Internal Revenue Bulletin 1996-23 (PDF rendition): IRS Announcements

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

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Bulletin No. 1996–23
June 3, 1996
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
SPECIAL ANNOUNCEMENT
Announcement 96–54, page 12.
A public hearing will be held on July 24, 1996, on
proposed regulations relating, in part, to information
reporting and backup withholding under the Interest
and Dividend Tax Compliance Act of 1983.
INCOME TAX
T.D. 8662, page 5.
Final regulations under section 584 of the Code relate
to the diversification of common trust funds at the time
of a combination or division.
T.D. 8663, page 4.
Final regulations under section 351 of the Code relate
to transfers to investment companies.
T.D. 8669, page 6.
Final regulations under section 936 of the Code relate
to the computation of combined taxable income under
the profit split method.
EMPLOYEE PLANS
Announcement 96–53, page 12.
The application forms used to request determination
letters for qualified employee benefit plans have been
revised. Application forms having revision dates before
January 1, 1996, may be used until October 1, 1996.
EXEMPT ORGANIZATIONS
Announcement 96–55, page 12.
A list is given of organizations now classified as private
foundations.
Finding Lists begin on page 18.
Announcement of Disbarments and Suspensions begins on page 15.
Monthly Index for May begins on page 21.

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Mission of the Service
The purpose of the Internal Revenue Service is to
collect the proper amount of tax revenue at the least
cost; serve the public by continually improving the
quality of our products and services; and perform in a
manner warranting the highest degree of public
confidence in our integrity, efficiency and fairness.
Statement of Principles
of Internal Revenue
Tax Administration
The function of the Internal Revenue Service is to
administer the Internal Revenue Code. Tax policy
for raising revenue is determined by Congress.
With this in mind, it is the duty of the Service to
carry out that policy by correctly applying the laws
enacted by Congress; to determine the reasonable
meaning of various Code provisions in light of the
Congressional purpose in enacting them; and to
perform this work in a fair and impartial manner,
with neither a government nor a taxpayer point of
view.
At the heart of administration is interpretation of the
Code. It is the responsibility of each person in the
Service, charged with the duty of interpreting the
law, to try to find the true meaning of the statutory
provision and not to adopt a strained construction in
the belief that he or she is ‘‘protecting the revenue.’’
The revenue is properly protected only when we as-
certain and apply the true meaning of the statute.
The Service also has the responsibility of applying
and administering the law in a reasonable,
practical manner. Issues should only be raised by
examining officers when they have merit, never
arbitrarily or for trading purposes. At the same
time, the examining officer should never hesitate
to raise a meritorious issue. It is also important
that care be exercised not to raise an issue or to
ask a court to adopt a position inconsistent with
an established Service position.
Administration should be both reasonable and
vigorous. It should be conducted with as little
delay as possible and with great courtesy and
considerateness. It should never try to overreach,
and should be reasonable within the bounds of law
and sound administration. It should, however, be
vigorous in requiring compliance with law and it
should be relentless in its attack on unreal tax
devices and fraud.

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Introduction
The Internal Revenue Bulletin is the authoritative
instrument of the Commissioner of Internal Revenue for
announcing official rulings and procedures of the
Internal Revenue Service and for publishing Treasury
Decisions, Executive Orders, Tax Conventions, legisla-
tion, court decisions, and other items of general
interest. It is published weekly and may be obtained
from the Superintendent of Documents on a subscrip-
tion basis. Bulletin contents of a permanent nature are
consolidated semiannually into Cumulative Bulletins,
which are sold on a single-copy basis.
It is the policy of the Service to publish in the Bulletin
all substantive rulings necessary to promote a uniform
application of the tax laws, including all rulings that
supersede, revoke, modify, or amend any of those
previously published in the Bulletin. All published
rulings apply retroactively unless otherwise indicated.
Procedures relating solely to matters of internal
management are not published; however, statements of
internal practices and procedures that affect the rights
and duties of taxpayers are published.
Revenue rulings represent the conclusions of the
Service on the application of the law to the pivotal facts
stated in the revenue ruling. In those based on
positions taken in rulings to taxpayers or technical
advice to Service field offices, identifying details and
information of a confidential nature are deleted to
prevent unwarranted invasions of privacy and to comply
with statutory requirements.
Rulings and procedures reported in the Bulletin do not
have the force and effect of Treasury Department
Regulations, but they may be used as precedents.
Unpublished rulings will not be relied on, used, or cited
as precedents by Service personnel in the disposition of
other cases. In applying published rulings and proce-
dures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be
considered, and Service personnel and others con-
cerned are cautioned against reaching the same
conclusions in other cases unless the facts and
circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on
provisions of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows:
Subpart A, Tax Conventions, and Subpart B, Legislation
and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to
these subjects are contained in the other Parts and
Subparts. Also included in this part are Bank Secrecy
Act Administrative Rulings. Bank Secrecy Act Admin-
istrative Rulings are issued by the Department of the
Treasury’s Office of the Assistant Secretary
(Enforcement).
Part IV.—Items of General Interest.
With the exception of the Notice of Proposed Rulemak-
ing and the disbarment and suspension list included in
this part, none of these announcements are consoli-
dated in the Cumulative Bulletins.
The first Bulletin for each month includes an index for
the matters published during the preceding month.
These monthly indexes are cumulated on a quarterly
and semiannual basis, and are published in the first
Bulletin of the succeeding quarterly and semi-annual
period, respectively.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents U.S. Government Printing Office, Washington, D.C. 20402.

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Part I. Rulings and Decisions Under the Internal Revenue Code of 1986
Section 351.—Transfer to
Corporation Controlled by Transferor
26 CFR 1.351–1: Transfer to corporation
controlled by transferor.
T.D. 8663
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
Transfers to Investment Companies
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations.
SUMMARY: This document contains
final regulations amending regulations
under section 351(e) of the Internal
Revenue Code relating to transfers to
investment companies. The final reg-
ulations concern the treatment of cer-
tain transfers to a controlled corpora-
tion. Generally, the final regulations
amend the regulations to provide when
certain transfers will not cause a
diversification of the transferors’
interests.
EFFECTIVE DATE: These regulations
are effective May 2, 1996.
FOR FURTHER INFORMATION
CONTACT: Andrew M. Eisenberg,
(202) 622-7790 (not a toll-free
number).
SUPPLEMENTARY INFORMATION:
1.Background
This document contains final regula-
tions under section 351. The final
regulations provide for the treatment of
certain transfers to a controlled corpo-
ration. Section 351(a) provides that no
gain or loss will be recognized if one
or more persons transfer property to a
corporation solely in exchange for
stock in the corporation and imme-
diately after the exchange such person
or persons are in control of the
corporation. Section 351(e)(1) provides
that section 351(a) will not apply to a
transfer of property to an investment
company.
On August 10, 1995, the Federal
Register published a notice of pro-
posed rulemaking (CO–19–95), amend-
ing regulations under section 351 of the
Internal Revenue Code relating to
transfers of property to an investment
company (60 FR 40794). The proposed
rules were based on the conclusion that
transfers of diversified portfolios are
not inconsistent with the Congressional
purpose of section 351(e)(1).
2.Public Comments and the Final
Regulations
The IRS received comments from the
public on the proposed regulations. No
public hearing was requested and none
was held. The comments received were
generally supportive of the proposed
regulations. After consideration of all
the comments, the regulations proposed
by CO–19–95 are adopted as revised
by this Treasury decision. The principal
comments on the proposed regulations
are discussed below.
Government securities are not treated
as securities of an issuer for purposes
of the 25 and 50-percent tests. Several
commentators suggested that the final
regulations include specific assurance
that Government securities are not
treated as securities of an issuer in
applying the 25 and 50-percent tests
contained in section 368(a)(2)(F)(ii).
The proposed regulations generally
adopt the section 368(a)(2)(F)(ii) tests
for purposes of determining whether a
portfolio of stocks and securities is
diversified. However, the proposed reg-
ulations modify the 25 and 50-percent
tests of section 368(a)(2)(F)(ii) by
including Government securities in to-
tal assets (clause (iv) of section
368(a)(2)(F) excludes Government se-
curities from total assets for purposes
of the 25 and 50-percent tests in clause
(ii) of section 368(a)(2)(F)). The final
regulations clarify that Government
securities, while included in total as-
sets, are not treated as securities of an
issuer for purposes of the numerator of
the 25 and 50-percent tests of section
368(a)(2)(F)(ii).
The transfer of a diversified portfolio
of stocks and securities by any trans-
feror satisfies the modified diversifica-
tion test. One commentator suggested
that the final regulations should clarify
that any person, rather than corporate
transferors only, may satisfy the modi-
fied diversification test. The commenta-
tor is concerned that the use of the
section 368(a)(2)(F)(ii) tests, which are
adopted from a provision that applies
only to transfers by corporations, may
imply that the tests as applied in
section 351 are limited to corporate
transferors.
The Treasury and IRS do not intend
to limit application of the final regula-
tions solely to corporate transferors.
The final regulations provide that a
portfolio will be diversified if it satis-
fies the 25 and 50-percent tests of
section 368(a)(2)(F)(ii) (as modified),
rather than section 368(a)(2)(F)(ii),
generally.
Transfers of interests in real property
to an investment company. One com-
mentator suggested that the final reg-
ulations adopt a rule whereby transfers
of real property would not result in the
diversification of the transferors’ inter-
ests if each transferor transfers a
diversified portfolio of real property to
a Real Estate Investment Trust. The
subject of real property transfers is
beyond the scope of these final
regulations.
Retroactive effect of the final regula-
tions. Several commentators suggested
that the final regulations include a
retroactive effective date. The final
regulations allow taxpayers who trans-
fer diversified, but nonidentical, port-
folios of stocks and securities before
May 2, 1996, to choose to treat the
transfers consistent with the final reg-
ulations or as transfers resulting in
diversification. However, transfers
completed on or after May 2, 1996 are
subject to the final regulations.
Special Analyses
It has been determined that this
Treasury decision is not a significant
regulatory action as defined in EO
12866. Therefore, a regulatory assess-
ment is not required. It also has been
determined that section 553(b) of the
Administrative Procedure Act (5 U.S.C.
chapter 5) and the Regulatory Flex-
ibility Act (5 U.S.C. chapter 6) do not
apply to these regulations, and, there-
fore, a Regulatory Flexibility Analysis
is not required. Pursuant to section
7805(f) of the Internal Revenue Code,
the notice of proposed rulemaking
preceding these regulations was submit-

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ted to the Chief Counsel for Advocacy
of the Small Business Administration
for comment on its impact on small
business.
Drafting Information
The principal author of these regula-
tions is Andrew M. Eisenberg, Office
of Assistant Chief Counsel (Corporate),
IRS. However, other personnel from
the IRS and Treasury Department
participated in their development.
******
Adoption of Amendment to the
Regulations
Accordingly, 26 CAR part 1 is
amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 continues to read in part as
follows:
Authority: 26 U.S.C. 7805 ** *
Par. 2. Section 1.351–1 is amended
by:
1.Redesignating paragraph (c)(6) as
paragraph (c)(7).
2.Adding new paragraph (c)(6) to
read as set forth below.
§1.351–1 Transfer to corporation
controlled by transferor.
******
(c) * * *
(6)(i) For purposes of paragraph
(c)(5) of this section, a transfer of
stocks and securities will not be treated
as resulting in a diversification of the
transferors’ interests if each transferor
transfers a diversified portfolio of
stocks and securities. For purposes of
this paragraph (c)(6), a portfolio of
stocks and securities is diversified if it
satisfies the 25 and 50-percent tests of
section 368(a)(2)(F)(ii), applying the
r e l e v a n t p r o v i s i o n s o f s e c t i o n
368(a)(2)(F). However, Government se-
curities are included in total assets for
purposes of the denominator of the 25
and 50-percent tests (unless the Gov-
ernment securities are acquired to meet
the 25 and 50-percent tests), but are not
treated as securities of an issuer for
purposes of the numerator of the 25
and 50-percent tests.
(ii)Paragraph (c)(6)(i) of this sec-
tion is effective for transfers completed
on or after May 2, 1996. Transfers of
diversified (within the meaning of
paragraph (c)(6)(i) of this section), but
nonidentical, portfolios of stocks and
securities completed before May 2,
1996, may be treated either—
( A ) C o n s i s t e n t w i t h p a r a g r a p h
(c)(6)(i) of this section; or
(B)As resulting in diversification of
the transferors’ interests.
******
Margaret Milner Richardson,
Commissioner of Internal Revenue.
Approved March 6, 1996.
Leslie Samuels,
Assistant Secretary of Treasury.
(Filed by the Office of the Federal Register on
May 1, 1996, 8:45 a.m., and published in the
issue of the Federal Register for May 2, 1996,
61 F.R. 19544)
Section 584.—Common Trust Funds
26 CFR 1.584–4: Admission and withdrawal of
participants in the common trust fund.
T.D. 8662
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
Diversification of Common Trust
Funds
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations.
SUMMARY: This document contains
final regulations relating to the diver-
sification of common trust funds at the
time of a combination or division. The
final regulations affect common trust
funds and their participants.
EFFECTIVE DATE: May 2, 1996.
FOR FURTHER INFORMATION
CONTACT: Steven Schneider, (202)
622-3060 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
On August 10, 1995, a notice of
p r o p o s e d r u l e m a k i n g ( P S – 2 9 – 9 2
[1996–36 I.R.B. 32]) was published in
the Federal Register (60 FR 40796)
proposing amendments to the Income
Tax Regulations (26 CFR part 1) under
section 584 of the Internal Revenue
Code. Written comments responding to
this notice were received. No public
hearing was held because no hearing
was requested. After consideration of
all comments received, the proposed
regulations under section 584 are
adopted as revised by this Treasury
decision.
Explanation of Provisions
The final regulations modify the
diversification test applied to combin-
ing, dividing, and resulting common
trust funds at the time of a combination
or division. Under the existing regula-
tions, which incorporate the diversifica-
tion test of section 368(a)(2)(F)(ii),
Government securities are excluded in
determining total assets. These final
regulations modify the diversification
test so that Government securities are
included in determining total assets
when applying section 368(a)(2)(F)(ii).
This modified diversification test is
the same as that in the final regulations
under section 351(e), which deals with
transfers to investment companies.
These corresponding modifications en-
sure that a uniform diversification test
will be applied to common trust funds
and similar investment entities.
The final regulations also update the
regulations under section 584 to con-
form to changes in the law.
Changes to the Proposed Regulations
in Response to Comments
I.Clarification that Government
securities are not treated as
securities of an issuer
Two commentators suggested that
the final regulations include specific
assurance that Government securities
are not treated as securities of an issuer
in applying the 25 and 50-percent tests
contained in section 368(a)(2)(F)(ii) to
mergers and divisions of common trust
funds. The proposed regulations pro-
vide that Government securities are
included in total assets in applying the
25 and 50-percent tests to common
trust fund combinations and divisions,
but do not specifically state that
Government securities are not treated
as securities of an issuer. The final

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regulations clarify that Government
securities, while included in total as-
sets, are not treated as securities of an
issuer for purposes of the numerator of
the 25 and 50-percent tests of section
368(a)(2)(F)(ii).
II.Clarification of the definition of
Government securities
One commentator suggested that the
regulations broaden the definition of
the term Government securities to
include state and local government
obligations. The final regulations do
not adopt the suggestion.
Effective Date
These regulations apply to combina-
tions and divisions of common trust
funds completed on or after May 2,
1996.
Special Analyses
It has been determined that this
Treasury decision is not a significant
regulatory action as defined in EO
12866. Therefore, a regulatory assess-
ment is not required. It has also been
determined that section 553(b) of the
Administrative Procedure Act (5 U.S.C.
chapter 5) and the Regulatory Flex-
ibility Act (5 U.S.C. chapter 6) do not
apply to these regulations and, there-
fore, a Regulatory Flexibility Analysis
is not required. Pursuant to section
7805(f) of the Internal Revenue Code,
the notice of proposed rulemaking
preceding these regulations was submit-
ted to the Chief Counsel for Advocacy
of the Small Business Administration
for comment on its impact on small
business.
Drafting Information
The principal author of this regula-
tion is Brian J. O’Connor, formerly of
the Office of Assistant Chief Counsel
(Passthroughs and Special Industries).
However, other personnel from the IRS
and Treasury Department participated
in their development.
******
Adoption of Amendments to the
Regulations
Accordingly, 26 CFR part 1 is
amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 continues to read in part as
follows:
Authority: 26 U.S.C. 7805 ** *
§1.584–2 [Amended]
Par. 2. Section 1.584–2 is amended
by:
1.Removing paragraph (b)(1).
2.Removing the paragraph designa-
tion (b)(2).
Par. 3. Section 1.584–4 is amended
by:
1.Removing paragraphs (a)(1) and
(a)(2).
2.Removing the last sentence in
paragraph (a) and adding 6 sentences in
its place.
3.Adding paragraph (e).
The additions read as follows:
§1.584–4 Admission and withdrawal
of participants in the common trust
fund.
(a) * ** When a participating inter-
est is transferred by a bank, or by two
or more banks that are members of the
same affiliated group (within the mean-
ing of section 1504), as a result of the
combination of two or more common
trust funds or the division of a single
common trust fund, the transfer to the
surviving or divided fund is not consid-
ered to be an admission or a with-
drawal if the combining, dividing, and
resulting common trust funds have
diversified portfolios. For purposes of
this paragraph (a), a common trust fund
has a diversified portfolio if it satisfies
the 25 and 50-percent tests of section
368(a)(2)(F)(ii), applying the relevant
provisions of section 368(a)(2)(F).
However, Government securities are
included in total assets for purposes of
the denominator of the 25 and 50-
percent tests (unless the Government
securities are acquired to meet the 25
and 50-percent tests), but are not
treated as securities of an issuer for
purposes of the numerator of the 25
and 50-percent tests. In addition, for a
transfer of a participating interest in a
division of a common trust fund not to
be considered an admission or with-
drawal, each participant’s pro rata
interest in each of the resulting com-
mon trust funds must be substantially
the same as was the participant’s pro
rata interest in the dividing fund.
However, in the case of the division of
a common trust fund maintained by
two or more banks that are members of
the same affiliated group resulting from
the termination of such affiliation, the
division will be treated as meeting the
requirements of the preceding sentence
if the written plans of operation of the
resulting common trust funds are sub-
stantially identical to the plan of
operation of the dividing common trust
fund, each of the assets of the dividing
common trust fund are distributed sub-
stantially pro rata to each of the re-
sulting common trust funds, and each
participant’s aggregate interest in the
assets of the resulting common trust
funds of which he or she is a partici-
pant in substantially the same as was
the participant’s pro rata interest in the
assets of the dividing common trust
fund. The plan of operation of a re-
sulting common trust fund will not be
considered to be substantially identical
to that of the dividing common trust
fund where, for example, the plan of
operation of the resulting common trust
fund contains restrictions as to the
types of participants that may invest in
the common trust fund where such re-
strictions were not present in the plan
of operation of the dividing common
trust fund.
******
(e)Effective date. The eighth sen-
tence of paragraph (a) of this section is
effective for combinations and divi-
sions of common trust funds completed
on or after May 2, 1996.
Margaret Milner Richardson,
Commissioner of Internal Revenue.
Approved March 6, 1996.
Leslie Samuels,
Assistant Secretary of the Treasury.
(Filed by the Office of the Federal Register on
May 1, 1996, 8:45 a.m., and published in the
issue of the Federal Register for May 2, 1996,
61 F.R. 19546)
Section 936.—Puerto Rico and
Possession Tax Credit
26 CFR 1.936–6: Intangible property income
when an election out is made; cost sharing
and profit split options; covered intangibles.
T.D. 8669
DEPARTMENT OF THE TREASURY

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Internal Revenue Service
26 CFR Part 1
Computation of Combined Taxable
Income Under the Profit Split Method
When the Possession Product Is a
Component Product or an End-Product
Form for Purposes of the Possessions
Credit Under Section 936
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations.
SUMMARY: This document contains
final regulations relating to the com-
putation of combined taxable income
under the profit split method. These
regulations amend the current regula-
tions and provide revised rules for
taxpayers to compute combined taxable
income under the profit split method
when the possession product chosen for
purposes of section 936(h)(5) of the
Internal Revenue Code is a component
product or an end-product form. These
regulations are necessary to provide
guidance to taxpayers electing the
profit split method of computing tax-
able income under section 936(h)(5).
DATES: These regulations are effective
May 10, 1996.
See SUPPLEMENTARY INFOR-
MATION for applicability dates.
FOR FURTHER INFORMATION
CONTACT: Jacob Feldman, 202-622-
3870 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
On January 12, 1994, the IRS
published a notice of proposed
rulemaking in the Federal Register
(INTL–0068–92, 59 FR 1690, [1994–1
C.B. 820]) relating to the computation
of combined taxable income under the
profit split method under section
936(h)(5) (relating to the possessions
credit for U.S. companies doing
qualified business in Puerto Rico and
certain U.S. possessions). A number of
written public comments were received
concerning the proposed regulations
and a public hearing was held on July
11, 1994. After consideration of all the
comments, the proposed regulations are
adopted as revised by this Treasury
decision. The revisions are discussed
below.
Discussion
The proposed regulations would
amend §1.936–6(b)(1), Q&A 12. Under
the proposed regulations, combined
taxable income for a taxpayer that
elects the profit split method for a
possession product that is either a
component product or an end-product
form would be determined by multiply-
ing the combined taxable income of the
integrated product that includes the
possession product by a production cost
ratio. In the case of a component
product, the combined taxable income
of the integrated product would be
multiplied by a ratio the numerator of
which is the production costs of the
component product and the denomina-
tor of which is the production costs of
the integrated product. The combined
taxable income of an end-product form
would be determined in a similar
manner using the production costs of
the end-product form. The regulations
were proposed to be effective for
taxable years beginning after 1993.
Taxpayers have argued that the reg-
ulations should not be adopted as
proposed because they would violate
the arm’s length standard under section
482 and that a necessary consequence
of the abandonment of the arm’s length
standard would be distortions in tax-
payers’ income. That is, income would
be computed inconsistently for related
versus unrelated party sales of the same
product, under the same terms and in
the same market.
The proposed regulations did not
apply the arm’s length standard to
component products and end-product
forms under the profit-split method
because application of section 482 in
this context is inconsistent with the
statutory framework. The effect of the
profit split method when applied to
possession products is to minimize
disputes between taxpayers and the IRS
because, unlike section 482 methods,
there is no need to perform functional
analyses to allocate income among the
parties. Because Congress eliminated
the section 482 analysis from the profit
split method, the proposed regulations
did not reinject this analysis into the
area of intermediate products.
In response to taxpayer comments,
however, the IRS and Treasury are
providing an election to taxpayers that
sell the same possession product in
both component form and integrated
form if the transactions meet certain
section 482 standards. This method is
both simple to apply and produces
consistent results with respect to related
and unrelated party transactions. Under
this method, the combined taxable
income from covered sales of the
component product shall be determined
by using the same per unit combined
taxable income as is derived from
uncontrolled sales of the product as an
integrated product. Taxpayers may
elect to compute the combined taxable
income for an end-product form in a
similar manner if all excluded compo-
nents are manufactured by a member of
the affiliated group that includes the
possession corporation and also sold by
the group separately in uncontrolled
transactions. In that case, the combined
taxable income of the end-product form
will be computed by reducing the com-
bined taxable income of the integrated
product that includes the end-product
form by the combined taxable income
of the excluded components determined
under the rules of section 936 as if the
excluded components were possession
products. In order to make the election,
the uncontrolled sales must meet the
comparability standards of the fourth
sentence of §1.482–3(b)(2)(ii)(A),
which requires that the uncontrolled
and controlled transactions have no
differences or minor differences for
which adjustment can be made. How-
ever, under a no loss limitation, in no
case can the taxpayer use as its per unit
combined taxable income for a compo-
nent product or an end-product form an
amount that exceeds the per unit
combined taxable income of the inte-
grated product that includes the compo-
nent product or end-product form.
In 1993, Congress adopted limita-
tions on the amount of the section 936
credit; the taxpayer may be subject to
an activity based limitation or may
elect a percentage limitation. The elec-
tion for the percentage limitation had to
be made for the first taxable year
beginning after December 31, 1993.
Taxpayers commented that the pro-
posed regulations created uncertainty
with respect to the consequences of
making the percentage limitation elec-
tion and, therefore, the period for
making the election should be extended
until after the regulations are finalized.
This comment is adopted. Taxpayers
that have not elected the percentage
limitation under section 936(a)(1) for

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the first taxable year beginning after
December 31, 1993, may so elect if the
taxpayer has elected the profit split
method and the computation of com-
bined taxable income is affected by
§1.936–6(b)(1) Q&A 12.
With respect to the proposed effec-
tive date, taxpayers commented that the
regulations should not be applied retro-
actively. One of the justifications for
the proposed rule was that it would
simplify the computation of combined
taxable income and applying the reg-
ulation retroactively would not simplify
the computation because it would re-
quire filing amended returns. This
comment is adopted in part. The
regulation is effective for taxable years
ending 30 days after May 10, 1996. If
however, the election under paragraph
(v) of A. 12 of §1.936–6(b)(1) is made,
this election must be made for the
taxpayer’s first taxable year beginning
after December 31, 1993, and if not
made effective for that year, the
election cannot be made for any later
taxable year.
The last sentence of paragraph (vi)
of A. 13 of §1.936–6(b)(1) in the
proposed regulations provided that, for
purposes of determining the estimated
tax liability of an affiliate of the
possessions corporation with respect to
income allocated to it from the posses-
sions corporation, the income would be
deemed received on the last day of the
taxable year of each such affiliate in
which or with which the taxable year
of the possessions corporation ended.
This rule is limited to taxable years
beginning prior to January 1, 1995. For
taxable years beginning after December
31, 1994, quarterly estimated tax pay-
ments will be required as provided
under section 711 of the Uruguay
Round Agreements, Public Law 103–
465 (1994), page 230, and any admin-
istrative guidance issued by the IRS
thereunder. See Rev. Proc. 95–23
(1995–1 C.B. 693).
Accordingly, the proposed regula-
tions are finalized as proposed except
with respect to the changes discussed
above and the necessary conforming
changes.
Special Analyses
It has been determined that this
Treasury decision is not a significant
regulatory action as defined in EO
12866. Therefore, a regulatory assess-
ment is not required. It has also been
determined that this regulation does not
have a significant impact on a substan-
tial number of small entities. Thus, the
Regulatory Flexibility Act (5 U.S.C.
chapter 6) does not apply to these
regulations, and therefore, a Regulatory
Flexibility Analysis is not required.
Pursuant to section 7805(f) of the
Internal Revenue Code, the notice of
proposed rulemaking preceding these
regulations was submitted to the Small
Business Administration for comment
on its impact on small business.
Drafting Information
The principal authors of these reg-
ulations are Jacob Feldman and Mary
Gillmarten of the Office of Associate
Chief Counsel (International), IRS.
Other personnel from the IRS and
Treasury Department participated in
their development.
******
Adoption of Amendments to the
Regulations
Accordingly, 26 CFR part 1 is
amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 continues to read in part as
follows:
Authority: 26 U.S.C. 7805 ** *
Par. 2. In §1.936–6, paragraph (b)(1)
is amended by:
1.Revising Q. 10.
2.Amending A. 10 by:
a.Redesignating the text of A. 10 as
paragraph A. 10(i).
b.Removing the last two sentences of
newly designated A. 10(i).
c.Adding paragraphs A. 10(ii) through
(v).
3.Revising the first sentence of A. 11.
4.Revising Q&A. 12.
5.Revising A. 13.
The revisions and addition read as
follows:
§1.936–6 Intangible property income
when an election out is made; cost
sharing and profit split options;
covered intangibles.
******
(b) * * *
(1) * * *
Q. 10: If the possessions corporation
is entitled to use the profit split method
in the situation described in Q. 9
(leasing units of the possession product
or use of such units in the taxpayer’s
own trade or business), how should it
compute combined taxable income with
respect to such units?
A. 10: (i) ** *
(ii)If the possession product is a
component product or an end-product
form, the combined taxable income
with respect to the possession product
shall be determined under Q&A. 12 of
this paragraph (b)(1).
(iii)For purposes of determining the
basis of a component product or an
end-product form, the deemed sales
price of such product must be deter-
mined. The deemed sales price of the
component product shall be determined
by multiplying the deemed sales price
of the integrated product that includes
the component product by a ratio, the
numerator of which is the production
costs of the component product and the
denominator of which is the production
costs of the integrated product that
includes the component product. The
deemed sales price of an end-product
form shall be determined by multiply-
ing the deemed sales price of the
integrated product that includes the
end-product form by a ratio, the
numerator of which is the production
costs of the end-product form and the
denominator of which is the production
costs of the integrated product that
includes the end-product form. For the
definition of production costs, see
Q&A. 12 of this paragraph (b)(1).
(iv)(A) If combined taxable income
is determined under paragraph (v) of A.
12 of this paragraph (b)(1), in the case
of a component product, the deemed
sales price shall be determined by
using the actual sales price of that
product when sold as an integrated
product (as adjusted under the rules of
the fourth sentence of §1.482–3(b)(2)-
(ii)(A)).
(B)If combined taxable income is
determined under paragraph (v) of A.
12 of this paragraph (b)(1), in the case
of an end-product form, the deemed
sales price shall be determined by
subtracting from the deemed sales price
of the integrated product that includes
the end-product form (e.g., the leased
property) the actual sales price of the
excluded component when sold as an
integrated product to an unrelated

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person (as adjusted under the rules of
the fourth sentence of §1.482–3(b)(2)-
(ii)(A)).
(v)The full amount of income re-
ceived under the lease shall be treated
as income of (and be taxed to) the U.S.
affiliate and not the possessions corpo-
ration.
******
A. 11: The U.S. affiliate shall be
treated, for purposes of computing its
basis in such units, as if it had
repurchased such units immediately
following the deemed sale and at the
deemed sales price as provided in
Q&A. 10 of this paragraph (b)(1). ** *
Q. 12: If the possession product is a
component product or an end-product
form, how is the combined taxable
income for such product to be
determined?
A. 12: (i) Except as provided in
paragraph (v) of this A. 12, combined
taxable income for a component prod-
uct or an end-product form is computed
under the production cost ratio (PCR)
method.
(ii)Under the PCR method, the
combined taxable income for a compo-
nent product will be the same proportion
of the combined taxable income for the
integrated product that includes the
component product that the production
costs attributable to the component
product bear to the total production
costs (including costs incurred by the
U.S. affiliates) for the integrated product
that includes the component product.
Production costs will be the sum of the
direct and indirect production costs as
defined under §1.936–5(b)(4) except
that the costs will not include any costs
of materials. If the possession product is
a component product that is transformed
into an integrated product in whole or in
part by a contract manufacturer outside
of the possession, within the meaning of
§1.936–5(c), the denominator of the
PCR shall be computed by including the
same amount paid to the contract
manufacturer, less the costs of materials
of the contract manufacturer, as is taken
into account for purposes of the signifi-
cant business presence test under
§1.936–5(c) Q&A. 5.
(iii)Under the PCR method the
combined taxable income for an end-
product form will be the same propor-
tion of the combined taxable income
for the integrated product that includes
the end-product form that the produc-
tion costs attributable to the end-
product form bear to the total produc-
tion costs (including costs incurred by
the U.S. affiliates) for the integrated
product that includes the end-product
form. Production costs will be the sum
of the direct and indirect production
costs as defined under §1.936–5(b)(4)
except that the costs will not include
any costs of materials. If the possession
product is an end- product form and an
excluded component is contract man-
ufactured outside of the possession,
within the meaning of §1.936–5(c), the
denominator shall be computed by
including the same amount paid to the
contract manufacturer, less cost of
materials of the contract manufacturer,
as is also taken into account for pur-
poses of the significant business pres-
ence test under §1.936–5(c) Q&A. 5.
(iv)This paragraph (iv) of A. 12
illustrates the computation of combined
taxable income for a component prod-
uct or end-product form under the PCR
method. S, a possessions corporation, is
engaged in the manufacture of micro-
processors. S obtains a component from
a U.S. affiliate, O. S sells its produc-
tion to another U.S. affiliate, P, which
incorporates the microprocessors into
central processing units (CPUs). P
transfers the CPUs to a U.S. affiliate,
Q, which incorporates the CPUs into
computers for sale to unrelated persons.
S chooses to define the possession
product as the CPUs. The combined
taxable income for the sale of the
possession product on the basis of the
given production, sales, and cost data is
computed as follows:
Production costs (excluding costs of materials):
1.O’s costs for the component....100
2.S’s costs for the microprocessors 500
3.P’s costs for the CPU’s (the
possession product).............200
4.Q’s costs for the computers.....400
5.Total production costs for the
computer (Add lines 1 through 4) 1,200
6.Combined production costs for the
CPU (the possession product) (Add
lines 1 through 3)..............800
7.Ratio of production costs for the
CPUs (the possession product) to
the production costs for the com-
puter.........................0.667
Determination of combined taxable income for
computers:
Sales:
8.Total possession sales of computers
to unrelated customers and foreign
affiliates......................7,500
Total costs of O, S, P, and Q incurred in pro-
duction of a computer:
9.Production costs (enter from line
5)............................1,200
10.Material costs................100
11.Total costs (line 9 plus line 10) 1,300
12.Combined gross income from sale
of computers (line 8 minus line
11)..........................6,200
Expenses of the affiliated group (other than
foreign affiliates) allocable and apportionable
to the computers or any component thereof
under the rules of §§1.861–8 through 1.861–
14T and 1.936–6 (b)(1), Q&A. 1:
13.Expenses (other than research ex-
penses)......................980
Research expenses of the affiliated group
allocable and apportionable to the computers:
14.Total sales in the 3-digit SIC
Code........................12,500
15.Possession sales of the computers
(enter from line 8)............7,500
16.Cost sharing fraction (divide line
15 by line 14)................0.6
17.Research expenses incurred by the
affiliated group in 3-digit SIC
Code multiplied by 120 percent 700
18.Cost sharing amount (multiply
line 16 by line 17)............420
19.Research of the affiliated group
(other than foreign affiliates) allo-
cable and apportionable under
§§1.861–17 and 1.861–14T(e)(2)
to the computers..............300
20.Enter the greater of line 18 or line
19...........................420
Computation of combined taxable income of the
computer and the CPU:
21.Combined taxable income attribu-
table to the computer (line 12
minus line 13 and line 20).....4,800
22.Combined taxable income attribu-
table to CPUs (multiply line 21
by line 7) (production cost ratio) 3,200
23.Share of combined taxable income
apportioned to S (50 percent of
line 22)......................1,600
Share of combined taxable income apportioned
to U.S. affiliate(s) of S:
24.Adjustments for research expenses
(line 18 minus line 19 multiplied
by line 7)....................80
25.Adjusted combined taxable in-
come (line 22 plus line 24)....3,280
26.Share of combined taxable income
apportioned to affiliates of S (line
25 minus line 23).............1,680
(v)(A) If a possession product is
sold by a taxpayer or its affiliate to
unrelated persons in covered sales both
as an integrated product and as a
component product and the conditions
of paragraph (v)(C) of this A. 12 are
satisfied, the taxpayer may elect to
determine the combined taxable income
derived from covered sales of the
component product under this para-
graph (v). In that case, the combined
taxable income derived from covered
sales of the component product shall be
determined by using the same per unit

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combined taxable income as is derived
from covered sales of the product as an
integrated product, but subject to the
limitation of paragraph (v)(D) of this
A. 12.
(B)In the case of a possession pro-
duct that is an end-product form, if all
of the excluded components are also
separately sold by the taxpayer or its
affiliate to unrelated persons in uncon-
trolled transactions and the conditions
of paragraph (v)(C) of this A. 12 are
satisfied, the taxpayer may elect to
determine the combined taxable income
of such end-product form under this
paragraph (v). In that case, the com-
bined taxable income derived from
covered sales of the end-product form
shall be determined by reducing the per
unit combined taxable income from the
integrated product that includes the
end-product form by the per unit
combined taxable income for excluded
components determined under the rules
of this paragraph (v), but subject to the
limitation of paragraph (v)(D) of this
A. 12. For this purpose, combined
taxable income of the excluded compo-
nents must be determined under section
936 as if the excluded components
were possession products.
(C)In the case of component prod-
ucts, this paragraph (v) applies only if
the sales price of the possession
product sold in covered sales as an
integrated product (i.e., in uncontrolled
transactions) would be the most direct
and reliable measure of an arm’s length
price within the meaning of the fourth
sentence of §1.482–3(b)(2)(ii)(A) for
the component product. For purposes of
applying the fourth sentence of §1.482–
3(b)(2)(ii)(A), the sale of the integrated
product that includes the component
product is treated as being immediately
preceded by a sale of the component
(i.e. without further processing) in a
controlled transaction. In the case of
end-product forms, this paragraph (v)
applies only if the sales price of
excluded components separately sold in
uncontrolled transactions would be the
most direct and reliable measure of an
arm’s length price within the meaning
of the fourth sentence of §1.482–
3(b)(2)(ii)(A) for all excluded compo-
nents of an integrated product that
includes an end-product form. For
purposes of applying the fourth sen-
tence of §1.482–3(b)(2)(ii)(A), the sale
of the integrated product that includes
excluded components is treated as
being immediately preceded by a sale
of the excluded components (i.e., with-
out further processing) in a controlled
transaction. Under the fourth sentence
of §1.482–3(b)(2)(ii)(A), the uncon-
trolled transactions referred to in this
paragraph (v)(C) must have no dif-
ferences with the controlled transac-
tions that would affect price, or have
only minor differences that have a
definite and reasonably ascertainable
effect on price and for which appropri-
ate adjustments are made (resulting in
appropriate adjustments to the com-
putation of combined taxable income).
If such adjustments cannot be made, or
if there are more than minor dif-
ferences between the controlled and
uncontrolled transactions, the method
provided by this paragraph (v)(C)
cannot be used. Thus, for example,
these uncontrolled transactions must
involve substantially identical property
in the same or a substantially identical
geographic market, and must be sub-
stantially identical to the controlled
transaction in terms of their volumes,
contractual terms, and market level.
See §1.482–3(b)(2)(ii)(B).
(D)In no case can the per unit
combined taxable inc ome as deter-
mined under paragraph (v)(A) or (B) of
this A. 12 be greater than the per unit
combined taxable income of the inte-
grated product that includes the compo-
nent product or end-product form.
(E)The provisions of this paragraph
(v) are illustrated by the following
example.
Taxpayer manufactures product A in a U.S.
possession. Some portion of product A is sold to
unrelated persons as an integrated product and
the remainder is sold to related persons for
transformation into product AB. The combined
taxable income of integrated product A is $400
per unit and the combined taxable income of
product AB is $300 per unit. The production cost
ratio with respect to product A when sold as a
component of product AB, is 2/3. Unless the
taxpayer elects and satisfies the conditions of
this paragraph (v), the combined taxable income
with respect to A will be $200 per unit
(combined taxable income for AB of $300 3 the
production cost ratio of 2/3). If, however, the
comparability standards of paragraph (v)(C) of
this A. 12 are met, the taxpayer may elect to
determine combined taxable income of product A
when sold as a component of product AB using
the same per unit combined taxable income as
product A when sold as an integrated product.
However, the per unit combined taxable income
from sales of product A as a component product
may not exceed the per unit combined taxable
income on the sale of product AB. Therefore, the
combined taxable income of component product
A may not exceed $300 per unit.
(vi)Taxpayers that have not elected
the percentage limitation under section
936(a)(1) for the first taxable year
beginning after December 31, 1993,
may do so if the taxpayer has elected
the profit split method and computation
of combined taxable income is affected
by Q&A.12 of this paragraph (b)(1).
(vii)The rules of Q&A. 12 of this
paragraph (b)(1) apply for taxable years
ending 30 days after May 10, 1996. If,
however, the election under paragraph
(v) of A. 12 of §1.936–6(b)(1) is made,
this election must be made for the tax-
payer’s first taxable year beginning
after December 31, 1993, and if not
made effective for that year, the
election cannot be made for any later
taxable year. A successor corporation
that makes the same or substantially
similar products as its predecessor
corporation cannot make an election
under paragraph (v) of A.12 of §1.936–
6(b)(1) unless the election was made
by its predecessor corporation for its
first taxable year beginning after De-
cember 31, 1993.
******
A. 13: (i) The income shall be al-
located to affiliates in the following
order, but no allocations will be made
to affiliates described in a later cate-
gory if there are any affiliates in a
prior category—
(A)First, to U.S. affiliates (other
than tax exempt affiliates) within the
group (as determined under section
482) that derive income with respect to
the product produced in whole or in
part in the possession;
(B)Second, to U.S. affiliates (other
than tax exempt affiliates) that derive
income from the active conduct of a
trade or business in the same product
area as the possession product;
(C)Third, to other U.S. affiliates
(other than tax-exempt affiliates);
(D)Fourth, to foreign affiliates that
derive income from the active conduct
of a U.S. trade or business in the same
product area as the possession product
(or, if the foreign members are resident
in a country with which the U.S. has an
income tax convention, then to those
foreign members that have a permanent
establishment in the United States that
derives income in the same product
area as the possession product); and
(E)Fifth, to all other affiliates.
(ii)The allocations made under para-
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on the basis of the relative gross
income derived by each such affiliate
with respect to the product produced in
whole or in part in the possession. For
this purpose, gross income must be
determined consistently for each affili-
ate and consistently from year to year.
(iii) The allocations made under
paragraphs (i)(B) and (i)(D) of this A.
13 shall be made on the basis of the
relative gross income derived by each
such affiliate from the active conduct
of the trade or business in the same
product area.
(iv) The allocations made under
paragraphs (i)(C) and (i)(E) of this A.
13 shall be made on the basis of the
relative total gross income of each such
affiliate before allocating income under
this section.
(v)Income allocated to affiliates
shall be treated as U.S. source and
section 863(b) does not apply for this
purpose.
(vi)For purposes of determining an
affiliate’s estimated tax liability for
income thus allocated for taxable years
beginning prior to January 1, 1995, the
income shall be deemed to be received
on the last day of the taxable year of
each such affiliate in which or with
which the taxable year of the posses-
sions corporation ends. For taxable
years beginning after December 31,
1994, quarterly estimated tax payments
will be required as provided under
section 711 of the Uruguay Round
Agreements, Public Law 103–465
(1994), page 230, and any administra-
tive guidance issued by the Internal
Revenue Service thereunder.
******
Margaret Milner Richardson,
Commissioner of Internal Revenue.
Approved April 4, 1996.
Leslie Samuels,
Assistant Secretary of the Treasury.
(Filed by the Office of the Federal Register on
May 9, 1996, 8:45 a.m., and published in the
issue of the Federal Register for May 10,
1996, 61 F.R. 21366)

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Part IV. Items of General Interest
Form 5300 series
Announcement 96–53
The application forms used to re-
quest determination letters for qualified
employee benefit plans have been
revised. In addition, applicants must
file a new schedule, Schedule Q (Form
5300) Nondiscrimination Requirements,
as an attachment to Forms 5300, 5303,
5307 and 5310. Schedule Q replaces
the attachment previously required by
Rev. Proc. 93–39, 1993–2 C.B. 513.
The 5300 series applications were
revised primarily to eliminate questions
that were duplicated on the attachment
required by Rev. Proc. 93–39 (now
Schedule Q). Further, Form 5300 may
now only be used to request a deter-
mination on the entire plan. Form 6406
may be used to obtain a determination
on the effect of a plan amendment
upon a previously issued determination
letter.
The revised application forms may
be obtained from IRS distribution
centers by calling 1-800-TAX-FORM.
Application forms having revision dates
before January 1, 1996, may be used
until October 1, 1996. The applicable
revision dates follow:
Form
Revision
Date
1.Form 5300 (Application
for Determination for
Employee Benefit Plan)1/96
2.Form 5303 (Application
for Determination for
Collectively Bargained
Plan)1/96
3.Form 5307 (Application
for Determination for
Adopters of Master or
Prototype, Regional
Prototype, or Volume
Submitter Plans)3/96
4.Form 5310 (Application
for Determination for
Terminating Plans)1/96
5.Form 6406 (Short Form
Application for Minor
Amendment of Employee
Benefit Plan)1/96
Persons having approval to computer
generate the above forms need not
request reapproval if:
1.The OCR data sheet is modified to
reflect the new revision date in the
second field, and no other modifica-
tions are made.
2.The application forms are word-for-
word identical to the revised IRS form.
However, references regarding the need
to file a second copy of page 1 in red
ink may be deleted. Schedule Q must
include the pointers next to certain
entries in the right hand column of the
schedule.
Persons using IRS software to gener-
ate Form 5307 may continue to use that
program until further notice.
Income Taxes; Information and
Backup Withholding Hearing
Announcement 96–54
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of public hearing on
proposed rulemaking.
SUMMARY: This document provides
notice of a public hearing on proposed
regulations relating, in part, to informa-
tion reporting and backup withholding
under the Interest and Dividend Tax
Compliance Act of 1983, as well as,
incorporate changes to the applicable
tax law made by the Interest and
Dividend Tax Compliance Act of 1983,
the Tax Reform Act of 1984, and the
Tax Reform Act of 1986.
DATES: The public hearing will be
held on Wednesday, July 24, 1996,
beginning at 10:00 a.m. Requests to
speak and outlines of oral comments
must be received by Wednesday, July
3, 1996.
ADDRESSES: The public hearing will
be held in the Auditorium of the
Internal Revenue Building, 1111 Con-
stitution Avenue, N.W., Washington,
D.C. 20044. Requests to speak and
outlines of oral comments should be
mailed to the Internal Revenue Service,
P.O. Box 7604, Ben Franklin Station,
Attn: CC:DOM:CORP:R [IL–52–86],
Room 5228, Washington, D.C. 20044.
FOR FURTHER INFORMATION
CONTACT: Evangelista Lee of the
Regulations Unit, Assistant Chief
Counsel (Corporate), (202) 622-7190
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
The subject of the public hearing is
proposed amendments to the Income
Tax Regulations under sections 3406,
6041 through 6049, and 6050A of the
Internal Revenue Code. The proposed
regulations [IL–52–86, 1988–1 C.B.
892] appeared in the Federal Register
on Monday, February 29, 1988 (53 FR
5991).
The rules of §601.601(a)(3) of the
‘‘Statement of Procedural Rules’’ (26
CFR Part 601) shall apply with respect
to the public hearing. Persons who
have submitted written comments
within the time prescribed in the notice
of proposed rulemaking and who also
desire to present oral comments at the
hearing on the proposed regulations
should submit not later than Wednes-
day, July 3, 1996, an outline of the oral
comments/testimony to be presented at
the hearing and the time they wish to
devote to each subject.
Each speaker (or group of speakers
representing a single entity) will be
limited to 10 minutes for an oral
presentation exclusive of the time
consumed by the questions from the
panel for the government and answer
thereto.
Because of controlled access restric-
tions, attenders cannot be admitted
beyond the lobby of the Internal
Revenue Building until 9:45 a.m.
An agenda showing the scheduling
of the speakers will be made after
outlines are received from the persons
testifying. Copies of the agenda will be
available free of charge at the hearing.
Cynthia E. Grigsby,
Chief, Regulations Unit,
Assistant Chief Counsel (Corporate).
(Filed by the Office of the Federal Register on
May 7, 1996, 8:45 a.m., and published in the
issue of the Federal Register for May 8, 1996,
61 F.R. 20767)
Foundations Status of Certain
Organizations
Announcement 96–55
The following organizations have
failed to establish or have been unable
to maintain their status as public
charities or as operating foundations.

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Accordingly, grantors and contributors
may not, after this date, rely on
previous rulings or designations in the
Cumulative List of Organizations (Pub-
lication 78), or on the presumption
arising from the filing of notices under
section 508(b) of the Code. This listing
does not indicate that the organizations
have lost their status as organizations
described in section 501(c)(3), eligible
to receive deductible contributions.
Former Public Charities. The fol-
lowing organizations (which have been
treated as organizations that are not
private foundations described in section
509(a) of the Code) are now classified
as private foundations:
Accessible Housing Association Inc.,
Philadelphia, PA
A-CLUTCH Inc., Tuckerman, AR
African Culture Center, Inc.,
Montgomery, AL
Arts Council of Central Virginia Inc.,
Lynchburg, VA
Assoc. of Government Accountants,
Woodbridge, VA
Bala Cynwyo Symphony Orchestra
Association, Bala Cynwyo, PA
Betterway Foundation, Elyria, OH
Brothers Keeper, Inc., Gary, IN
Care and Kindness Mission Inc.,
Arlington, VA
CCA Alumni Association, Limerick,
PA
Central Bucks East Band Parents
Assoc., Buckingham, PA
Central Upper Peninsula Food Bank,
Inc., Ishpeming, MI
C G Jung Foundation of the
Delaware Valley, Philadelphia, PA
Civil War Round Table of Cape May
County Inc., Wildwood, NJ
Cleveland House Inc., N Brunswick,
NJ
Community Solidarity of Hagerstown
Inc., Hagerstown, MD
Cranbury Association for Children
Inc., Cranbury, NJ
Crozer Chester Medical Center
Arboretum, Upland, PA
Daytop Village of Florida, Inc., New
York, NY
Discoveryville Childrens Museum,
Herndon, VA
Dreamquests Inc., St Croix, VI
E C O P Inc., Philadelphia, PA
Elderly Care Inc., Baltimore, MD
Englewood Partners in Public
Education Inc., Englewood, NJ
Essex Properties Urban Renewal
Associates Inc., S Orange, NJ
Foreman Enterprises Inc., Ridgely,
MD
Foundation of the Williamsport
Lycoming Chamber, Williamsport,
PA
Frederick County Revolving Loan
Fund Inc., Frederick, MD
Habersham County Humane Society,
Inc., Clarksville, GA
Herbert L. Brooks Housing
Development Fund Company Inc.,
Bronx, NY
Howard Prince and the Music
Coalition, New York, NY
Kiddie Keepers of Louisville Inc.,
Louisville, KY
Kids-At-Risk, Inc., Louisville, KY
Mal Whitfield Foundation,
Mitchellville, MD
National Alliance of African
American Health Care Professions,
Washington, DC
National Family Center Inc., Los
Angeles, CA
Netanya Foundation, Inc., River
Edge, NJ
107-109 Avenue D Housing
Development Fund Corporation,
New York, NY
Partners in International Development
Inc., Washington, DC
Penn-North Plaza Inc., Baltimore,
MD
Philip N. Johnson Scholarship,
Higganum, CT
Plum Emergency Medical Services
Inc., Pittsburgh, PA
Pregnancy Care Center of Madison
County Inc., London, OH
Public Recycling Officials of
Pennsylvania, Kittanning, PA
Puerto Rico Community Network for
Clinical Research on AIDS, San
Juan, PR
PWA Settlement Project of Delaware
Inc., Rickland, DE
Red Clay Music Boosters
Association, Newark, DE
Roanoke Educational Assistance
Foundation, Roanoke, VA
Rotary Club of Wilmington
Educational Foundation,
Wilmington, DE
Scan of Northern Virginia Inc.,
Alexandria, VA
Secaucus Lions Charities Inc.,
Secaucus, NJ
Sergents Way Inc., Frederick, MD
Sims Humanities Arts and Sciences
Charity, Inc., Melville, NY
Single Black Mothers Education
Fund, Washington, DC
Society for Handicapped Children
Inc., Silver Spring, MD
Society for Interreligious Intercultural
Dialogue, Wallingford, PA
South Central Pennsylvania Housing
Development Foundation,
Harrisburg, PA
Spanish Peaks Regional Institute for
Mental Health, Inc., Pueblo, CO
Stephen C Tausz Memorial
Foundation, Greenwich, CT
Sumter Schools Enhancement
Foundation, Inc., Bushnell, FL
Tennessee Association of Suicide
Prevention, Nashville, TN
Tennessee Committee of the National
Museum of Women in the Arts,
Knoxville, TN
Tennessee Pharmacists Research and
Education Foundation, Nashville,
TN
Tennessee Soccer Development
Association Inc., Knoxville, TN
Tennessee Youth Chorale Inc.,
Pulaski, TN
Thin White Line Relapse and
Restoration Center Inc., Decatur,
GA
Together Forever Ministries Inc.,
Berryville, AR
Town Hall Television of North
Carolina Inc., Raleigh, NC
Triangle Foundation, Little Rock, AR
Triangle Orthopedic Study Group,
Durham, NC
Troup County Community and
Agricultural Center Inc., Lagrange,
GA
Troy Literacy Council, Inc., Troy,
OH
Turkish American Ophthalmic Society
Inc., Atlanta, GA
Uncle Dave Macon Days,
Murphreesboro, TN
UNICOI County Heritage Players,
Erwin, TN
UNICOI County Historical Society,
Erwin, TN
United Way of Cocke County,
Newport, TN
Universal Humanities Inc., Atlanta,
GA
University John Hope Community
Coalition Inc., Atlanta, GA

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Vanishing Black Male Inc., The, Nor-
cross, GA
Visions for Sumter Seeing Through
Young Eyes Inc., Americus, GA
Volunteer Center of Lincoln County,
Taft, TN
Wallace Ministries International Inc.,
Riverdale, GA
Wee Care Express Inc., The, Atlanta,
GA
WESLEY Housing Corporation of Cen-
tral Arkansas Inc., Batesville, AR
West Polk County Volunteer Support
Committee Inc., Benton, TN
Western North Carolina Recovery
Center Inc., Asheville, NC
Whitfield Improvement Committee,
York, AL
World Christian Training Center,
Charlotte, NC
World Council of Young People Inc.,
Perry, GA
Worlds of Wonder Inc., Nashville, TN
If an organization listed above sub-
mits information that warrants the
renewal of its classification as a public
charity or as a private operating foun-
dation, the Internal Revenue Service
will issue a ruling or determination
letter with the revised classification as
to foundation status. Grantors and
contributors may thereafter rely upon
such ruling or determination letter as
provided in section 1.509(a)–7 of the
Income Tax Regulations. It is not the
practice of the Service to announce
such revised classification of founda-
tion status in the Internal Revenue
Bulletin.

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15
Announcement of the Disbarment, Suspension, or Consent to Voluntary
Suspension of Attorneys, Certified Public Accountants, Enrolled Agents and
Enrolled Actuaries From Practice Before the Internal Revenue Service
Under 31 Code of Federal Regula-
tions, Part 10, an attorney, certified
public accountant, enrolled agent or en-
rolled actuary, in order to avoid the in-
stitution or conclusion of a proceeding
for his disbarment or suspension from
practice before the Internal Revenue
Service, may offer his consent to
suspension from such practice. The
Director of Practice, in his discretion,
may suspend an attorney, certified
public accountant, enrolled agent or
enrolled actuary in accordance with the
consent offered.
Attorneys, certified public account-
ants, enrolled agents and enrolled actu-
aries are prohibited in any Internal
Revenue Service matter from directly
or indirectly employing, accepting
assistance from, being employed by,
or sharing fees with, any practi-
tioner disbarred or suspended from
practice before the Internal Revenue
Service.
To enable attorneys, certified public
accountants, enrolled agents and en-
rolled actuaries to identify practitioners
under consent suspension from practice
before the Internal Revenue Service,
the Director of Practice will announce
in the Internal Revenue Bulletin the
names and addresses of practitioners
who have been suspended from such
practice, their designation as attor-
ney, certified public accountant, en-
rolled agent or enrolled actuary and
date or period of suspension. This an-
nouncement will appear in the weekly
Bulletin at the earliest practicable date
after such action and will continue to
appear in the weekly Bulletins for five
successive weeks or for as many weeks
as is practicable for each attorney,
certified public accountant, enrolled
agent or enrolled actuary so suspended
and will be consolidated and published
in the Cumulative Bulletin.
The following individuals have been
placed under consent suspension from
practice before the Internal Revenue
Service:
NameAddressDesignationDate of Suspension
Behrens, WilliamKenosha, WIEnrolled AgentMarch 6, 1996 to May 5, 1996
Warter, J. ChristopherSouth Bend, INAttorneyIndefinite from March 8, 1996
Leckie, Jerry B.Macon, GAEnrolled AgentMarch 9, 1996 to March 8, 1999
Retzlaff, GeneHortonville, WIEnrolled AgentMarch 18, 1996 to July 17, 1996
Cahill, DonalStratford, CTAttorneyApril 4, 1996 to April 3, 1997
Guidera, George C.Straford, CTAttorneyApril 11, 1996 to October 10, 1996
Kirk, Gregg T.Dallas, TXCPAIndefinite from May 1, 1996
Brock, Guy CharlesSpokane, WACPAIndefinite from May 1, 1996
Mathews, ThomasCincinnati, OHCPAMay 1, 1996 to August 31, 1996
Farnsworth Jr., HaroldStarke, FLCPAMay 1, 1996 to April 30, 1998
King, John C.Wichita, KSAttorneyMay 1, 1996 to August 31, 1996
Announcement of the Expedited Suspension of Attorneys, Certified Public
Accountants, Enrolled Agents, and Enrolled Actuaries From Practice Before the
Internal Revenue Service
Under title 31 of the Code of Federal
Regulations, section 10.76, the Director
of Practice is authorized to immediately
suspend from practice before the Inter-
nal Revenue Service any practitioner
who, within five years, from the date
the expedited proceeding is instituted,
(1) has had a license to practice as an
attorney, certified public accountant, or
actuary suspended or revoked for
cause; or (2) has been convicted of any
crime under title 26 of the United
States Code or, of a felony under title
18 of the United States Code involving
dishonesty or breach of trust.
Attorneys, certified public account-
ants, enrolled agents, and enrolled ac-
tuaries are prohibited in any Internal
Revenue Service matter from directly
or indirectly employing, accepting as-
sistance from, being employed by, or
sharing fees with, any practitioner
disbarred or suspended from practice
before the Internal Revenue Service.
To enable attorneys, certified public
accountants, enrolled agents, and en-
rolled actuaries to identify practitioners
under expedited suspension from prac-
tice before the Internal Revenue Serv-
ice, the Director of Practice will an-
nounce in the Internal Revenue Bulletin
the names and addresses of practition-
ers who have been suspended from such
practice, their designation as attorney,
certified public accountant, enrolled
agent, or enrolled actuary, and date or
period of suspension. This announce-
ment will appear in the weekly Bulletin
at the earliest practicable date after
such action and will continue to appear
in the weekly Bulletins for five succes-
sive weeks or for as many weeks as is
practicable for each attorney, certified
public accountant, enrolled agent, or
enrolled actuary so suspended and will
be consolidated and published in the
Cumulative Bulletin.
The following individuals have been
placed under suspension from practice
before the Internal Revenue Service by
virtue of the expedited proceeding
provisions of the applicable regulations:

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16
NameAddressDesignationDate of Suspension
Noske, Joan M.Richmond, MNCPAIndefinite from March 1, 1996
Wahl, Roger W.Martinez, GACPAIndefinite from March 1, 1996
Stojanov, DraganDetroit, MIAttorneyIndefinite from March 13, 1996
Gay, Randall D.Honolulu, HICPAIndefinite from March 13, 1996
Sheffey, RalphLaCrosse, WIAttorneyIndefinite from March 13, 1996
Doyle, RobertSacramento, CACPAIndefinite from March 19, 1996
Singer, Michael G.Minnetonka, MNAttorneyIndefinite from March 19, 1996
Mohme, Robert H.St. Louis, MOAttorneyIndefinite from March 20, 1996
Vogelei, George MacNovato, CAAttorneyIndefinite from March 20, 1996
Gaskins, Oscar N.Cherry Hill, NJAttorneyIndefinite from March 26, 1996
Gawel, Michael S.Niagara Falls, NYAttorneyIndefinite from March 29, 1996

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17
Definition of Terms
Revenue rulings and revenue proce-
dures (hereinafter referred to as ‘‘rul-
ings’’) that have an effect on previous
rulings use the following defined terms
to describe the effect:
Amplified describes a situation where
no change is being made in a prior
published position, but the prior posi-
tion 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 princi-
ple also applies to B, the earlier ruling
is amplified. (Compare with modified,
below).
Clarified is used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in
a prior ruling is being changed.
Distinguished describes a situation
where a ruling mentions a previously
published ruling and points out an
essential difference between them.
Modified is used where the substance
of a previously published position is
being changed. Thus, if a prior ruling
held that a principle applied to A but
not to B, and the new ruling holds that
it applies to both A and B, the prior
ruling is modified because it corrects a
published position. (Compare with am-
plified and clarified, above).
Obsoleted describes a previously
published ruling that is not considered
determinative with respect to future
transactions. This term is most com-
monly used in a ruling that lists
previously published rulings that are
obsoleted because of changes in law or
regulations. A ruling may also be
obsoleted because the substance has
been included in regulations subse-
quently adopted.
Revoked describes situations where
the position in the previously published
ruling is not correct and the correct
position is being stated in the new
ruling.
Superseded describes a situation
where the new ruling does nothing
more than restate the substance and
situation of a previously published
ruling (or rulings). Thus, the term is
used to republish under the 1986 Code
and regulations the same position pub-
lished under the 1939 Code and regula-
tions. The term is also used when it is
desired to republish in a single ruling a
series of situations, names, etc., that
were previously published over a
period of time in separate rulings.
If the new ruling does more than
restate the substance of a prior ruling, a
combination of terms is used. For
example, modified and superseded de-
scribes a situation where the substance
of a previously published ruling is
being changed in part and is continued
without change in part and it is desired
to restate the valid portion of the
previously published ruling in a new
ruling that is self contained. In this
case the previously published ruling is
first modified and then, as modified, is
superseded.
Supplemented is used in situations in
which a list, such as a list of the names
of countries, is published in a ruling
and that list is expanded by adding
further names in subsequent rulings.
After the original ruling has been
supplemented several times, a new
ruling may be published that includes
the list in the original ruling and the
additions, and supersedes all prior
rulings in the series.
Suspended is used in rare situations
to show that the previous published
rulings will not be applied pending
some future action such as the issuance
of new or amended regulations, the
outcome of cases in litigation, or the
outcome of a Service study.
Abbreviations
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 Contribution Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign Corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statements of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.

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Numerical Finding List
1
Bulletins 1996–1 through 1996–22
Announcements:
96–1, 1996–2 I.R.B. 57
96–2, 1996–2 I.R.B. 57
96–3, 1996–2 I.R.B. 57
96–4, 1996–3 I.R.B. 50
96–5, 1996–4 I.R.B. 99
96–6, 1996–5 I.R.B. 43
96–7, 1996–5 I.R.B. 44
96–8, 1996–7 I.R.B. 56
96–9, 1996–8 I.R.B. 30
96–10, 1996–8 I.R.B. 30
96–11, 1996–9 I.R.B. 11
96–12, 1996–11 I.R.B. 30
96–13, 1996–12 I.R.B. 33
96–14, 1996–12 I.R.B. 35
96–15, 1996–11 I.R.B. 9
96–16, 1996–13 I.R.B. 22
96–17, 1996–13 I.R.B. 22
96–18, 1996–15 I.R.B. 15
96–19, 1996–15 I.R.B. 15
96–20, 1996–15 I.R.B. 15
96–21, 1996–15 I.R.B. 15
96–22, 1996–15 I.R.B. 16
96–23, 1996–18 I.R.B. 7
96–24, 1996–16 I.R.B. 35
96–25, 1996–17 I.R.B. 13
96–26, 1996–17 I.R.B. 13
96–27, 1996–17 I.R.B. 16
96–28, 1996–17 I.R.B. 16
96–29, 1996–17 I.R.B. 17
96–30, 1996–17 I.R.B. 17
96–31, 1996–17 I.R.B. 18
96–32, 1996–17 I.R.B. 18
96–33, 1996–18 I.R.B. 12
96–34, 1996–18 I.R.B. 13
96–35, 1996–18 I.R.B. 13
96–36, 1996–18 I.R.B. 13
96–37, 1996–18 I.R.B. 14
96–38, 1996–19 I.R.B. 84
96–39, 1996–19 I.R.B. 84
96–40, 1996–19 I.R.B. 85
96–41, 1996–20 I.R.B. 18
96–42, 1996–20 I.R.B. 18
96–43, 1996–20 I.R.B. 18
96–44, 1996–21 I.R.B. 10
96–45, 1996–21 I.R.B. 10
96–46, 1996–21 I.R.B. 10
96–47, 1996–22 I.R.B. 10
96–48, 1996–22 I.R.B. 10
96–49, 1996–22 I.R.B. 10
96–50, 1996–22 I.R.B. 11
96–51, 1996–22 I.R.B. 11
96–52, 1996–22 I.R.B. 12
Delegations Orders:
232 (Rev. 2), 1996–7 I.R.B. 49
See footnote at the end of list.
Delegations Orders—Continued
236 (Rev. 2), 1996–21 I.R.B. 7
239 (Rev. 1), 1996–7 I.R.B. 49
247, 1996–21 I.R.B. 7
Notices:
96–2, 1996–2 I.R.B. 15
96–1, 1996–3 I.R.B. 30
96–4, 1996–4 I.R.B. 69
96–5, 1996–6 I.R.B. 22
96–6, 1996–5 I.R.B. 27
96–7, 1996–6 I.R.B. 22
96–8, 1996–6 I.R.B. 23
96–9, 1996–6 I.R.B. 26
96–10, 1996–7 I.R.B. 47
96–11, 1996–8 I.R.B. 19
96–12, 1996–10 I.R.B. 29
96–13, 1996–10 I.R.B. 29
96–14, 1996–12 I.R.B. 11
96–15, 1996–13 I.R.B. 19
96–16, 1996–13 I.R.B. 20
96–17, 1996–13 I.R.B. 20
96–18, 1996–14 I.R.B. 27
96–19, 1996–14 I.R.B. 28
96–20, 1996–14 I.R.B. 30
96–21, 1996–14 I.R.B. 30
96–22, 1996–14 I.R.B. 30
96–23, 1996–16 I.R.B. 23
96–24, 1996–16 I.R.B. 23
96–25, 1996–17 I.R.B. 11
96–26, 1996–18 I.R.B. 4
96–27, 1996–18 I.R.B. 4
96–28, 1996–19 I.R.B. 7
96–29, 1996–19 I.R.B. 7
96–30, 1996–20 I.R.B. 11
96–31, 1996–22 I.R.B. 7
96–32, 1996–22 I.R.B. 7
96–33, 1996–22 I.R.B. 8
Proposed Regulations:
DL–1–95, 1996–6 I.R.B. 28
EE–20–95, 1996–5 I.R.B. 15
EE–34–95, 1996–3 I.R.B. 49
EE–35–95, 1996–5 I.R.B. 19
EE–53–95, 1996–5 I.R.B. 23
EE–55–95, 1996–12 I.R.B. 12
EE–106–82, 1996–10 I.R.B. 31
EE–142–87, 1996–12 I.R.B. 13
EE–148–81, 1996–11 I.R.B. 29
GL–1–96, 1996–21 I.R.B. 7
IA–3–94, 1996–17 I.R.B. 12
IA–33–95, 1996–4 I.R.B. 99
IA–41–93, 1996–11 I.R.B. 29
INTL–3–95, 1996–6 I.R.B. 29
INTL–9–95, 1996–5 I.R.B. 25
INTL–54–95, 1996–14 I.R.B. 39
INTL–62–90; INTL–32–93;
INTL–52–86; INTL–52–94,
1996–19 I.R.B. 26
PS–2–95, 1996–7 I.R.B. 50
Proposed Regulations—Continued
PS–4–96, 1996–18 I.R.B. 5
PS–6–95, 1996–16 I.R.B. 27
Revenue Procedures:
96–1, 1996–1 I.R.B. 8
96–2, 1996–1 I.R.B. 60
96–3, 1996–1 I.R.B. 82
96–4, 1996–1 I.R.B. 94
96–5, 1996–1 I.R.B. 129
96–6, 1996–1 I.R.B. 151
96–7, 1996–1 I.R.B. 185
96–8, 1996–1 I.R.B. 187
96–8A, 1996–9 I.R.B. 10
96–9, 1996–2 I.R.B. 15
96–10, 1996–2 I.R.B. 17
96–11, 1996–2 I.R.B. 18
96–12, 1996–3 I.R.B. 30
96–13, 1996–3 I.R.B. 31
96–14, 1996–3 I.R.B. 41
96–15, 1996–3 I.R.B. 41
96–16, 1996–3 I.R.B. 45
96–17, 1996–4 I.R.B. 69
96–18, 1996–4 I.R.B. 73
96–19, 1996–4 I.R.B. 80
96–20, 1996–4 I.R.B. 88
96–21, 1996–4 I.R.B. 96
96–22, 1996–5 I.R.B. 27
96–23, 1996–5 I.R.B. 27
96–24, 1996–5 I.R.B. 28
96–24A, 1996–15 I.R.B. 12
96–25, 1996–8 I.R.B. 19
96–26, 1996–8 I.R.B. 22
96–27, 1996–11 I.R.B. 27
96–28, 1996–14 I.R.B. 31
96–29, 1996–16 I.R.B. 24
96–30, 1996–19 I.R.B. 8
96–31, 1996–20 I.R.B. 11
96–32, 1996–20 I.R.B. 14
96–33, 1996–22 I.R.B. 8
Revenue Rulings:
96–1, 1996–1 I.R.B. 7
96–2, 1996–2 I.R.B. 5
96–3, 1996–2 I.R.B. 14
96–6, 1996–2 I.R.B. 8
96–4, 1996–3 I.R.B. 16
96–5, 1996–3 I.R.B. 29
96–7, 1996–3 I.R.B. 12
96–8, 1996–4 I.R.B. 62
96–9, 1996–4 I.R.B. 5
96–10, 1996–4 I.R.B. 27
96–11, 1996–4 I.R.B. 28
96–12, 1996–9 I.R.B. 4
96–13, 1996–10 I.R.B. 19
96–14, 1996–6 I.R.B. 20
96–15, 1996–11 I.R.B. 9
96–16, 1996–11 I.R.B. 4
96–17, 1996–13 I.R.B. 5

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19
Numerical Finding List
1
—Continued
Bulletins 1996–1 through 1996–22
Revenue Rulings—Continued
96–18, 1996–13 I.R.B. 4
96–19, 1996–14 I.R.B. 24
96–20, 1996–15 I.R.B. 5
96–21, 1996–15 I.R.B. 7
96–22, 1996–15 I.R.B. 9
96–23, 1996–15 I.R.B. 11
96–24, 1996–19 I.R.B. 5
96–25, 1996–19 I.R.B. 4
96–26, 1996–21 I.R.B. 9
Treasury Decisions:
8630, 1996–3 I.R.B. 19
8631, 1996–3 I.R.B. 7
8632, 1996–4 I.R.B. 6
8633, 1996–4 I.R.B. 20
8634, 1996–3 I.R.B. 17
8635, 1996–3 I.R.B. 5
8636, 1996–4 I.R.B. 64
8637, 1996–4 I.R.B. 29
8638, 1996–5 I.R.B. 5
8639, 1996–5 I.R.B. 12
8640, 1996–2 I.R.B. 10
8641, 1996–6 I.R.B. 4
8642, 1996–7 I.R.B. 4
8643, 1996–11 I.R.B. 4
8644, 1996–7 I.R.B. 16
8645, 1996–8 I.R.B. 4
8646, 1996–8 I.R.B. 10
8647, 1996–9 I.R.B. 7
8648, 1996–10 I.R.B. 23
8649, 1996–9 I.R.B. 5
8650, 1996–10 I.R.B. 5
8651, 1996–11 I.R.B. 24
8652, 1996–11 I.R.B. 11
8653, 1996–12 I.R.B. 4
8654, 1996–11 I.R.B. 14
8655, 1996–12 I.R.B. 9
8656, 1996–13 I.R.B. 9
8657, 1996–14 I.R.B. 4
8658, 1996–14 I.R.B. 13
8659, 1996–16 I.R.B. 4
8660, 1996–17 I.R.B. 4
8661, 1996–17 I.R.B. 7
8664, 1996–20 I.R.B. 7
8665, 1996–21 I.R.B. 4
8667, 1996–20 I.R.B. 4
8668, 1996–22 I.R.B. 4
1
A cumulative list of all Revenue Rulings,
Revenue Procedures, Treasury Decisions, etc.,
published in Internal Revenue Bulletins 1995–
27 through 1995–52 will be found in Internal
Revenue Bulletin 1996–1, dated January 2,
1996.

SEQ 0041 JOB IRS23-052-003 PAGE-0020 FINDING LIST
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20
Finding List of Current Action on
Previously Published Items
1
Bulletins 1996–1 through 1996–22
*Denotes entry since last publication
Delegation Orders:
232 (Rev. 1)
Superseded by
232 (Rev. 2), 1996–7 I.R.B. 49
236 (Rev. 1)
Superseded by
236 (Rev. 2), 1996–21 I.R.B. 7*
239
Amended by
239 (Rev. 1), 1996–7 I.R.B. 49
Revenue Procedures:
65–17
Modified by
96–14, 1996–3 I.R.B. 41
66–49
Modified by
96–15, 1996–3 I.R.B. 41
88–32
Obsoleted by
96–15, 1996–3 I.R.B. 41
88–33
Obsoleted by
96–15, 1996–3 I.R.B. 41
89–19
Superseded by
96–17, 1996–4 I.R.B. 69
89–48
Superseded in part by
96–17, 1996–4 I.R.B. 69
91–22
Modified by
96–1, 1996–1 I.R.B. 8
91–22
Amplified by
96–13, 1996–3 I.R.B. 31
91–23
Superseded by
96–13, 1996–3 I.R.B. 31
91–24
Superseded by
96–14, 1996–3 I.R.B. 41
91–26
Superseded by
96–13, 1996–3 I.R.B. 31
92–20
Modified by
96–1, 1996–1 I.R.B. 8
1
A cumulative finding list for previously
published items mentioned in Internal Revenue
Bulletins 1995–27 through 1995–52 will be
found in Internal Revenue Bulletin 1996–1, dated
January 2, 1996.
Revenue Procedures—Continued
96–31, 1996–20 I.R.B. 11
92–85
Modified by
96–1, 1996–1 I.R.B. 8
93–16
Superseded by
96–11, 1996–2 I.R.B. 18
93–46
Superseded in part by
96–17, 1996–4 I.R.B. 69
Superseded by
96–18, 1996–4 I.R.B. 73
94–16
Modified by
96–29, 1996–16 I.R.B. 24
94–18
Superseded in part by
96–17, 1996–4 I.R.B. 69
Superseded by
96–18, 1996–4 I.R.B. 73
94–59
Superseded in part by
96–17, 1996–4 I.R.B. 69
Superseded by
96–18, 1996–4 I.R.B. 73
94–62
Modified by
96–29, 1996–16 I.R.B. 24
94–77
Superseded by
96–28, 1996–14 I.R.B. 31
95–1
Superseded by
96–1, 1996–1 I.R.B. 8
95–2
Superseded by
96–2, 1996–1 I.R.B. 60
95–3
Superseded by
96–3, 1996–1 I.R.B. 82
95–4
Superseded by
96–4, 1996–1 I.R.B. 94
95–5
Superseded by
96–5, 1996–1 I.R.B. 129
95–6
Superseded by
96–6, 1996–1 I.R.B. 151
Revenue Procedures—Continued
95–66
Modified by
96–25, 1996–19 I.R.B. 4
95–7
Superseded by
96–7, 1996–1 I.R.B. 185
95–8
Superseded by
96–8, 1996–1 I.R.B. 187
95–13
Superseded by
96–20, 1996–4 I.R.B. 88
95–20
Superseded by
96–24, 1996–5 I.R.B. 28
95–50
Superseded by
96–3, 1996–1 I.R.B. 82
96–3
Amplified by
96–12, 1996–3 I.R.B. 30
Revenue Rulings:
66–307
Obsoleted by
96–3, 1996–2 I.R.B. 14
72–437
Modified by
96–13, 1996–3 I.R.B. 31
78–294
Obsoleted by
8665, 1996–21 I.R.B. 4
80–80
Obsoleted by
96–3, 1996–2 I.R.B. 14
82–80
Modified by
96–14, 1996–3 I.R.B. 41
92–19
Supplemented in part
96–2, 1996–2 I.R.B. 5
92–75
Clarified by
96–13, 1996–3 I.R.B. 31
95–10
Supplemented and superseded by
96–4, 1996–3 I.R.B. 16
95–11
Supplemented and superseded by
96–5, 1996–3 I.R.B. 29
96–24
Modified and amplified by
96–24A, 1996–15 I.R.B. 12

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21
INDEX
Internal Revenue Bulletins 1996–1
Through 1996–22
For index of items published during
the last six months of 1995, see
I.R.B. 1996–1, dated January 2,
1996.
The abbreviation and number in pa-
rentheses following the index entry
refer to the specific item; numbers
in roman and italic type following the
parentheses refer to the Internal
Revenue Bulletin in which the item
may be found and the page number
on which it appears.
Key to Abbreviations:
RRRevenue Ruling
RPRevenue Procedure
TDTreasury Decision
CDCourt Decision
PLPublic Law
EOExecutive Order
DODelegation Order
TDOTreasury Department Order
TCTax Convention
SPRStatement of Procedural
Rules
PTEProhibited Transaction
Exemption
EMPLOYMENT TAXES
Backup withholding:
Substitute Form W–9 (RP 26) 8, 22
Forms, electronic filing, magnetic
media, Form 1042–S (RP 11) 2,
18; correction (Notice 20) 14, 30
Proposed regulations:
26 CFR 31.3306(r)(2)–1, added;
FUTA taxation of amounts under
employee benefit plans (EE–55–
95) 12, 12
26 CFR 31.6302–1(h)(1)(ii)(A)(2),
added; 31.6302–1(h)(2), –(3), –(7)
and –(8), revised; federal tax
deposits by electronic funds trans-
fer (IA–03–94) 17, 12
26 CFR 31.9999–0, added; effective
date of temporary backup with-
holding regs (IA–33–95) 4, 99
Partial withdrawal of proposed regula-
tions INTL–52–86 (Notice 4) 4, 69
Regulations:
2 6 C F R 3 1 . 3 4 0 2 ( r ) – 1 a d d e d ;
31.3402(r)–IT, removed; withhold-
ing on distributions of Indian
gaming profits to tribal members
(TD 8634) 3, 17
EMPLOYMENT TAXES—
Continued
Regulations—Continued
26 CFR 31.3406(g)–1(d), added; infor-
mation reporting and backup with-
holding (TD 8664) 20, 7
2 6 C F R 3 1 . 3 4 0 6 – 0 r e v i s e d ;
3 1 . 3 4 0 6 ( a ) – 1 — 3 1 . 3 4 0 6 ( i ) – 1 ,
31.6051–4, 31.6413(a)–3, added;
35a.9999.OT, 35a.3406–2, re-
moved; 301.6109–1, amended;
backup withholding statement
mailing requirements, and due dili-
gence (TD 8637) 4, 29
26 CFR 31.6051–1(d), 31.6071(a)–
1(a)(3), amended; 31.6051–2(c),
31.6081(a)–1(a)(3), 301.6011–
2(c)(4)(i), revised; time for fur-
nishing wage statements on termi-
nation of employer’s operations
(TD 8636) 4, 64; correction
(Notice 21) 14, 30
26 CFR 31.6302–IT(h)(1)(ii)(A)(2),
added; 31.6302–IT(h)(2), –(3),
–(7), –(8), revised; federal tax
deposits by electronic funds trans-
fer (TD 8661) 17, 7
26 CFR 33 and 38, removed; parts
declared obsolete (TD 8655) 12, 9
26 CFR 301.6109–1, amended gran-
tor trust reporting requirements
(TD 8633) 4, 20
26 CFR 301.7507–1, 301.7507–0,
amended; treatment of acquisition
of certain financial institutions
(TD 8641) 6, 4
26 CFR 301.7701–3, amended; cost
sharing arrangements (TD 8632) 4,
6
26 CFR 301.9100–7T, amended;
generation-skipping transfer tax
(TD 8644) 7, 16
Returns:
Information, electronic filing; Form
941 (RP 19) 4, 80
Magnetic tape reporting: Forms 940,
941, and 945 (RP 18) 4, 73
Reporting agents, Form 8655 (RP
17) 4, 69
ESTATE & GIFT TAXES
ADMINISTRATIVE
Proposed regulations:
26 CFR 301.6103(n)–1, amended;
disclosure of returns and return
information to procure property or
services for tax administration pur-
poses (DL–1–95) 6, 28
ESTATE & GIFT TAXES
ADMINISTRATIVE—
Continued
Regulations:
26 CFR 20.2035–1; 26 CFR 23 and
24, 25.2517–1, removed; regula-
tions declared obsolete (TD 8655)
12, 9
26 CFR 301.6109–1, amended; gran-
tor trust reporting requirements
(TD 8633) 4, 20
26 CFR 301.6011–2(c)(4)(i), revised;
time for furnishing wage state-
ments on termination of em-
ployer’s operations (TD 8636) 4,
64
26 CFR 301.7507–1, 301.7507–0,
amended; treatment of acquisition
of certain financial institutions
(TD 8641) 6, 4
26 CFR 301.7701–3, amended; cost
sharing arrangements (TD 8632) 4,
6
26 CFR 301.9100–7T, amended;
generation-skipping transfer tax
(TD 8644) 7, 16
ESTATE TAXES
Annuities, valuation, terminally ill
measured life (RR 3) 1, 14
Regulations:
26 CFR 20.2035–1, removed; regula-
tions declared obsolete (TD 8655)
12, 9
26 CFR 20.7520–3, amended; ac-
turial tables exceptions (TD 8630)
3, 19
26 CFR Part 26, revised; 301.9100–
7T, amended; generation-skipping
transfer tax (TD 8644) 7, 16
Special use value; farms; interest rates
(RR 23) 15, 11
Tax conventions, competent authority
procedures (RP 13) 3, 31
GIFT TAXES
Annuities, valuation, terminally ill
measured life (RR 3) 1, 14
Regulations:
26 CFR 25.2517–1, removed; regula-
tions declared obsolete (TD 8655)
12, 9

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GIFT TAXES—Continued
Regulations—Continued
26 CFR 25.2522(c)–3, 25.7520–3
amended; actuarial tables excep-
tions (TD 8630) 3, 19; correction
(Notice 22) 14, 30
26 CFR 25.2702–3, amended; gran-
tor trust reporting requirements
(TD 8633) 4, 20
26 CFR 25.2702–5, 25.2702–7,
amended; sale of residence from
qualified personal residence trust
(PS–4–96) 18, 5
Tax conventions, competent authority
procedures (RP 13) 3, 31
EXCISE TAXES
Proposed regulations:
26 CFR 48.4081–8; 48.4082–1, re-
vised; 41.4101–1, amended; gas-
oline and diesel fuel dye injection
systems (PS–6–95) 16, 27
26 CFR 48.4101–1(c), 48.4101–2T;
gasoline sale or removal and tax
bond requirements, withdrawn
(Notice 26) 18, 4
26 CFR 301.6103(n)–1, amended;
disclosure of returns and return
information to procure property or
services for tax administration pur-
poses (DL–1–95) 6, 28
Regulations:
26 CFR 48.4081–4, 48.4082–1, –2T,
48.4101–3T, –4T, 48.6427–8T,
–9T, removed; 48.4082–1, –2,
48.4101–1, –2, 48.6427–8, –9,
added; 48.4041–0T, removed;
48.4041–1, –2, –2T, removed;
48.4041–21, amended; 48.4041–
1 5 — 4 8 . 4 0 4 1 – 2 1 , t r a n s f e r r e d ;
48.4042–1, amended; 48.4064–
1(e)(2), amended; 48.4081–1, –2,
–3, revised; 48.4081–4, –5, –7,
amended; 48.4081–6, –8, revised;
48.4081–10T, –11T, –12T, re-
m o v e d ; 4 8 . 4 0 8 2 – 1 , r e v i s e d ;
48.4082–2T, –3T, –4T, 48.4083,
removed; 48.4082–2, –3, –4,
48.4083–1, added; 48.4101–2T,
–3, –3T, –4T, removed; 48.4102–
1, amended; 48.4221, removed;
48.4221–1, –2, –5, amended;
48.4221–8, –9, –10, –12, removed;
4 8 . 4 2 2 1 – 1 1 , r e d e s i g -
nated; 48.4222(a)–1, (b)–1, re-
vised; 48.4222(d)–1, amended;
4 0 . 6 0 1 1 ( a ) – 1 ( b ) , a m e n d e d ;
40.6011(a)–3T, removed; Part 42,
EXCISE TAXES—
Continued
Regulations—Continued
removed; 48.6206–1, removed;
4 8 . 6 4 1 6 ( b ) ( 2 ) – 2 , a m e n d e d ;
48.6416(g)–1, removed; 48.6421–
3, amended; 48.6424–0—48.6424–
6, removed; 48.6427–3, –7,
amended; 48.6427–8, –9, added;
4 8 . 6 4 2 7 – 8 T , – 9 T , r e m o v e d ;
48.6675–1, removed; 48.6714–1,
added; gasoline and diesel fuel
registration requirements (TD
8659) 16, 4
26 CFR 301.7507–1, 301.7507–0,
amended; treatment of acquisition
of certain financial institutions
(TD 8641) 6, 4
26 CFR 301.9100–7T, amended;
generation-skipping transfer tax
(TD 8644) 7, 16
26 CFR 53.4941(d)–2, amended;
self-dealing for private foundations
(TD 8639) 5, 12
26 CFR 301.6011–2(c)(4)(i), revised;
time for furnishing wage state-
ments on termination of em-
ployer’s operations (TD 8636) 4,
64
26 CFR 301.6109–1, amended; gran-
tor trust reporting requirements
(TD 8633) 4, 20
26 CFR 301.7701–3, amended; cost
sharing arrangements (TD 8632) 4,
6
INCOME TAX
Administration:
Advance valuation of art (RP 15) 3,
41
Delegation of authority:
Authority of Taxpayer Ombuds-
man (DO 239 [Rev. 1]) 7, 49
Authority to modify or rescind
TAO (DO 232 [Rev. 2]) 7, 49
Unagreed issues, referral to Appeals
(RP 9) 2, 15
Annuities and pensions, valuation, ter-
minally ill measured life (RR 3) 2,
14
Application of appeals settlement to
coordinated examination program
taxpayers (D.O. 236 (Rev. 2)) 21, 7
Authority of exam case managers to
accept settlement offers and execute
closing agreements on ISP and
IFASP issues (D.O. 247) 21, 7
INCOME TAX—Continued
Automobiles:
Owners and lessees, limitations on
depreciation (RP 25) 8, 19
Books and records:
Imaging systems (Notice 10) 7, 47
Butyl benzyl phthalate determination
(Notice 28) 19, 7
Capital expenditures (Notice 7) 6, 22
Changes in computing depreciation or
amortization (RP 31) 20, 11
Checklist questionnaire (RP 30) 19, 8
Consolidated returns, single-entity elec-
tion (RP 21) 4, 96
Credit against tax:
Enpowerment zone employment, in-
tent to issue regulations (Notice 1)
3, 30
Differential earnings rate (Notice 15)
13, 19
Employee plans:
Administrative, COBRA premium is-
sues (RR 8) 4, 62
Closing agreements (RP 29) 16, 24
Determination letters (RP 6) 1, 51
Funding:
Full funding limitations, weighted
average interest rate, Dec. 1995
(Notice 2) 2, 15; Jan. 1996
(Notice 9) 6, 26; Feb. 1996
(Notice 11) 8, 19; March 1996
(Notice 16) 13, 20; April 1996
(Notice 24) 16, 23; May 1996
(Notice 32) 22, 7
Mortality tables (RR 7) 3, 12
Retirement Protection Act of 1994
(RR 20) 15, 5; (RR 21) 15, 7
Single sum distributions amounts,
cash balance plans (Notice 8) 6,
23
Estimate tax payments for individuals
(Notice 5) 6, 22
Estate and trusts:
Valuations, transfers to pooled in-
come funds (RR 1) 1, 7
Foreign insurance companies, domes-
tic asset/liability and investment
yield (RP 23) 5, 27
Forms:
Substitute Forms W–2 and W–3,
specifications (RP 24) 5, 28; (RP
24A) 15, 12
Fringe benefits aircraft valuation for-
mula (RR 25) 19, 4
Insurance companies:
Life, interest rate tables (RR 2) 2, 5

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INCOME TAX—Continued
Interest:
Investment:
Federal short-term, mid-term and
long-term rates, Jan. 1996 (RR
6) 2, 8; Feb. 1996 (RR 14) 6,
20; March 1996 (RR 15) 11, 9;
April 1996 (RR 19) 14, 24; May
1996 (RR 24) 19, 5
Rates, underpayments and over-
payments (RR 17) 13, 5
Interest netting study (Notice 18) 14,
27
Inventories:
LIFO:
Price indexes, department stores,
Nov. 1995 (RR 9) 4, 5; Dec.
1995 (RR 12) 9, 4; Jan. 1996
(RR 18) 13, 4; Feb. 1996 (RR
22) 15, 9; March 1996 (RR 26)
21, 5
Investment:
Inflation adjustment for 1996 (RR 4)
3, 16
Joint return study (Notice 19) 14, 28
Loans:
CPI adjustment for below market
loans—1996 (RR 5) 3, 29
S u b j e c t t o p r i n c i p a l - r e d u c t i o n
method of accounting and mark-to
market rules (Notice 23) 16, 23
Low-income housing credit:
Bond factor amounts Jan.–Mar. 1996
(RR 16) 11, 4
Tax credit (RR 27) 11, 27
Low-income housing guidelines (RP
32) 20, 14
Major disaster areas (RR 13) 10, 19
Mark to market, securities dealers
(Notice 12) 10, 29
Nonconventional source fuel credit
(Notice 29) 19, 7
Partnerships:
Charitable contribution of property
(RR 11) 4, 28
Sales between partners, basis (RR
10) 4, 27
Payments from Presidential Election
Campaign Fund (Notice 13) 10, 29
Per diem allowances (RP 28) 14, 31
Property (contributed or other) distribu-
tion; recognition of gain or loss by
contributing partner; correction
(Notice 17) 13, 20
INCOME TAX—Continued
Proposed regulations:
26 CFR 1.72–17A, amended: 1.72–
17A(d)(1), added; 1.72(p)–1,
added; loans to plan participants
(EE–106–82) 10, 31
26 CFR 1.125–3, added; effect of
Family and Medical Leave Act of
1993 on the operation of cafeteria
plans (EE–20–95) 5, 15
26 CFR 1.163–5, 1.165–12(c),
amended; 1.871–14, 1.1441–0,
added; 1.1441–1, revised; 1.1441–
3, –4, amended; 1.1441–4T, re-
moved; 1.1441–5, –6, –7, revised;
1.1441–8T, amended; 1.1441–9,
added; 1.1442–1, –2, revised;
1 . 1 4 4 2 – 3 , a d d e d ; 1 . 1 4 4 3 – 1 ,
amended; 1.1461–1, –2, revised;
1.1461–3, –4, removed; 1.1462–1,
a m e n d e d ; 1 . 4 6 3 – 1 , r e v i s e d ;
1.6041–1, –3, amended; 1.6041–4,
revised; 1.6041A–1, 1.6042–3,
1.6045–1, amended; 1.6049–4, re-
v i s e d ; 1 . 6 0 4 9 – 4 ( d ) ( 3 ) , – 5 ,
1 . 6 0 5 0 N – 1 , 3 1 . 3 4 0 1 ( a ) ( 6 ) – 1 ,
amended; 31.3406(d)–3, revised;
3 1 . 3 4 0 6 ( g ) – 1 ( e ) , a d d e d ;
3 1 . 3 4 0 6 ( h ) – 2 , 3 1 . 6 4 1 3 ( a ) – 3 ,
amended; 35a.9999–1—3A, –4T,
removed; 301.6109–1, 301.6114–1,
301.6402–3, amended; withholding
of tax under sections 1441 and
1442 on certain U.S. source in-
come paid to foreign persons
( I N T L – 6 2 – 9 0 ; I N T L – 3 2 – 9 3 ;
INTL–52–86; INTL–52–94) 19, 26
26 CFR 1.351–1(a)(3), 1.721–1(c),
added; treatment of underwriters in
sections 351 and 721 transactions
(TD 8665) 21, 4
26 CFR 1.367–9, added (INTL–9–
95) 5, 24
26 CFR 1.409–1(b)(2)(i), retirement
bonds withdrawn (EE–118–81) 11,
29
26 CFR 1.411(c)–1, amended; alloca-
tion of accrued benefits between
employer and employee contribu-
tions (EE–20–95) 5, 15
26 CFR 1.411(d)(6), added; future
benefit accrual (EE–34–95) 3, 49
26 CFR 1.501(c)(5)–1, amended;
requirements for tax-exempt orga-
nizations (EE–53–95) 5, 23
26 CFR 1.731–2, added; distribution
of marketable securities by a part-
nership (PS–2–95) 7, 50
INCOME TAX—Continued
Regulations—Continued
26 CFR 1.863–0, added; 1.863–1, –2,
–3, revised; 1.863–4, amended;
1.863–5, removed; source of in-
come from sales of inventory and
natural resources produced in one
jurisdiction and sold in another
(INTL–3–95) 6, 29
26 CFR 1.882–5, 1.884–1, amended;
effectively connected income and
branch profits tax (INTL–54–95)
14, 39
2 6 C F R 1 . 1 2 5 4 – 0 , 1 . 1 2 5 4 – 4 ,
amended; treatment of gain from
disposition of interest in certain
natural resource recapture property
by S corporations (PS–7–89) 8, 24
26 CFR 1.6081–4(a), revised:
1.6081–4(d), added; automatic ex-
tension of time for filing individ-
ual tax returns (IA–41–93) 11, 29
26 CFR 1.6302–4, added; federal tax
deposits by electronic funds trans-
fer (IA–03–94) 17, 12
26 CFR 31.3121(v)(2)–1, –2, added;
FICA taxation amounts under
employee benefit plans (EE–142–
87) 12, 13
26 CFR 31.3306(r)(2)–1, added;
FUTA taxation amounts under
employee benefit plans (EE–55–
95) 12, 12
26 CFR 301.6651–1(c)(3), revised;
failure to file return or pay tax
(IA–41–93) 11, 29
26 CFR 301.6103(n)–1, amended;
disclosure of returns and return
information to procure property or
services for tax administration pur-
poses (DL–1–95) 6, 28
26 CFR 301.7811–1(d), –(h), re-
vised; authority to modify or re-
scind TAOs (GL–1–96) 21, 9
Property (contributed or other) distribu-
tion; recognition of gain or loss by
contributing partner; correction
(Notice 17) 13, 20
Regulations:
26 CFR 1.162–27, added; dis-
allowance of deductions for
employee remuneration in excess
of $1,000,000 (TD 8650) 10, 5;
TD 8650 corrected (Notice 14) 12,
11
26 CFR 1.168(h)–1; 1.168(i)(2),
added; lease term tax-exempt use
property (TD 8667) 20, 4
26 CFR 1.305–3, –5, –7, amended;
distribution of stock and stock
rights (TD 8643) 11, 4

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24
INCOME TAX—Continued
Regulations—Continued
26 CFR 1.367(a)–3T, amended; cer-
tain transfers of domestic stock or
securities by U.S. persons to for-
eign corporations (TD 8638) 5, 5
26 CFR 1.385–2(d), removed; 1.358–
6, 1.1032–2, 1.1502–30, added;
controlling corporation’s basis ad-
justment (TD 8648) 10, 23
26 CFR 1.401–12(n) redesignated
1.408–2(e); 1.401–12T, removed;
1.401(f)–1, 1.408–2, amended;
nonbank trustee net worth require-
ments (TD 8635) 3, 5
26 CFR 1.411(d)–6T, added; notice
of significant reduction in the rate
of future benefit accrual (TD
8631) 3, 7
26 CFR 1.469–0, 1.469–4, 1.469–11,
amended; 1.469–9, revised; rules
for certain rental real estate ac-
tivities (TD 8645) 8, 4
26 CFR 1.482–0, 301.7701–3,
amended; 1.482–7, added; 1.482–
7T, removed; section 482 cost
sharing arrangements (TD 8632) 4,
6
26 CFR 1.508–1, 1.6033–2 amended;
exempt organization not required
to file annual returns, integrated
auxiliaries of churches (TD 8640)
2, 10
26 CFR 1.597–1—1.597–7, added;
301.7507–1, 301.7507–9, amended;
treatment of acquisition of certain
financial institutions (TD 8641) 6, 4
26 CFR 1.671–4, revised; 1.6012–3,
301.6109–1, amended; grantor
trust reporting requirements (TD
8633) 4, 20
2 6 C F R 1 . 6 7 1 – 4 , 1 . 6 7 7 ( a ) – 1 ,
amended; 301.7701–4(e), added;
environmental settlement funds
classification (TD 8668) 22, 4
26 CFR 1.704–4, 1.737–1 through
1.737–5, added; recognition of gain
or loss by contributing partner on
distribution of contributed property
or other property (TD 8642) 7, 4
26 CFR 1.861–8, amended; 1.861–17,
added; allocation and apportion-
ment of research and experimental
expenditures (TD 8646) 8, 10
26 CFR 1.861–9T, amended; 1.822–
0, added; 1.882–5, revised; interest
expense deduction of foreign cor-
porations (TD 8658) 14, 13
INCOME TAX—Continued
Regulations—Continued
26 CFR 1.864–4, 1.871–12, 1.884–
0(b), amended; 1.884–1(d)(4),
1.884–2T(a)(5), 1.884–4(b)(1) and
(2), revised; 1.884–1(i)(4), 1.884–
2T(a)(6), 1.884–4(e)(1) and (2),
added; effectively connected in-
come and branch profits tax (TD
8657) 14, 4
26 CFR 1.952–3, 1.957–1, corrected;
definition of a controlled foreign
corporation, foreign base company
income, and foreign personal hold-
ing company income of a con-
trolled foreign corporation (Notice
33) 22, 8
26 CFR 1.1258–1, added; conversion
transactions (TD 8649) 9, 5
26 CFR 1.1301–1, 1.32–1, 1.103–12,
1.110–1, 1.114–1, 1.115–1, 1.116–
1, –2, 1.367(a)–7T, 1.383–1A,
–2A, –3A, 1.804–1, 1.805–1
through –8 and intermediate sec-
tions, 1.820–1, –2, –3, 1.824–1,
– 2 , – 3 , r e m o v e d ; 1 . 9 0 7 – 0 ,
amended; 1.907(e)(1), 1.907(a)–
0A, –1A, 1.907(b)–1A, –2A,
1.907(c)–1A, –2A, –3A, 1.907(d)–
1A, 1.907(e)–1A, 1.907(f)–1A,
1.995–7, 1301–0 through –3 and
intermediate sections, 1.1303–1,
1.1304–1 through –6 and inter-
mediate sections, removed; regula-
tions declared obsolete (TD 8655)
12, 9
26 CFR 1.1445–1, 1.1445–8(c)(2)(i),
revised; 1.1445–5, amended; with-
holding of tax on dispositions of
U.S. real property interests by
foreign persons (TD 8647) 9, 7
2 6 C F R 1 . 1 5 0 2 – 1 3 , r e v i s e d ;
1.267(f)–1(k), amended; 1.1502–
13(f)(6), added; 1.1502–13(g)(2)-
(i)(B), amended; consolidated
groups intercompany transactions
and related rules (TD 8660) 17, 4
26 CFR 1.6042–4, 1.6044–5, revised;
1.6049–6, 301.6109–1, amended;
1.6050N–1, added Backup with-
holding, statement mailing require-
ments and due diligence (TD
8637) 4, 29
26 CFR 1.6049–4, –5, –6, amended;
1.6049–8, added; information re-
porting and backup withholding
(TD 8664) 20, 7
26 CFR 1.6050I–0T, –2T, removed;
1.6050I–0, –2, added; cash report-
ing by court clerks (TD 8652) 11,
11
INCOME TAX—Continued
Regulations—Continued
26 CFR 1.6050P–0, –1, added,
1.6050P–0T, –1T, removed; infor-
mation reporting for discharges of
indebtedness (TD 8654) 11, 14
26 CFR 1.6081–4, amended; 1.6081–
4T, added; automatic extension of
time for filing income tax returns
(TD 8651) 11, 24
26 CFR 1.6302–4T, added; federal
tax deposits by electronic funds
transfer (TD 8661) 17, 7
26 CFR 1.6662–0, –6T, removed;
1.6662.5T, revised; 1.6662–6,
added; imposition of accuracy-
related penalty (TD 8656) 13, 9
26 CFR 301.6011–2(c)(4)(i), revised;
time for furnishing wage state-
ments upon termination of em-
ployer’s operations (TD 8636) 4,
64
26 CFR 301.6311–1, corrected; pay-
ment of tax by check or money
order (Notice 27) 18, 4
26 CFR 1.7520–3, amended; actu-
arial tables exceptions (TD 8630)
3, 19
26 CFR 301.6676–1, 301.7424–1,
removed; regulations declared ob-
solete (TD 8655) 12, 9
26 CFR 301.9100–7T, amended;
generation-skipping transfer tax
(TD 8644) 7, 16
Relief from filing Form 3115 for
501(c) orgs. (Notice 30) 20, 11
Returns:
Form 990, church affiliated organiza-
tions exempt from filing (RP 10)
2, 17
On-line service electronic filing pro-
gram; Form 1040 (RP 20) 4, 88
Renewable electricity production credit:
1996 inflation adjustment factor and
reference prices (Notice 25) 17, 11
Rulings:
Areas in which advance rulings
willing to be issued:
Associate Chief Counsel (Domes-
tic), Associate Chief Counsel
(Employee Benefits and Exempt
Organizations) (RP 3) 1, 86
Associate Chief Counsel (Interna-
tional) (RP 7) 1, 185
Areas in which rulings will not be
issued (RP 12) 3, 30
Employee plans and exempt organi-
zations user fees correction (RP
8A) 9, 10

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REVISED 01JUL96 AT 03:34 BY LR DEPTH: 65.01 PICAS WIDTH 32.10 PICAS
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25
INCOME TAX—Continued
Rulings—Continued
Letter rulings, determination letters,
and information letters, Associate
Chief Counsel (Domestic), Associ-
ate Chief Counsel (Employee Ben-
efits and Exempt Organizations),
Associate Chief Counsel (Enforce-
ment Litigation) and Associate
Chief Counsel (International) (RP
1) 1, 8
No-rule provision, combining trans-
actions (RP 22) 5, 27 (Notice 6) 5,
27
Tax-exempt bonds, issuance pro-
cedrues (RP 16) 3, 45
Technical advice, employee plans
and exempt organizations (RP 5)
1, 129
Technical advice to the District Direc-
tors and Chiefs, Appeals Offices,
from the Associate Chief Counsel
INCOME TAX—Continued
Rulings-Continued
(Domestic), Associate Chief Coun-
sel (Employee Benefits and Ex-
empt Organizations), Associate
Chief Counsel (Enforcement Liti-
gation), and Associate Chief
Counsel (International) (RP 2) 1,
60
Rulings and determination letters, issu-
ance procedures (RP 4) 1, 94
Tax conventions:
Competent authority procedure (RP
13) 3, 31
Relief in treaty cases (RP 14) 3, 41
U.S.-Canada income tax treaty, RRSPs
and RRIFs (Notice 31) 22, 7
User fees for employee plans and exempt
organizations (RP 8) 1, 187
Waiver Rev. Proc., section 911(d)(4) (RP
33) 22, 8