
Low-income housing credit:
2003 population figures used for
calculation (Notice 16) 10,575
Satisfactory bond,“bond factor”
amounts for the period:
January through March 2003 (RR
2) 2,251; correction (RR 22)
8,494
New markets tax credit (RR 20) 7,
465; extension of deadline (Notice
9) 5,369
Damages for willful violations of the sec-
tion 363 automatic stay or the section
524 discharge provisions of the Bank-
ruptcy Code (TD 9050) 14,693
Disaster relief:
For taxpayers affected by the Septem-
ber 11, 2001, terrorist attack, exten-
sion for estates (Ann 18) 13,675
Payments, businesses (Notice 18) 14,
699
May 5, 2003vii2003–18 I.R.B.

INCOME TAX—Cont.
Disciplinary actions involving attorneys,
certified public accountants, enrolled
agents, and enrolled actuaries (Ann 15)
11,605
Disclosure of returns and return informa-
tion by other agencies (TD 9036) 9,
533
Election to treat trust as part of an estate
(TD 9032) 7,471
Electronic tax administration, guidance to
facilitate (TD 9040) 10,568
Estimated tax, application of the addition
to the tax for underpayment (RR 23) 8,
511
Exclusion of gain from the sale or
exchange of a principal residence (TD
9030) 8,495
Family day care, deduction of business
expenses, standard meal rates (RP 22)
10,577
Foreign personal holding company
income, commodities hedging and
interest-bearing liabilities (TD 9039)
10,561
Forms:
1096, 1098, 1099, 5498, W–2G, and
1042S, substitute form specifica-
tions (RP 28) 16,759
8023, extension to file election under
section 338 for certain acquisitions
(RP 33) 16,803
8883, Asset Allocation Statement
Under Section 338, new (Ann 2) 3,
301
Fuel costs, overrecovered (RR 39) 17,
811
Information reporting:
On Form 1099–B for securities futures
contracts (Notice 8) 4,310
Payment card transactions, information
reporting and backup withholding
(REG–116641–01) 8,518
Requirements for qualified tuition and
related expenses under section
6059S, filing information returns on
magnetic media (TD 9029) 6,403
Taxable stock transactions, corporate
reorganizations, brokers (Ann 11)
10,585
Transition rules for acquisitions of
control and substantial changes in
capital structure (Ann 7) 6,450
Innocent spouse relief, nonrequesting
spouse administrative appeal rights (RP
19) 5,371
INCOME TAX—Cont.
Insurance companies:
Corporate reorganization and mergers,
demutualization (RR 19) 7,468
Determination of effectively connected
income of foreign insurance compa-
nies (RR 17) 6,400
Interest rate tables (RR 24) 10,557
Loss payment patterns and discount
factors for the 2002 accident year
(RP 17) 6,427
Recomputed differential earnings rate
for 2000 and the differential earn-
ings rate for 2001 for mutual life
insurance companies (RR 4) 2,253
Salvage discount factors for the 2002
accident year (RP 18) 6,439
Interest:
Investment:
Federal short-term, mid-term, and
long-term rates for:
January 2003 (RR 5) 2,254
February 2003 (RR 16) 6,401
March 2003 (RR 26) 10,563
April 2003 (RR 35) 14,687
Rates:
Underpayments and overpayments,
quarter beginning:
April 1, 2003 (RR 30) 13,659
Inventory:
LIFO, price indexes used by depart-
ment stores for:
November 2002 (RR 9) 4,303
December 2002 (RR 21) 8,509
January 2003 (RR 33) 13,642
February 2003 (RR 42) 16,754
Valuation of vehicle parts cores (RP
20) 6,445
Leave-based donation programs (Notice
1) 2,257
Letter rulings, determination letters and
information letters issued by Associates
Chief Counsel and Division Counsel/
Associate Chief Counsel (TE/GE) (RP
1) 1,1
Levy restrictions during installment
agreements (TD 9027) 6,413
LIFO recapture installment payments
(Notice 4) 3,294
Loss transactions, exceptions (RP 24) 11,
599
Low-income taxpayer clinics, income tax
return preparer (TD 9026) 5,366
Methods of accounting, nonaccrual expe-
rience (NAE) method (Notice 12) 6,
422
INCOME TAX—Cont.
Noncompensatory partnership options
(REG–103580–02) 9,543
Offshore Voluntary Compliance Initiative
(RP 11) 4,311
Partnerships:
Basis adjustments upon the sale of a
corporate partner’s stock (TD 9049)
14,685
Regulated investment companies (RP
32) 16,803
Section 6038, returns required with
respect to controlled foreign partner-
ships (TD 9033) 7,483; (REG–
124069–02) 7,488
Practice before the Internal Revenue Ser-
vice (Ann 5) 5,397
Presidentially declared disaster or combat
zone:
Combat zone personnel, tax relief
(Notice 21) 17,817
Gross income, disaster relief payments
(RR 12) 3,283
Major disaster and emergency areas
list (RR 29) 11,587
Private activity bonds, 2003 population
figures used for calculation (Notice 16)
10,575
Private foundations, organizations now
classified as (Ann 10) 7,490; (Ann 14)
11,603; (Ann 20) 15,750
Proposed Regulations:
26 CFR 1.46–6, amended; 1.168(i)–3
added; application of normalization
accounting rules to balances of
excess deferred income taxes and
accumulated deferred investment tax
credits of public utilities whose gen-
eration assets cease to be public util-
ity property (REG–104385–01) 12,
634
26 CFR 1.61–8, revised; rents and roy-
alties (REG–151043–02) 3,300
26 CFR 1.121–3, amended; reduced
maximum exclusion of gain from
sale or exchange of principal resi-
dence (REG–138882–02) 8,522
26 CFR 1.167(a)–3, amended;
1.263(a)–4, added; 1.446–5, added;
guidance regarding deduction and
capitalization of expenditures
(REG–125638–01) 5,373
26 CFR 1.302–5, 1.304–3; redemp-
tions taxable as dividends (REG–
150313–01); correction (Ann 9) 7,
490
2003–18 I.R.B.viiiMay 5, 2003

INCOME TAX—Cont.
26 CFR 1.368–2, revised; statutory
mergers and consolidations (REG–
126485–01) 9,542; correction (Ann
25) 17,846
26 CFR 1.704–1,–3, amended;
1.721–2, added; 1.761–3, added;
1.1272–1, amended; 1.1273–2,
amended; 1.1275–4, amended; non-
compensatory partnership options
(REG–103580–02) 9,543
26 CFR 1.1502–21,–32, amended;
1.1502–35, added; guidance under
section 1502, suspension of losses
on certain stock dispositions (REG–
131478–02) 13,669; correction
(Ann 24) 16,810
26 CFR 1.6038–3, amended; returns
required with respect to controlled
foreign partnerships (REG–124069–
02) 7,488
26 CFR 1.6043–4; 1.6045–3; informa-
tion reporting relating to taxable
stock transactions (REG–143321–
02); correction (Ann 12) 10,585
26 CFR 1.6662–3, amended;
1.6664–0,–4, amended; establishing
defenses to the imposition of the
accuracy-related penalty (REG–
126016–01) 7,486
26 CFR 31.3406(g)–1, (j)–1, amended;
301.6724–1, amended; information
reporting and backup withholding
for payment card transactions
(REG–116641–01) 8,518
Publications:
538, Accounting Periods and Methods,
revised (Ann 17) 15,722
1179, General Rules and Specifica-
tions for Substitute Forms 1096,
1098, 1099, 5498, W–2G, and
1042–S (RP 28) 16,759
1223, General Rules and Specifica-
tions for Substitute Forms W–2c and
W–3c, revised (RP 31) 17,838
1441, General Rules and Specifica-
tions for Substitute Forms W–2 and
W–3, revised (RP 30) 17,822
Qualified census tracts, issuers of quali-
fied mortgage bonds and mortgage
credit certificates (RP 15) 4,321
Qualified Payment Card Agent (QPCA),
proposed revenue procedure to request
a determination (Notice 13) 8,513
INCOME TAX—Cont.
Regulations:
26 CFR 1.25A–0 through–5, added;
602.101, revised; education tax
credit (TD 9034) 7,453
26 CFR 1.32–2, amended; earned
income credit for taxable years
beginning after December 31, 1978
(TD 9045) 12,610
26 CFR 1.48–12, amended; 1.48–12T,
removed; 1.152–3, amended; 1.152–
3T, removed; 1.611–3, amended;
1.611–3T, removed; 1.852–9,
amended; 1.852–9T, removed;
301.6011–1, added; 301.6011–1T,
removed; 301.6903–1, amended;
301.6903–1T, removed; 602.101,
amended; guidance necessary to
facilitate electronic tax administra-
tion (TD 9040) 10,568
26 CFR 1.121–1 through–4, amended;
1.121–5, removed; 1.1398–3, added;
exclusion of gain from sale or
exchange of principal residence (TD
9030) 8,495
26 CFR 1.121–3T, added; reduced
maximum exclusion of gain from
sale or exchange of principal resi-
dence (TD 9031) 8,504
26 CFR 1.337(d)–5T, redesignated;
newly designated 1.337(d)–5,
amended; 1.337(d)–6, added;
1.337(d)–6T, removed; 1.337(d)–7,
added; 1.337(d)–7T, removed;
1.514(c)–2, amended; 602.101,
amended; certain transfers of prop-
erty to regulated investment compa-
nies (RICs) and real estate invest-
ment trusts (REITs) (TD 9047) 14,
676
26 CFR 1.368–2, revised; 1.368–2T,
added; statutory mergers and con-
solidations (TD 9038) 9,524
26 CFR 1.446–1, amended; 1.1502–
13, revised; intercompany transac-
tions: conforming amendments to
section 446 (TD 9025) 5,362
26 CFR 1.641(b)–3, amended;
1.642(c)–1,–6A, revised; 1.645–1,
added; 1.671–4, amended; 1.6012–3,
amended; 1.6072–1, amended;
301.6109–1, amended; 602.101,
amended; election to treat trust as
part of an estate (TD 9032) 7,471
INCOME TAX—Cont.
26 CFR 1.705–1,–2, amended; deter-
mination of basis of partner’s inter-
est, special rules (TD 9049) 14,685
26 CFR 1.874–1, revised; 1.874–1T,
removed; 1.882–4, revised; 1.882–
4T, removed; disallowance of
deductions and credits for failure to
file timely return (TD 9043) 12,
611
26 CFR 1.954–0,–2, amended; guid-
ance regarding the definition of for-
eign personal holding company
income (TD 9039) 10,561
26 CFR 1.1041–1T, amended;
1.1041–2, added; 602.101, amended;
constructive transfers and transfers
of property to a third party on behalf
of a spouse (TD 9035) 9,528
26 CFR 1.1502–21, amended; 1.1502–
21T, revised; 1.1502–32, amended;
1.1502–32T, revised; 1.1502–35T,
added; 602.101, amended; guidance
under section 1502; suspension of
losses on certain stock dispositions
(TD 9048) 13,644
26 CFR 1.1502–21T,–32T,–35T, cor-
rected; suspension of losses on cer-
tain stock dispositions (TD 9048)
13,644; correction (Ann 23) 16,
808
26 CFR 1.1502–77T, 602.101; agent
for consolidated group (TD 9002);
correction (Ann 8) 6,451
26 CFR 1.6011–4. added; 1.6011–4T,
removed; 301.6111–2, added;
301.6111–2T, removed; 301.6112–1,
added; 301.6112–1T, removed;
602.101, amended; tax shelter regu-
lations (TD 9046) 12,614
26 CFR 1.6038–3, amended; 1.6038–
3T, added; 602.101, amended;
returns required with respect to con-
trolled foreign partnerships (TD
9033) 7,483
26 CFR 1.6043–4T; information
reporting relating to taxable stock
transactions (TD 9022); correction
(Ann 11) 10,585
26 CFR 1.6050S–0, amended;
1.6050S–1, added; 301.6011–2,
amended; 602.101, amended; infor-
mation reporting for qualified tuition
and related expenses; magnetic
media filing requirements for infor-
mation returns (TD 9029) 6,403
May 5, 2003ix2003–18 I.R.B.

INCOME TAX—Cont.
26 CFR 31.3406(j)–1, amended;
31.3406(j)–1T, added; Taxpayer
Identification Number (TIN) Match-
ing Program (TD 9041) 8,510
26 CFR 301.6103(n)–1, revised;
602.101, amended; amendment to
incorporate Taxpayer Browsing Pro-
tection Act (TD 9044) 14,690
26 CFR 301.6103(j)(1)–1, revised;
301.6103(j)(1)–1T, removed; disclo-
sure of return information to the
Bureau of the Census (TD 9037) 9,
535
26 CFR 301.6103(p)(2)(B)–1, added;
301.6103(p)(2)(B)–1T, removed;
602.101, amended; disclosure of
returns and return information by
other agencies (TD 9036) 9,533
26 CFR 301.6331–3,–4, added; levy
restrictions during installment agree-
ments (TD 9027) 6,413
26CFR301.7426–2,added;
301.7430–1,–2,–3,–6, amended;
301.7430–8, added; 301.7433–1,
amended; 301.7433–2, added; civil
cause of action for damages caused
by unlawful tax collection actions,
including actions taken in violation
of section 362 or 524 of the Bank-
ruptcy Code (TD 9050) 14,693
26 CFR 301.7602–2, added; third
party contacts (TD 9028) 6,415
26 CFR 301.7701–15, amended; low-
income taxpayer clinics-definition of
income tax return preparer (TD
9026) 5,366
Rents and royalties, inclusion of advance
rentals in gross income (REG–151043–
02) 3,300
Reportable transactions, book-tax differ-
ences, exceptions (RP 25) 11,601
Sale or exchange of a principal residence,
reduced maximum exclusion of gain
(TD 9031) 8,504;REG–138882–02,
8,522
Scholarship grants by employer-related
private foundations, victim of qualified
disaster (RR 32) 14,689
Section 911(d)(4) waiver, 2002 update
(RP 26) 13,666
Soil and Water Conservation Assistance
Program (SWCA) (RR 14) 4,302
Special estimated tax payments, guidance
for discontinuing the deduction (RR
34) 17,813
INCOME TAX—Cont.
Standard Industry Fare Level (SIFL) for-
mula (RR 25) 13,642
State tax refunds, accrual of income (RR
3) 2,252
Stocks:
Determination and recognition of gain
or loss (RR 7) 5,363
Guidance under section 1502, suspen-
sion of losses on certain stock dispo-
sitions (TD 9048) 13,644; correc-
tion (Ann 23) 16,808; (REG–
131478–02) 13,669; correction
(Ann 24) 16,810
Redemptions by a spouse or former
spouse during marriage or incident
to divorce (TD 9035) 9,528
Substitute forms:
W–2 and W–3, general rules and
specifications (RP 30) 17,822
W–2c and W–3c, general rules and
specifications (RP 31) 17,838
1096, 1098, 1099, 5498, W–2G, and
1042S, rules and specifications (RP
28) 16,759
Tax conventions, Netherlands, treaty, pen-
sions (Ann 21) 17,846
Tax shelter registrations, effective date
(Notice 11) 6,422
Tax shelter regulations (TD 9046) 12,
614
Taxable stock transactions, corporate
reorganizations, brokers; correction
(Ann 12) 10,585
Taxicabs, information reporting for small
cash transactions (RP 27) 13,667
Taxpayer Browsing Protection Act, incor-
porated in amendment of 26 CFR
301.6103(n)(1) (TD 9044) 14,690
Taxpayer Indentification Number (TIN)
Matching Program:
Expanded to online matching for all
payors and authorized agents (RP 9)
8,516
Expansion (TD 9041) 8,510
Technical advice to:
Directors and chiefs, appeals offices,
from Associates Chief Counsel and
Divison Counsel/Associate Chief
Counsel (TE/GE) (RP 2) 1,76
IRS employees (RP 5) 1,163
Time for performance of acts when last
day falls on Saturday, Sunday, or legal
holiday (RR 41) 17,814
Timing rules of intercompany transaction
(TD 9025) 5,362
INCOME TAX—Cont.
Transfers of property, regulated invest-
ment companies (RICs) and real estate
investment trusts (REITs) (TD 9047)
14,676
Trusts for minors, Indian Gaming Regula-
tory Act (IGRA) (RP 14) 4,319
SELF-EMPLOYMENT
TAX
Address for filing certain elections, state-
ments, returns and other documents
(Notice 19) 14,703
Contacts with third parties for determina-
tion or collection of taxes (TD 9028) 6,
415
Levy restrictions during installment
agreements (TD 9027) 6,413
Practice before the Internal Revenue Ser-
vice (Ann 5) 5,397
Regulations:
26 CFR 301.6331–3,–4, added; levy
restrictions during installment agree-
ments (TD 9027) 6,413
26 CFR 301.7602–2, added; third
party contacts (TD 9028) 6,415
Time for performance of acts when last
day falls on Saturday, Sunday, or legal
holiday (RR 41) 17,814
2003–18 I.R.B.x*U.S. Government Printing Office: 2003—496–919/60081May 5, 2003