Internal Revenue Bulletin 1996-32 (PDF rendition): IRS Notices

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INCOME TAX
Rev. Rul. 96–37, page 4.
Federal rates; adjusted federal rates; adjusted fed-
eral long-term rate, and the long-term exempt rate.
For purposes of sections 1274, 1288, 382, and other
sections of the Code, tables set forth the rates for
August 1996.
Rev. Proc. 96–41, page 9.
Tax-exempt bonds; arbitrage.If an issuer of state or
local bonds used the proceeds of those bonds to pay
more than fair market value for nonpurpose investments
deposited into an advance refunding escrow, procedures
are provided for an issuer to request a closing agree-
ment pursuant to which the purchase of those invest-
ments alone will not cause sections 103(b)(2) and 148
of the Code to apply to those bonds.
EXEMPT ORGANIZATIONS
Rev. Proc. 96–40, page 8.
Exempt organizations holding group exemption letters
should file the annual reports required to maintain a
group exemption letter at the Ogden Service Center. Rev.
Proc. 80–27 modified.
Announcement 96–69, page 38.
A list is given of organizations now classified as private
foundations.
Announcement 96–70, page 40.
The Frank Nappi Foundation no longer qualifies as an
organization to which contributions are deductible under
section 170 of the Code.
ADMINISTRATIVE
Rev. Proc. 96–42, page 14.
Requirements are set forth for reproducing paper substi-
tutes for Forms 1096, 1098, 1099 series, 5498, and
W–2G, and for furnishing substitute statements to form
recipients. Rev. Proc. 89–42 superseded.
Notice 96–39, page 8.
This notice states that the Service disagrees with the
Eighth Circuit’s decision in
Brown Group v. Commis-
sioner77 F.3d 217 (8th Cir. 1996),vacating and
remanding
104 T.C. 105 (1995). Also, the Service
intends to issue regulations under subpart F confirming
that whether a controlled foreign corporation (‘‘CFC’’)
partner’s distributive share of partnership income is
subpart F income generally is determined at the CFC
partner level.
Finding Lists begin on page 42.
Announcement of Declaratory Judgment Proceedings Under Section 7428 on page 40.
Monthly Index for July on page 44.
Bulletin No. 1996–32
August 5, 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.

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.
2

Introduction
The Internal Revenue Bulletin is the authoritative instru-
ment of the Commissioner of Internal Revenue for
announcing official rulings and procedures of the Inter-
nal Revenue Service and for publishing Treasury Deci-
sions, Executive Orders, Tax Conventions, legislation,
court decisions, and other items of general interest. It is
published weekly and may be obtained from the Superin-
tendent of Documents on a subscription basis. Bulletin
contents of a permanent nature are consolidated semi-
annually 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. Proce-
dures 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 Ser-
vice 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 unwar-
ranted 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 consid-
ered, and Service personnel and others concerned are
cautioned against reaching the same conclusions in
other cases unless the facts and circumstances are
substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on
provisions of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows:
Subpart A, Tax Conventions, and 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 Administra-
tive Rulings are issued by the Department of the
Treasury’s Office of the Assistant Secretary (Enforce-
ment).
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.
3

Part I. Rulings and Decisions Under the Internal Revenue Code of 1986
Section 42.—Low-Income Housing
Credit
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the
month of August 1996. See Rev. Rul. 96–37, on
this page.
Section 103.—Interest on State and
Local Bonds
If an issuer of state or local bonds has used the
proceeds of those bonds to pay more than fair
market value for nonpurpose investments depos-
ited into an advance refunding escrow, what are
the procedures that an issuer may follow to
request a closing agreement pursuant to which the
purchase of those investments alone will not be
sufficient to cause §§ 103(b)(2) and 148 of the
Internal Revenue Code to apply to those bonds?
See Rev. Proc. 96–41, page 9.
Section 280G.—Golden Parachute
Payments
Federal short-term, mid-term, and long-term
rates are set forth for the month of August 1996.
See Rev. Rul. 96–37, on this page.
Section 382.—Limitation on Net
Operating Loss Carryforwards and
Certain Built-In Losses Following
Ownership Change
The adjusted federal long-term rate is set forth
for the month of August 1996. See Rev. Rul.
96–37, on this page.
Section 408.—Individual
Retirement Accounts
26 CFR 1.408–5: Annual reports by trustees or
issuers.
Specifications for paper substitutes for Form
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
26 CFR 1.408–7: Reports on distributions from
individual retirement plans.
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
Section 412.—Minimum Funding
Standards
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the
month of August 1996. See Rev. Rul. 96–37, on
this page.
Section 467.—Certain Payments
for the Use of Property or Services
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the
month of August 1996. See Rev. Rul. 96–37, on
this page.
Section 468.—Special Rules for
Mining and Solid Waste
Reclamation and Closing Costs
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the
month of August 1996. See Rev. Rul. 96–37, on
this page.
Section 483.—Interest on Certain
Deferred Payments
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the
month of August 1996. See Rev. Rul. 96–37, on
this page.
Section 501.—Exemption From Tax
on Corporations, Certain Trusts,
Etc.
26 CFR 1.501(a)–1: Exemption from taxation.
Procedure provides that exempt organizations
that hold group exemption letters should file the
group exemption information required annually by
Rev. Proc. 80–27, 1980–1 C.B. 677, with the
Ogden Service Center, Mail Stop 6271, 1000
South 1200 West, Ogden, UT 84404–4749. Rev.
Proc. 80–27 modified. See Rev. Proc. 96–40,
page 8.
Section 807.—Rules for Certain
Reserves
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the
month of August 1996. See Rev. Rul. 96–37, on
this page.
Section 846.—Discounted Unpaid
Losses Defined
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the
month of August 1996. See Rev. Rul. 96–37, on
this page.
Section 1274.—Determination of
Issue Price in the Case of Certain
Debt Instruments Issued for
Property
(Also Sections 42, 280G, 382, 412, 467, 468, 482,
483, 807, 846, 1288, 7520, 7872.)
Federal rates; adjusted federal
rates; adjusted federal long-term rate,
and the long-term exempt rate.For
purposes of sections 1274, 1288, 382,
and other sections of the Code, tables
set forth the rates for August 1996.
Rev. Rul. 96–37
This revenue ruling provides various
prescribed rates for federal income tax
purposes for August 1996 (the current
month.) Table 1 contains the short-term,
mid-term, and long-term applicable fed-
eral rates (AFR) for the current month
for purposes of section 1274(d) of the
Internal Revenue Code. Table 2 contains
the short-term, mid-term, and long-term
adjusted applicable federal rates (ad-
justed AFR) for the current month for
purposes of section 1288(b). Table 3
sets forth the adjusted federal long-term
rate and the long-term tax-exempt rate
described in section 382(f). Table 4
contains the appropriate percentages for
determining the low-income housing
credit described in section 42(b)(2) for
buildings placed in service during the
current month. Finally, Table 5 contains
the federal rate for determining the
present value of an annuity, an interest
for life or for a term of years, or a
remainder or a reversionary interest for
purposes of section 7520.
4

REV. RUL. 96–37 TABLE 1
Applicable Federal Rates (AFR) for August 1996
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-Term
AFR6.15%6.06%6.01%5.98%
110% AFR6.78%6.67%6.62%6.58%
120% AFR7.40%7.27%7.21%7.16%
130% AFR8.04%7.88%7.80%7.75%
Mid-Term
AFR6.84%6.73%6.67%6.64%
110% AFR7.54%7.40%7.33%7.29%
120% AFR8.24%8.08%8.00%7.95%
130% AFR8.94%8.75%8.66%8.59%
150% AFR10.36%10.10%9.98%9.89%
175% AFR12.13%11.78%11.61%11.50%
Long-Term
AFR7.21%7.08%7.02%6.98%
110% AFR7.94%7.79%7.72%7.67%
120% AFR8.68%8.50%8.41%8.35%
130% AFR9.41%9.20%9.10%9.03%
REV. RUL. 96–37 TABLE 2
Adjusted AFR for August 1996
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term
adjusted AFR3.97%3.93%3.91%3.90%
Mid-term
adjusted AFR4.89%4.83%4.80%4.78%
Long-term
adjusted AFR5.80%5.72%5.68%5.65%
REV. RUL. 96–37 TABLE 3
Rates Under Section 382 for August 1996
Adjusted federal long-term rate for the current month5.80%
Long-term tax-exempt rate for ownership changes during the current month (the highest of the
adjusted federal long-term rates for the current month and the prior two months)5.80%
REV. RUL. 96–37 TABLE 4
Appropriate Percentages Under Section 42(b)(2) for August 1996
Appropriate percentage for the 70% present value low-income housing credit8.65%
Appropriate percentage for the 30% present value low-income housing credit3.71%
5

REV. RUL. 96–37 TABLE 5
Rate Under Section 7520 for August 1996
Applicable federal rate for determining the present value of an annuity, an interest for life or a
term of years, or a remainder or reversionary interest8.2%
Section 1288.—Treatment of
Original Issue Discount on
Tax-Exempt Obligations
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the
month of August 1996. See Rev. Rul. 96–37, page
4.
Section 6041.—Information at
Source
26 CFR 1.6041–1: Return of information as to
payments of $600 or more.
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
26 CFR 7.6041–1: Return of information as to
payments of winnings from bingo, keno, and slot
machines (Temporary).
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
Section 6041A.—Returns
Regarding Payments of
Remuneration for Services and
Direct Sales
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
Section 6042.—Returns Regarding
Payments of Dividends and
Corporate Earnings and Profits
26 CFR 1.6042–2: Returns of information as to
dividends paid in calendar years after 1962.
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
26 CFR 1.6042–4: Statements to recipients of
dividend payments.
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
Section 6043.—Liquidating, Etc.,
Transactions
26 CFR 1.6043–2 Return of information respect-
ing distributions in liquidation.
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
Section 6044.—Returns Regarding
Payments of Patronage Dividends
26 CFR 1.6044–2: Returns of information as to
payments of patronage dividends with respect to
patronage occurring in taxable years beginning
after 1962.
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
26 CFR 1.6044–5: Statements to recipients of
patronage dividends.
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
Section 6045.—Returns of Brokers
26 CFR 1.6045–1: Returns of information of
brokers and barter exchanges.
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
26 CFR 1.6045–2: Furnishing statement required
with respect to certain substitute payments.
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
26 CFR 1.6045–4: Information reporting on real
estate transactions with dates of closing on or
after January 1, 1991.
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
Section 6047.—Information
Relating to Certain Trusts and
Annuity Plans
26 CFR 1.6047–1: Information to be furnished
with regard to employee retirement plan covering
an owner-employee.
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
Section 6049.—Returns Regarding
Payments of Interest
26 CFR 1.6049–4: Return of information as to
interest paid and original issue discount includible
in gross income after December 31, 1982.
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
26 CFR 1.6049–6: Statements to recipients of
interest payments and holders of obligations for
attributed original issue discount.
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
26 CFR 1.6049–7: Returns of information with
respect to REMIC regular interests and collateral-
ized debt obligations.
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
Section 6050A.—Reporting
Requirements of Certain Fishing
Boat Operators
26 CFR 1.6050A–1: Reporting requirements of
certain fishing boat operators.
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
Section 6050B.—Returns Relating
to Unemployment Compensation
26 CFR 1.6050B–1: Information returns by person
making unemployment compensation payments.
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
Section 6050D.—Returns Relating
to Energy Grants and Financing
26 CFR 1.6050D–1: Information returns relating
to energy grants and financing.
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
Section 6050E.—State and Local
Income Tax Refunds
26 CFR 1.6050E–1: Reporting of state and local
income tax refunds.
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
6

Section 6050H.—Returns Relating
to Mortgage Interest Received in
Trade or Business From Individuals
26 CFR 1.6050H–1: Information reporting of
mortgage interest received in a trade or business
from an individual.
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
26 CFR 1.6050H–2: Time, form, and manner of
reporting interest received on qualified mortgage.
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
Section 6050J.—Returns Relating
to Foreclosures and Abandonments
of Security
26 CFR 1.6050J–1T: Questions and answers con-
cerning information returns relating to foreclo-
sures and abandonments of security (Temporary).
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
Section 6050N.—Returns
Regarding the Payment of
Royalties
26 CFR 1.6050N–1: Statements to recipients of
royalties.
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
Section 6050P.—Returns Relating
to the Cancellation of Indebtedness
by Certain Financial Entities
26 CFR 1.6050P–1T: Information reporting for
discharges of indebtedness by certain financial
entities (temporary).
26 CFR 1.6050P–1: Information reporting for
discharges of indebtedness by certain financial
entities.
Specifications for paper substitutes for Forms
1096, 1098, 1099, 5498, and W–2G. See Rev.
Proc. 96–42, page 14.
Section 7121.—Closing
Agreements
If an issuer of state or local bonds has used the
proceeds of those bonds to pay more than fair
market value for nonpurpose investments depos-
ited into an advance refunding escrow, what are
the procedures that an issuer may follow to
request a closing agreement pursuant to which the
purchase of those investments alone will not be
sufficient to cause §§ 103(b)(2) and 148 of the
Internal Revenue Code to apply to those bonds?
See Rev. Proc. 96–41, page 9.
Section 7520.—Valuation Tables
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the
month of August 1996. See Rev. Rul. 96–37,
page 4.
Section 7872.—Treatment of Loans
with Below-Market Interest Rates
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the
month of August 1996. See Rev. Rul. 96–37,
page 4.
7

Part III. Administrative, Procedural, and Miscellaneous
Determination of Whether Income
of a Controlled Foreign Corporation
Earned Through a Partnership Is
Subpart F Income
Notice 96–39
This Notice sets forth the Service’s
position on the Eighth Circuit’s recent
decision inBrown Group, Inc. v. Com-
missioner, 77 F.3d 217 (8th Cir. 1996),
vacating and remanding104 T.C. 105
(1995). This Notice also announces that
the Service intends to issue regulations
under Subpart F of the Internal Revenue
Code describing how the aggregate ap-
proach to partnerships applies to deter-
mine the treatment of a controlled for-
eign corporation’s (‘‘CFC’s’’) distribu-
tive share of partnership income for
purposes of subpart F.
BACKGROUND
InBrown Group, a CFC incorporated
in the Cayman Islands was a partner in
a Cayman Islands partnership. The part-
nership was not a sham. It acted as a
purchasing agent for the CFC’s U.S.
parent with respect to footwear manu-
factured in Brazil and received commis-
sion income from the U.S. parent as
compensation for its efforts. The foot-
wear imported by the U.S. parent was
sold primarily in the United States. For
its fiscal year ended November 1, 1986,
the U.S. parent did not include as
subpart F income the CFC’s distributive
share of the partnership’s commission
income.
At issue inBrown Groupwas whether
the CFC partner’s distributive share of
the income of the Cayman Islands part-
nership was foreign base company sales
income. If so, this income would be
currently includible in the gross income
of the CFC’s U.S. shareholder as sub-
part F income.Seesections 951(a)(1)
and (b), 952(a), 954(d) and 957(a) of
the Internal Revenue Code. Foreign base
company sales income is defined under
section 954(d) to include commission
income from the purchase of personal
property on behalf of a related person
where the property that is purchased is
both manufactured and sold for use
outside the CFC’s country of incorpora-
tion.
InBrown Group, the parties agreed
that the commission income was earned
from purchasing personal property that
was both manufactured and sold for use
outside the CFC’s country of incorpora-
tion. The narrow issue in dispute was
whether the footwear was purchased on
behalf of a related person, as defined in
section 954(d)(3) of the Code. It was
undisputed that the U.S. parent, on
whose behalf the purchases were made,
was a related person with respect to the
CFC. The Service argued that an aggre-
gate theory of partnerships should apply,
under which the CFC’s distributive
share of the partnership’s commission
income would be tested at the CFC
level to determine whether it was for-
eign base company sales income. Ac-
cordingly, the related person determina-
tion would be made at the partner level,
as if the purchases had been made
directly by the CFC. The taxpayer ar-
gued that an entity theory of partner-
ships should apply, under which the
CFC’s distributive share of partnership
income would be tested at the partner-
ship level. The taxpayer maintained that,
at the partnership level, the purchases
were not made on behalf of a related
person.
The Tax Court, after withdrawing an
earlier opinion favorable to the taxpayer,
held in a reviewed opinion that the CFC
partner’s distributive share of the part-
nership’s commission income was for-
eign base company sales income. The
Tax Court reached its conclusion based
upon an analysis of the provisions and
purposes of subpart F and subchapter K,
as well as the case law discussing the
application of the entity and aggregate
theories of partnership taxation. The Tax
Court’s holding is consistent with the
Service’s published position in Rev. Rul.
89– 72, 1989–1 C.B. 257.
On appeal by the taxpayer, the Eighth
Circuit vacated and remanded the deci-
sion of the Tax Court. The court con-
cluded, based upon its application of the
definition of related person in section
954(d)(3) of the Code, that the commis-
sion income was not foreign base com-
pany sales income at the partnership
level and that the CFC partner’s dis-
tributive share of this partnership in-
come therefore was not subpart F in-
come.
THE SERVICE’S POSITION
The Service disagrees with the opin-
ion of the Eighth Circuit inBrown
Group. To permit a CFC to avoid sub-
part F by earning income through a
partnership under circumstances in
which the income would be subpart F
income if earned directly by the CFC
would be contrary to the purposes of
subpart F.SeeS. Rep. No. 1881, 87th
Cong., 2d Sess. 78–79 (1962).
The legislative history of subchapter
K indicates that, although a partnership
is to be considered an entity in the
treatment of transactions between a part-
ner and a partnership, it need not be
considered a separate entity for purposes
of applying other provisions of the Code
‘‘if the concept of the partnership as a
collection of individuals is more appro-
priate for such provisions.’’ H.R. Conf.
Rep. No. 2543, 83d Cong. 2d. Sess. 59
(1954). The courts have recognized that
the aggregate approach may be applied
in appropriate circumstances.See Casel
v. Commissioner, 79 T.C. 424, 433
(1982);Unger v. Commissioner, T.C.
Memo. 1990–15,aff’d936 F.2d 1316
(D.C. Cir. 1991). Section 1.701–2(e) and
(f) of the Income Tax Regulations con-
firmed the Commissioner’s authority to
treat a partnership as an aggregate of its
partners in whole or in part as appropri-
ate to carry out the purposes of any
provision of the Code or regulations
thereunder.
The Service intends to issue regula-
tions under subpart F to confirm its
position that whether a CFC partner’s
distributive share of partnership income
is subpart F income generally is deter-
mined at the CFC partner level. Prior to
the effective date of those regulations,
the Service will rely on principles and
authorities under subpart F and
subchapter K to apply the aggregate
approach, including section 1.701–2(e)
and (f) of the regulations for periods for
which it is effective.
The principal author of this notice is
Valerie Mark of the Office of the Asso-
ciate Chief Counsel (International). For
further information regarding this notice,
contact Ms. Mark at (202) 622–3840
(not a toll-free call).
26 CFR 601.201: Rulings and determination let-
ters. (Also Part I, § 501; 1.501(a)–1.)
Rev. Proc. 96–40
SECTION 1. PURPOSE
The purpose of this revenue proce-
dure is to modify Rev. Proc. 80–27,
1980–1 C. B. 677, by identifying the
one central location where all filers of
reports required of group parents to
maintain group exemptions should send
the required annual reports.
8

SEC. 2. BACKGROUND
Rev. Proc. 80–27, provides, in § 6.02,
for nine separate locations to which
group parents should send the annual
information required to maintain a group
exemption letter. These designations
were generally based upon the locations
of the service centers closest to the
filers. The Service has now centralized
the filing of the required information in
the Internal Revenue Service Center,
Ogden, Utah.
SEC. 3. CHANGES
.01 Rev. Proc. 80–27 is modified by
deleting the text of § 6.02 in its entirety
and substituting the following:
Filers of the information listed in
§ 6.01 should send the report to:
Ogden Service Center
Mail Stop 6271
1000 South 1200 West
Ogden, UT 84404–4749
SEC. 4. EFFECTIVE DATE
This revenue procedure is effective
for all group exemption filings submit-
ted on or after July 1, 1996, to comply
with the requirements of § 6 of Rev.
Proc. 80–27.
SEC. 5. EFFECT ON OTHER
REVENUE PROCEDURES
Rev. Proc. 80–27 is modified.
SEC. 6. DRAFTING INFORMATION
The principal author of this revenue
procedure is E. D. Luft of the Exempt
Organizations Division. For further in-
formation regarding this revenue proce-
dure, contact Mr. Luft on (202) 622–
6488 (not a toll-free number).
26 CFR 601.202: Closing agreements.
(Also Part I, §§ 103, 148, 7121.)
Rev. Proc. 96–41
SECTION 1. PURPOSE
This revenue procedure applies to an
issuer of state or local bonds that has
used the proceeds of state or local bonds
sold prior to July 19, 1996, to pay more
than fair market value for nonpurpose
investments deposited into an advance
refunding escrow. It provides a program
under which an issuer may request a
closing agreement pursuant to which the
purchase of those investments alone will
not be sufficient to cause §§ 103(b)(2)
and 148 of the Internal Revenue Code
to apply to those bonds.
SECTION 2. BACKGROUND
.01 Section 103(a) provides, in gen-
eral, that gross income does not include
interest on any state or local bond.
Section 103(b)(2) provides, however,
that this exclusion from gross income
does not apply to arbitrage bonds.
.02 Section 148(a)(1) provides, in
general, that bonds of an issue are
arbitrage bonds if any portion of the
proceeds of the issue is ‘‘reasonably
expected’’ on the issue date of the issue
to be used directly or indirectly to
acquire higher yielding investments.
.03 Section 1.148–1(b) of the Income
Tax Regulations provides that an issu-
er’s expectations or actions are reason-
able only if a prudent person in the
same circumstances as the issuer would
have those same expectations or take
those same actions, based on all the
objective facts and circumstances. Sec-
tion 1.148–1(b) also provides that fac-
tors relevant to a determination of rea-
sonableness include the level of inquiry
by the issuer into factual matters.
.04 Section 148(f) provides, in gen-
eral, that bonds of an issue are arbitrage
bonds unless the earnings from the
investment of bond proceeds in excess
of the yield on the issue are rebated to
the United States. The rebate require-
ment of § 148(f) is generally not based
on reasonable expectations.
.05 Section 1.148–6(c) provides that
gross proceeds of an issue of bonds are
not allocated to a payment for a
nonpurpose investment in an amount
greater than the fair market value of that
investment on the purchase date. For
this purpose only, the fair market value
of a nonpurpose investment is adjusted
to take into account qualified adminis-
trative costs allocable to that investment.
.06 Section 1.148–5(d)(6)(i) generally
defines fair market value as the price at
which a willing buyer would purchase
from a willing seller in a bona fide,
arm’s-length transaction. Fair market
value generally is determined on the
date on which a contract to purchase the
nonpurpose investment becomes binding
(that is, the trade date rather than the
settlement date).
.07 Section 1.148–5(d)(6)(iii) provides
that the purchase price of a guaranteed
investment contract is treated as its fair
market value on the purchase date if the
issuer makes a bona fide solicitation for
a guaranteed investment contract that
meets the requirements of that section.
The definition of guaranteed investment
contract in § 1.148–1(b) generally does
not include the purchase of investments
for an escrow for an advance refunding
transaction.
.08 Section 1.148–2(d)(2)(ii) defines
‘‘materially higher yield’’ for invest-
ments in an advance refunding escrow
as 0.001 percent higher than the yield
on the issue.
.09 An issuer cannot avoid the appli-
cation of § 148 by giving away the
prohibited arbitrage profit.See2 H.R.
Conf. Rep. No. 841, 99th Cong., 2d
Sess. II–746 (1986), 1986–3 (Vol. 4)
C.B. 746. The deflection of arbitrage
through the purchase of investments at
other than fair market value is prohib-
ited. H.R. Rep. No. 426, 99th Cong., 1st
Sess. 556 (1985), 1986–3 (Vol. 2) C.B.
556.
.10 Issuers of advance refunding
bonds commonly enter into an agree-
ment to purchase United States Treasury
securities that are to be deposited into
an escrow to pay the refunded prior
issue of bonds. In most cases, an issuer
enters into this investment purchase
agreement on the same date it enters
into an agreement to sell its advance
refunding bonds. That date (the ‘‘sale
date’’) is often several weeks before the
issue date of the issue of bonds.
.11 In a typical tax-exempt advance
refunding transaction, the obligation to
purchase the Treasury securities is con-
tingent on the issuance and sale of the
advance refunding bonds, which in turn
are commonly subject to contingencies
that are standard in the municipal bond
industry (such as the ability of bond
counsel to render an unqualified opinion
on the validity of the bonds).
.12 In general, a valuation method
must take into account all pertinent
information. A valuation method that
singles out one economic factor and
disregards other significant economic
factors is erroneous.See, e.g., Powers v.
Commissioner, 312 U.S. 259, 260
(1941), 1941–1 C.B. 448;Guggenheim
v. Rasquin, 312 U.S. 254 (1941),
1941–1 C.B. 445;Commissioner v. Mc-
Cann, 146 F.2d 385 (2d Cir. 1944).
.13 Certain state and local govern-
ment issuers, and certain sellers of Trea-
sury securities to state and local govern-
ment issuers, of advance refunding
bonds have used a valuation method that
results in prices for those Treasury secu-
rities that exceed the fair market value
of the securities. It has been asserted
that the risk of nonsettlement justifies
the inclusion of the cost of a hedge
(such as a put option on Treasury secu-
rities) in the fair market value of the
9

Treasury securities to protect the seller
against any increase in interest rates
between the sale date (trade date) and
the issue date (settlement date).
.14 In these transactions, a substantial
mark-up of the price of Treasury securi-
ties for the risk of nonsettlement is
inappropriate for two reasons. First, the
risk of nonsettlement is remote. In addi-
tion, the seller of the Treasury securities
is in a position to benefit if interest rates
fall. This potential for benefit should
reduce the weight given to the potential
for loss if rates should rise. In general,
nonsettlement is not more likely when
interest rates rise than when they fall.
.15 In other cases, issuers have en-
tered into agreements to purchase open
market Treasury securities to be depos-
ited into an escrow to pay the refunded
prior issue of bonds. On the same date,
issuers have subscribed to purchase
United States Treasury securities—State
and Local Government Series (‘‘SLGS’’)
from the United States Department of
the Treasury, Bureau of Public Debt to
pay the same refunded prior issue of
bonds. In effect, this arrangement pro-
vides a call option on the open market
Treasury securities to the seller of those
securities.
.16 In the case of simultaneous SLGS
subscription and forward purchase con-
tracts, the issuer and the seller of the
open market Treasury securities agree
on the sale date that, if the advance
refunding bonds are issued and if inter-
est rates decline between the sale date
and the issue date of the advance re-
funding bonds so that the value of the
nonpurpose investments increases, the
issuer will purchase the SLGS. In this
case, the seller will not be obligated to
deliver the open market Treasury securi-
ties to the issuer. Alternatively, if the
advance refunding bonds are issued and
if interest rates remain the same or
increase between the sale date and the
issue date so that the value of the
nonpurpose investments remains the
same or decreases, the issuer will be
obligated to purchase the open market
Treasury securities. In this case, the
seller will be obligated to deliver the
open market Treasury securities to the
issuer for deposit into the advance re-
funding escrow. In addition, the issuer
will not purchase the SLGS. In such a
case, by subscribing for the SLGS, the
issuer in effect provides a call option on
the open market Treasury securities to
the seller of the open market Treasury
securities. For purposes of the arbitrage
rules, the fair market value of the open
market Treasury securities under the
agreement with the seller must accord-
ingly be reduced by the value of this
call option.
.17 Even if the issuer obtains certifi-
cations that the purchase price being
paid for nonpurpose investments does
not exceed the fair market value of
those investments, an issue may never-
theless fail to meet the reasonable ex-
pectations standard of § 148(a). Further,
in general, an agreement between unre-
lated persons about price does not pre-
sumptively establish fair market value in
a situation where one party to the
agreement lacks financial incentive to
obtain the best price.See Raymond v.
Commissioner, 114 F.2d 140 (7th Cir.),
cert. denied, 311 U.S. 710 (1940).
.18 All the facts and circumstances
are considered in the determination of
whether the proceeds of the issue are to
be invested at a materially higher yield.
Factors strongly tending to establish that
an issuer does not reasonably expect the
proceeds of the issue to be invested at a
materially higher yield are (1) the use of
a bona fide bidding procedure to reason-
ably probe the market for the fair mar-
ket value of nonpurpose investments and
(2) reasonable due diligence by the
issuer to review the method used to
determine the fair market value of Trea-
sury securities. One important factor
tending to establish that a bidding pro-
cedure is bona fide is that it is con-
ducted by a person that does not have a
material financial interest in the transac-
tion (for example, as the seller of Trea-
sury securities to the issuer).
.19 Some issuers have obtained Trea-
sury securities for an advance refunding
escrow by using procedures that gener-
ally are designed to conform to the safe
harbor for guaranteed investments con-
tracts in § 1.148–5(d)(6)(iii). Although
that safe harbor does not expressly ap-
ply to the purchase of Treasury securi-
ties for an advance refunding escrow,
the Internal Revenue Service will apply
the principles underlying that safe har-
bor to the purchase of those nonpurpose
investments. Absent extraordinary cir-
cumstances, a bona fide bidding proce-
dure consistent with the principles of the
safe harbor for guaranteed investments
contracts is rebuttably presumed to es-
tablish fair market value for transactions
to which this revenue procedure is ap-
plicable, even in cases where the for-
ward price paid for Treasury securities
is greater than the spot price of those
Treasury securities. Other procedures
may also establish fair market value.
.20 If promulgated as a final regula-
tion, § 1.148–5(d)(6)(v) of the proposed
Income Tax Regulations, published in
the Federal Register on June 27, 1996
(61 Fed. Reg. 33405), would provide a
rebuttable presumption for establishing
fair market value for Treasury securities
purchased other than directly from the
United States Treasury for those transac-
tions described in the regulation.
SECTION 3. DESCRIPTION OF THE
CLOSING AGREEMENT PROGRAM
FOR ADVANCE REFUNDING
ESCROWS
.01 Under the program established by
this revenue procedure, the Service will
enter into closing agreements with the
issuers of bonds. These closing agree-
ments will resolve the effect of the
payment of more than fair market value
for the nonpurpose investments for yield
restriction and rebate purposes under
§ 148. The closing agreements will not
resolve any other matters.
.02 The closing agreements will pro-
vide that, for purposes of § 148, the
amount paid by the issuer for the Trea-
sury securities deposited into an advance
refunding escrow will be treated as the
fair market value for those nonpurpose
investments. For purposes of computing
rebate under § 148(f), the closing agree-
ment amount will not be treated as a
rebate payment.
.03 This program is a compliance
program but is not based upon an
examination of an issue of bonds by the
Service.
.04 Because this program does not
arise out of an examination, consider-
ation under this program does not pre-
clude or impede an examination of the
issuer, the bondholders, or the issue of
bonds by the Service with respect to
matters not addressed in the closing
agreement.
.05 The intent underlying this pro-
gram is to treat expeditiously all re-
quests for closing agreements which are
submitted in accordance with sections 5
and 6 of this revenue procedure. Ac-
cordingly, negotiations with the issuers
on the basis of mitigating circumstances
of individual cases will not be enter-
tained under the terms of this revenue
procedure.
SECTION 4. SCOPE
.01 This revenue procedure applies to
any issue of advance refunding bonds
which was sold prior to July 19, 1996,
and issued prior to August 19, 1996, and
the proceeds of which were used to
10

purchase nonpurpose investments pursu-
ant to an agreement that is substantially
similar to an agreement to purchase
described in sections 2.13 or 2.15 of this
revenue procedure.
.02 An issue of bonds that is under an
examination by the Service is not eli-
gible for the program. An issue of bonds
is under examination if the issuer of the
bonds has been contacted in any manner
by the Service for the purpose of sched-
uling any type of examination of that
issue of bonds. For issuers that do not
avail themselves of a closing agreement
under this revenue procedure, the Ser-
vice will treat the purchase of
nonpurpose investments with the pro-
ceeds of an issue of bonds as being
subject to the usual procedures govern-
ing tax consequences. The result upon
any examination by the Service of the
issue of bonds could be different from
the terms of this revenue procedure,
depending on the merits of the issuer’s
position.
.03 For purposes of this revenue pro-
cedure, ‘‘issuer’’ means only the entity
that actually issues the bonds and not a
conduit borrower of the issue.
SECTION 5. PROCEDURE
.01 The issuer seeking relief must
request a closing agreement within 1
year from July 19, 1996, following the
procedures in this revenue procedure.
.02 The issuer must request a closing
agreement using Form 10001, which is
shown as an exhibit at the end of this
revenue procedure.
.03 The closing agreement will be
prepared by the Service and, in general,
will be in substantially the same form as
the model closing agreement set forth in
Announcement 95–61, Exhibit (7)(10)-
(15)0–6, 1995–32 I.R.B. 54, 74, or any
successor of Announcement 95–61.
.04 As a condition to executing a
closing agreement under this procedure,
the issuer must agree to pay, simulta-
neously with the execution by the issuer
of the closing agreement, the closing
agreement amount computed under sec-
tion 6 of this revenue procedure.
.05 The Service will not challenge
whether an issuer paid more than fair
market value for Treasury securities that
are purchased other than directly from
the United States Treasury and deposited
into an advance refunding escrow in a
transaction described in section 2.13 of
this revenue procedure if:
(1) The amount paid for the Trea-
sury securities does not exceed the spot
price as described in section 6.02 of this
revenue procedure;
(2) The period between the sale
date and the issue date of the issue of
bonds was not greater than 1 month;
and
(3) The Treasury securities are pur-
chased prior to July 19, 1996.
SECTION 6. CLOSING AGREEMENT
AMOUNT
.01 The closing agreement amount is
equal to:
(1) The excess of the amount paid
by the issuer for the nonpurpose invest-
ments deposited in the advance refund-
ing escrow over the spot price (as
described in section 6.02 of this revenue
procedure) of those nonpurpose invest-
ments (this excess is referred to as the
‘‘differential amount’’); plus
(2) Interest on the differential
amount from the issue date of the bonds
to the date of payment at an interest rate
equal to the yield on the issue of bonds.
.02 The spot price is the noncontin-
gent price on the trade date of a
nonpurpose investment for delivery on
the next business day after the trade
date.
.03 In the case of an agreement to
purchase Treasury securities described in
section 2.15 of this revenue procedure,
the differential amount must include the
value of a call option on an equivalent
portfolio of Treasury securities for the
period from the sale date to the issue
date of the advance refunding bonds at a
strike price for the portfolio equal to the
price established in the agreement.
.04 Use of the spot price as the basis
for the settlement amount under this
revenue procedure is for the administra-
tive convenience of state and local gov-
ernment issuers and the Service and
does not reflect a view by the Service
that the spot price closely reflects the
fair market value in all cases of a
contingent forward price for the portfo-
lio. For example, in many cases, use of
the noncontingent forward price for
Treasury securities may be a more accu-
rate basis for determining the fair mar-
ket value of the contingent forward
price.
.05 Use of the spot price of the
nonpurpose investments is not permitted
if the period between the sale date and
the issue date of the issue of bonds was
greater than 1 month.
SECTION 7. INQUIRIES
Inquiries in regard to this revenue
procedure should be directed to:
Internal Revenue Service
CP:E:EO:T:4 Room 6236
1111 Constitution Ave. NW
Washington, D.C. 20224
SECTION 8. EFFECTIVE DATE
This revenue procedure is effective
July 19, 1996, and applies to state or
local bonds described in section 4.01 of
this revenue procedure.
DRAFTING INFORMATION
The principal author of this revenue
procedure is Loretta J. Finger of the
Office of Assistant Chief Counsel (Fi-
nancial Institutions and Products). For
further information regarding this rev-
enue procedure contact Loretta J. Finger
on (202) 622–3980 (not a toll-free call).
11

CAMERA COPY HERE
12

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13

26 CFR 601.602: Forms and instructions.
(Also Part I, Sections 408, 6041, 6041A, 6042,
6043, 6044, 6045, 6047, 6049, 6050A, 6050B,
6050D, 6050E, 6050H, 6050J, 6050N, 6050P;
1.408–5, 1.408–7, 1.6041–1, 7.6041–1, 1.6042–2,
1.6042–4, 1.6044–2, 1.6044–5, 1.6045–1,
5f.6045–1, 1.6045–2, 1.6045–4, 1.6047–1,
1.6049–4, 1.6049–6, 1.6049–7, 1.6050A–1,
1.6050B–1, 1.6050D–1, 1.6050E–1, 1.6050H–1,
1.6050H–2, 1.6050J–1T, 1.6050N–1, 1.6050P–1)
Rev. Proc. 96–42
CONTENTS
PART A. GENERAL
SECTION 1. PURPOSE
SECTION 2. NATURE OF
CHANGES
SECTION 3. REQUIREMENTS
FOR ACCEPTABLE SUBSTI-
TUTE FORMS 1096, 1098, 1099,
5498, AND W–2G
SECTION 4. DEFINITIONS
SECTION 5. INSTRUCTIONS FOR
PREPARING PAPER FORMS
THAT WILL BE FILED WITH
THE IRS (COPY A)
SECTION 6. MAGNETIC MEDIA
AND ELECTRONIC FILING
SECTION 7. SUBSTITUTE STATE-
MENTS TO RECIPIENTS AND
FORM RECIPIENT COPIES
PART B. SPECIFICATIONS FOR
SUBSTITUTE FORMS TO BE FILED
WITH IRS (EXCEPT W–2G)
SECTION 1. GENERAL
SECTION 2. SPECIFICATIONS
FOR FORM 1096 AND COPY A
OF FORM 1098, 1099, AND 5498
PART C. SPECIFICATIONS FOR
SUBSTITUTE FORMS W–2G TO BE
FILED WITH IRS
SECTION 1. GENERAL
SECTION 2. SPECIFICATIONS
FOR COPY A FOR FORMS
W–2G
PART D. ADDITIONAL
INSTRUCTIONS FOR FORMS 1098,
1099, 5498, AND W–2G
SECTION 1. OTHER COPIES
SECTION 2. OMB REQUIRE-
MENTS
SECTION 3. REPRODUCTION
PROOFS
SECTION 4. EFFECT ON OTHER
REVENUE PROCEDURES
PART E. EXHIBITS
EXHIBIT A. FORM 1098
EXHIBIT B. FORM 1099–A
EXHIBIT C. FORM 1099–B
EXHIBIT D. FORM 1099–C
EXHIBIT E. FORM 1099–DIV
EXHIBIT F. FORM 1099–G
EXHIBIT G. FORM 1099–INT
EXHIBIT H. FORM 1099–MISC
EXHIBIT I. FORM 1099–OID
EXHIBIT J. FORM 1099–PATR
EXHIBIT K. FORM 1099–R
EXHIBIT L. FORM 1099–S
EXHIBIT M. FORM W–2G
EXHIBIT N. FORM 5498
EXHIBIT O. FORM 1096
PART A. GENERAL
SECTION 1. PURPOSE
.01 The purpose of this revenue pro-
cedure is to set forth the requirements
for:
1. Using official Internal Revenue
Service (IRS) forms to file information
returns with IRS,
2. Preparing acceptable substitutes of
the official IRS forms to file informa-
tion returns, and
3. Using such official or acceptable
substitute forms to furnish information
to a recipient.
This revenue procedure contains specifi-
cations for the following information
returns:
(a) Form 1098 Mortgage Interest
Statement;
(b) Form 1099–A Acquisition or
Abandonment of Secured Property;
(c) Form 1099–B Proceeds From
Broker and Barter Exchange Trans-
actions;
(d) Form 1099–C Cancellation of
Debt;
(e) Form 1099–DIV Dividends and
Distributions;
(f) Form 1099–G Certain Govern-
ment Payments;
(g) Form 1099–INT Interest Income;
(h) Form 1099–MISC Miscellaneous
Income;
(i) Form 1099–OID Original Issue
Discount;
(j) Form 1099–PATR Taxable Distri-
butions Received From Coopera-
tives;
(k) Form 1099–R Distributions From
Pensions, Annuities, Retirement or
Profit-Sharing Plans, IRAs, Insur-
ance Contracts, etc.;
(l) Form 1099–S Proceeds From Real
Estate Transactions;
(m) Form W–2G Certain Gambling
Winnings;
(n) Form 5498 Individual Retirement
Arrangement Information; and
(o) Form 1096 Annual Summary and
Transmittal of U.S. Information Re-
turns.
.02 For the purpose of this revenue
procedure, a substitute form or statement
is one that is not printed by the IRS. For
a substitute form or statement to be
acceptable to the IRS, it must conform
to the official form or the specifications
outlined in this revenue procedure. DO
NOT SUBMIT ANY SUBSTITUTE
FORMS OR STATEMENTS TO IRS
FOR APPROVAL. Private printers can-
not state ‘‘This is an IRS approved
form.’’ Further, only those forms that
conform to the official form or comply
with the specifications set forth herein
are acceptable. See Part A, Section 7,
for the specifications that apply to form
recipient statements (generally Copy B).
.03 Filers who make payments to
certain persons (payees) (or in some
cases receive payments) during a calen-
dar year are required by the Internal
Revenue Code (IRC) to file information
returns with the IRS reflecting these
payments. Further, as discussed below,
these filers must provide this informa-
tion to their payees.
.04 In general, the manner in which a
filer must file an information return is
governed by section 6011 of the IRC. A
filer must file information returns on
magnetic media or on paper. Under
section 6011 of the IRC, a filer who is
required to file 250 or more information
returns (of any one type) during a
calendar year must file those returns on
magnetic media. Filers required to file
less than 250 returns during a calendar
year may, but are not required to, file
such information returns on magnetic
media (small volume filers). The IRS
explains these legal requirements for
filing information returns (and providing
a copy to a payee) in the annual publi-
cation of Instructions for Forms 1099,
1098, 5498, and W–2G.
.05 Copies of the official forms for
the reporting year and the instruction
booklet may be obtained by calling our
toll-free number1–800–TAX–FORM
(1–800–829–3676).
.06 The IRS prints and provides the
forms on which various payments must
be reported. Alternatively, filers may
prepare substitute copies of these IRS
forms and use such forms to report
payments to the IRS.
.07 IRS operates a centralized call
site, located at the Martinsburg Comput-
14

ing Center (MCC), to answer questions
related to information returns, penalties,
and backup withholding. The call site
phone number is304–263–8700. The
number for Telecommunications Device
for the Deaf (TDD) is304–267–3367.
These are not toll-free numbers.
.08 IRS has established a personal
computer based Information Reporting
Bulletin Board System (IRP–BBS) at
MCC. This system provides information
about forms and publications, including
this revenue procedure, news of the
latest changes, answers to questions,
access to shareware, and other features.
The IRP–BBS is available for public use
and can be reached by dialing304–264–
7070. The IRP–BBS is compatible with
most modems. For more information
concerning this system, call MCC at
304–263–8700 (not a toll-free number)
Monday through Friday 8:30 A. M. to
4:30 P. M. eastern time.
SEC. 2. NATURE OF CHANGES
.01 The text and exhibits were up-
dated for tax year 1996.
.02 The phone number for the Infor-
mation Reporting Bulletin Board System
(IRP–BBS) has been changed. See Part
A, Sec. 1.08.
.03 On Form 5498, new box 5 (check
box for simplified employee pension
(SEP)) was added. See Exhibit N.
.04 A statement regarding the accep-
tance of handwritten forms has been
added to Part A, Section 5.04.
.05 A note requesting that a phone
number be included on statements to
recipients has been added to Part A,
Sections 7.01(7) and 7.02(2).
.06 A note referring to the correct
form measurements has been added to
Part B, Sec. 2.01.
.07 The note regarding new verbiage
for paper and ink specifications for
substitute forms has been deleted from
Part B, Sec. 2.02. The current specifica-
tions are applicable to our new OCR
equipment. Therefore, it is not necessary
to change the current specifications.
.08 New procedures for obtaining Re-
producible copies were added to Part D,
Sec. 3.
SEC. 3 REQUIREMENTS FOR
ACCEPTABLE SUBSTITUTE FORMS
1096, 1098, 1099, 5498, and
W–2G
.01 Paper substitutes for Form 1096
and Copy A of Forms 1098, 1099, 5498,
and W–2G that totally conform to the
specifications contained in this revenue
procedure may be privately printed and
filed as returns with the IRS. The refer-
ence to the Department of the Treasury -
Internal Revenue Service should be in-
cluded on all such forms. The Catalog
Number (Cat. No.) shown on the 1996
Forms 1096, 1098, 1099, 5498, and
W–2G is used for IRS distribution pur-
poses and need not be printed on any
substitute forms.
If you are uncertain of any specifica-
tion set forth herein and want that
specification clarified, you may submit a
letter citing the specification in question,
giving your understanding and interpre-
tation of the specification, and enclosing
an example of the form (if appropriate)
to:
Internal Revenue Service
ATTN: T:S:P:S - SAL (IRP Coordina-
tor)
1111 Constitution Avenue, N.W.
Washington, DC 20224
NOTE:Allow at least 45 days for the
IRS to respond.
.02 Copy B (Form 1098 - For Payer,
Form 1099–A - For Borrower, Form
1099–C - For Debtor, Form 1099–S -
For Transferor, Other Forms 1099 - For
Recipient, Form 5498 - For Participant,
and Forms W–2G and 1099–R - To Be
Attached To the Federal Tax Return),
and Copy C- (Form 1099–R For Recipi-
ent’s Records and Form W–2G For
Winner’s Records) must contain the in-
formation specified in PART A Section
7 in order to constitute a ‘‘statement’’ or
‘‘official form’’ under the applicable
provisions of the Internal Revenue
Code. The format of this information is
at the discretion of the filer with the
exception of the location of the tax year,
form number and form name specified
in Part A Section 7.01(6) and composite
Form 1099 statements specified in
PART A Sections 7.02 and 7.04.
.03 Forms 1096, 1098, 1099, 5498,
and W–2G are subject to annual review
and possible change. Therefore, filers
are cautioned against overstocking sup-
plies of privately printed substitutes.
THE SPECIFICATIONS CONTAINED
IN THIS REVENUE PROCEDURE AP-
PLY TO 1996 FORMS ONLY.
.04 Proposed substitutes for Copy A
that do not conform to the specifications
in this revenue procedure are not accept-
able. Further, if you file such forms with
IRS, you may be subject to a penalty for
failure to file an information return
under section 6721 of the Internal Rev-
enue Code (IRC). Generally, the penalty
is $50 for each failure to file a form (up
to $250,000) that the IRS cannot accept
as a return because it does not meet the
provisions in this revenue procedure. No
IRS office is authorized to allow devia-
tions from this revenue procedure.
SEC. 4. DEFINITIONS
.01 The term ‘‘form recipient’’ means
the person to whom you are required by
law to furnish a copy of the official
form or information statement:i.e., for
Form 1098, the recipient is the ‘‘payer/
borrower’’; Form 1099–A, the ‘‘bor-
rower’’; Form 1099–C, the ‘‘debtor’’;
Form 1099–S, the ‘‘transferor’’; other
Forms 1099, the payment recipient;
Form 5498, the ‘‘participant’’; and Form
W–2G, the ‘‘winner.’’
.02 The term ‘‘filer’’ means the per-
son or organization required by law to
file a form listed in PART A Section
1.01 with the IRS. Thus, a filer may be
a payer, a creditor, a recipient of mort-
gage interest payments, a broker, a bar-
ter exchange, a person reporting real
estate transactions, a trustee or issuer of
an individual retirement arrangement
(including an IRA or SEP), or a lender
who acquires an interest in secured
property or who has reason to know that
the property has been abandoned.
.03 A corrected (or amended) return
is one that corrects information previ-
ously reported to IRS. (A voided return
will not correct previously reported in-
formation.)
.04 The term ‘‘substitute form’’
means a paper substitute of Copy A of
an official form listed in PART A Sec-
tion 1.01 that totally conforms to the
provisions in this revenue procedure.
.05 The term ‘‘substitute form recipi-
ent statement’’ means a paper statement
of the information reported on a form
listed in PART A Section 1.01 that must
be furnished to a person (form recipi-
ent), as so defined under the applicable
provisions of the Internal Revenue Code
and the applicable regulations.
.06 A composite substitute statement
is one in which two or more required
statements (e.g., Forms 1099–INT and
1099–DIV) are furnished to the recipient
on one document. However, each state-
ment must be separately designated and
must contain all the requisite Form 1099
information except as provided in Part A
Section 7. A composite statement CAN-
NOT be filed with the IRS. See PART A
Section 7.02 and 7.04 for more informa-
tion on composite statements.
15

SEC. 5. INSTRUCTIONS FOR
PREPARING PAPER FORMS THAT
WILL BE FILED WITH THE IRS (Copy
A)
.01 The form recipient’s name, street
address, city, state, and ZIP code infor-
mation should be TYPED OR MA-
CHINE PRINTED IN BLACK INK on
separate lines. Carbon copies and photo-
copies are not acceptable. The city,
state, and ZIP code must be on the same
line.
.02 The name of the appropriate form
recipient must be shown on the first or
second name line in the area on the
form provided for the form recipient’s
name and address. No descriptive infor-
mation or other name may precede the
form recipient’s name. Only ONE form
recipient’s name may appear on the first
name line of the form. If the names of
multiple recipients must be set forth on
the form, on the first name line insert
the recipient name that corresponds to
the taxpayer identification number (TIN)
used for information reporting purposes.
Place the other form recipients’ names,
on the succeeding name line (up to 2
name lines are allowable). Because cer-
tain states require that trust accounts be
provided in a different format,generally
filers should provide information returns
reflecting payments to trust accounts
with (1) the trust’s employer identifica-
tion number (EIN) in the recipient’s TIN
area, (2) the trust’s name on the recipi-
ent’s first name line, and (3) the name
of the trustee on the recipient’s second
name line.
.03 You should use theaccount
numberbox for an account number
designation. This number must not ap-
pear anywhere else on the form, and this
box may not be used for any other item.
Showing the account number is optional.
However, it may be to your benefit to
include the recipient’s account number
or designation on paper documents if
your system of records uses the account
number or designation in conjunction
with, or rather than, the name, social
security number, or employer identifica-
tion number for identification purposes.
If you furnish the account number, the
IRS will include it in future notices to
you about backup withholding. If you
use window envelopes and reduced rate
mail to mail statements to recipients, be
sure the account number does not ap-
pear in the window. Otherwise the
Postal Service may not accept them for
mailing.
.04 Although forms completed in
handwriting will be accepted, in order
for IRS to process the submitted forms
in the most economical manner, the IRS
prefers that filers TYPE OR MACHINE
PRINT data entries. In addition, filers
should insert data in themiddle of
blockswell separated from other print-
ing and guidelines, and take other mea-
sures to guarantee a clear, dark black,
sharp image.
.05 Machine printed forms should be
printed using a 6 lines/inch option.
.06 Machine printed forms should be
printed in 10 pitch pica (i.e., 10 print
positions per inch) or 12 pitch elite (i.e.,
12 print positions per inch). Proportional
spaced fonts are unacceptable.
.07 To correct returns, enter an ‘‘X’’
within the checkbox located at the top
of the form making the correction, to
the left of the word ‘‘CORRECTED.’’
DO NOT type the words CORRECTED
RETURN on the Form 1096, 1098,
1099, 5498, or W–2G. See ‘‘Corrected
Returns’’ in the 1996 ‘‘Instructions for
Forms 1099, 1098, 5498, and W–2G.’’
.08 If you make an error while typing
or printing a Form 1098, 1099, or 5498,
enter an ‘‘X’’ in the ‘‘VOID’’ box at the
top of the form. An entry in the
‘‘VOID’’ box will not correct previously
filed information returns. See ‘‘Void
Returns’’ in the 1996 ‘‘Instructions for
Forms 1099, 1098, 5498, and W–2G.’’
.09 DO NOT use a felt tip marker.
The machine used to ‘‘read’’ paper
forms generally cannot ‘‘read’’ this ink
type.
.10 Substitute forms prepared in con-
tinuous or strip form must be burst and
stripped to conform to the size specified
for a single sheet before they are filed
with IRS. The size specifieddoes not
include pinfeed holes. Pinfeed holes
MUST NOT be present on forms filed
with the IRS.
.11 Use decimal points to indicate
dollars and cents.DO NOTuse dollar
signs ($), ampersands (&), asterisks (*),
commas (,), or other special characters
in the numbered money boxes. Example:
2000.00 is acceptable.
.12 DO NOT FOLD Forms 1096,
1098, 1099, or 5498 being mailed to
IRS. Mail these forms flat in an appro-
priately sized envelope or box. Folded
documents cannot be readily moved
through the scanner transport used in
IRS processing.
.13DO NOT STAPLEForms 1096
to the returns being transmitted. Staple
holes in the vicinity of the return code
number reduce the IRS’s ability to ma-
chine scan the type of documents.
.14DO NOTtype other information
on Copy A.DO NOTcut or separate
the individual forms on the sheet of
forms of Copy A (except Forms W–2G).
.15 MAIL completed paper forms to
the IRS service center specified on the
back of Form 1096 and in the 1996
‘‘Instructions for Forms 1099, 1098,
5498, and W–2G.’’ CAUTION: SEE
NEW ‘‘WHERE TO FILE’’ AD-
DRESSES, for tax year 1995. Specific
information needed to complete the
forms in this revenue procedure is given
in those instructions. A chart is included
in those instructions giving a quick
guide to which form must be filed to
report a particular payment.
SEC. 6. MAGNETIC MEDIA AND
ELECTRONIC FILING
.01 All forms listed in Section 1.01
(except Form 1096) may be filed mag-
netically or electronically. The IRS en-
courages all filers including nominees
(hereafter collectively referred to as fil-
ers) to file information returns on mag-
netic media or electronically instead of
on paper forms.
.02 Any person who is required to
file 250 or more (of any one type of
form) information returns for one calen-
dar year MUST file on magnetic media
unless an undue hardship waiver is
requested and received. To request a one
year waiver of the magnetic media filing
requirements, for the current tax year
only, submit Form 8508, Request for
Waiver From Filing Information Returns
on Magnetic Media. See Publication
1220 Part A, Sec. 5, for more informa-
tion. Specifications for filing informa-
tion returns on magnetic media are
contained in Publication 1220, ‘‘Specifi-
cations for Filing Forms 1098, 1099,
5498, and W–2G Magnetically or Elec-
tronically.’’ Copies of this publication
may be obtained by calling1–800–
TAX–FORM (1–800–829–3676). Pay-
ers who do not comply with the mag-
netic media filing requirements and who
are not granted a waiver may be subject
to penalties.Note:Filing electronically
will satisfy the magnetic media filing
requirements. Refer to Publication 1220,
Part C, Bisynchronous (Mainframe)
Electronic Filing Specifications and Part
D, Asynchronous (IRB–BBS) Electronic
Filing Specifications.
16

SEC. 7. SUBSTITUTE STATEMENTS
TO FORM RECIPIENTS AND FORM
RECIPIENT COPIES
If you are not using the official IRS
form to furnish statements to your re-
cipients, your substitute statements must
comply with the rules in this section. In
general, see Regulations sections
1.6042–4, 1.6044–5, 1.6049–6, and
1.6050N–1 on the manner in which
certain statements must be provided to
recipients (statement mailing require-
ments for most Forms 1099–DIV and
1099–INT, all Forms 1099–OID and
1099–PATR, and Form 1099–MISC or
1099–S for royalties).
.01 SUBSTITUTE STATEMENTS
TO RECIPIENTS - Forms 1099–INT
(except for interest reportable under sec-
tion 6041), DIV (except for section
404(k) dividends)), OID, and PATR
ONLY. The requirement to furnish form
recipients with an official Form1099–
INT, DIV, OID, or PATRmay be met
by furnishing Copy B of the official
form or by furnishing a substitute Form
1099 (form recipient statement) if it
contains the same language as that of
the official IRS form (such as aggregate
amounts paid to the form recipient, any
backup withholding, the name, address,
and TIN of the person making the
return, and any other information re-
quired by the official form). Information
not required by the official form should
not be included on the substitute form
except for state tax withholding infor-
mation. You may enter a total of the
individual accounts listed on the form
only if they have been paid by the same
payer. For example, if you are listing
interest paid on several accounts by one
financial institution onForm 1099–
INT, you may also enter the total
interest amount. You may also enter a
date next to the corrected box if that
box is checked.
The form recipient statement,e.g.,
Copy B of a substitute form for1099–
INT, 1099–DIV, 1099–OID, and 1099–
PATR, must comply with the following
requirements.
(1) Box captions and numbers that
are applicable must be clearly iden-
tified, using the same wording and
numbering as on the official form.
However onForm 1099–INT, if
box 3 is not on your substitute
form, you may drop ‘‘not included
in box 3’’ from the box 1 caption.
(2) The form recipient statement must
contain all applicable form recipi-
ent instructions provided on the
front and back of the official IRS
form. Those instructions may be
provided on a separate sheet of
paper.
(3) The form recipient statement must
contain the following statement in
bold and conspicuous type, ‘‘This
is important tax information and is
being furnished to the Internal Rev-
enue Service. If you are required to
file a return, a negligence penalty
or other sanction may be imposed
on you if this income is taxable
and the IRS determines that it has
not been reported.’’
(4) The caption ‘‘Federal income tax
withheld’’ must be in bold face
type on the form recipient state-
ment.
(5) The form recipient statement must
contain the Office of Management
and Budget (OMB) number as
shown on the official IRS form.
See Part D, Section 2.
(6) The form recipient statement must
contain the tax year (e.g., 1996),
form number (e.g., Form 1099–
INT), and form name (e.g., Interest
Income) of the official IRS Form
1099 for which it substitutes promi-
nently displayed together in one
area of the statement. For example,
the tax year, form number, and
form name could be shown in the
upper right part of the statement.
Each copy must be appropriately
labeled (such as Copy B, For Re-
cipient) (see PART D Section 1.02
for applicable labels of forms). DO
NOT include the words ‘‘Substitute
for’’ or ‘‘In lieu of’’ on the form
recipient statement.
(7) Layout and format of the form is
at the discretion of the filer. How-
ever, IRS encourages the use of
statements with boxes so that the
statement has the appearance of a
form and can be easily distin-
guished from other nontax state-
ments.NOTE:Please include your
telephone number on statements to
recipients you provide so that tax-
payers can contact you directly
with questions.
(8) With respect to dividend income,
a mutual fund family may sepa-
rately state on one document (e.g.,
one piece of paper) the dividend
income earned by a recipient from
each fund within the family of
funds as required by Form1099–
DIV. However, each fund and its
earnings must be separately stated.
The form must contain an instruc-
tion to the recipient that each
fund’s dividends and name, not the
name of the mutual fund family,
must be reported on the recipient’s
tax return. The form cannot contain
an aggregate total of all funds.
Moreover, a mutual fund family
may furnish a single statement (as
a single filer) for Form 1099–INT,
DIV, and OID information. Each
fund and its earnings must be sepa-
rately stated. The form must con-
tain an instruction to the recipient
that each fund’s earnings and name,
not the name of the mutual fund
family, is to be reported on the
shareholder’s tax return. The form
cannot contain an aggregate total of
all funds.
.02 COMPOSITE SUBSTITUTE
STATEMENTS -FORMS 1099–INT
(except for interest reportable under
section 6041), DIV (except for section
404(k) dividends)), OID, AND PATR
ONLY.- A composite form recipient
statement is permitted for reportable
payments of interest, dividends, original
issue discount, and/or patronage divi-
dends (Forms 1099–INT, DIV, OID or
PATR) when one payer is reporting
more than one of these payments during
a calendar year to the same form recipi-
ent. Generally, do not include any other
Form 1099 information (e.g., 1098 or
1099–A) on a composite statement with
the information required on the forms
listed in the preceding sentence.Excep-
tion:A filer may include Form1099–B
information on a composite form with
the forms listed above. Although the
composite form recipient statement may
be on one sheet, the format of the
composite form recipient statement must
satisfy the following requirements in
addition to the requirements listed in
Section 7.01 above.
(1) All information pertaining to a
particular type of payment must be
located and blocked together on the
form and must be separate from
any information covering other
types of payments included on the
form. For example, if you are re-
porting interest and dividends, the
Form 1099–INTinformation must
be presented separately from the
Form 1099–DIVinformation.
(2) The tax year, form number, and
form name of the official IRS
forms for which the composite
form recipient statement substitutes
must be prominently displayed to-
gether in one area at the beginning
of each appropriate block of infor-
17

mation.NOTE:Please include
your telephone number on state-
ments to recipients you provide so
that taxpayers can contact you di-
rectly with questions.
(3) Any information required by the
official IRS forms that would other-
wise be repeated in each informa-
tion block is only required to be
listed once in the first information
block on the composite form. For
example, there is no requirement to
report the name of the filer in each
information block. This rule does
not apply to any money amounts,
e.g., Federal income tax withheld,
or to any other information that
applies to money amounts.
(4) A composite statement shall be
considered an acceptable substitute
only if the type of payment and the
recipient’s tax obligation with re-
spect to the payment are no less
clear than if each required state-
ment were furnished separately on
an official form.
.03 SUBSTITUTES STATEMENTS
TO RECIPIENTS - FORMS 1098,
1099–A, 1099–B, 1099–C, 1099–G,
1099–MISC, 1099–R, 1099–S, 5498,
W–2G, AND CERTAIN FORMS 1099–
INT AND 1099–DIV. Statements to
form recipients of payments reportable
onForms 1098, 1099–A, 1099–B,
1099–C, 1099–G, 1099–MISC,
1099–R, 1099–S, 5498, 1099–DIV only
for section 404(k) dividends report-
able under section 6047, and 1099–
INT only for interest of $600 or more
made in the course of a trade or
business reportable under section
6041can be, but are not required to be,
copies of the official forms. If you do
not use the official form as the form
recipient statement, the substitute recipi-
ent statement must meet the following
requirements:
(1) The tax year, form number, and
form name must be the same as the
official form, and must be promi-
nently displayed together in one
area of the statement.
(2) The filer’s and the form recipi-
ent’s identifying information re-
quired on the official IRS form
must be included.
(3) All applicable money amounts
and information, including box
numbers, required to be reported to
the form recipient must be titled on
the form recipient statement in sub-
stantially the same manner as those
on the official IRS form. The cap-
tion ‘‘Federal income tax withheld’’
must be in bold face type on the
form recipient statement.Excep-
tion:If you are reporting a pay-
ment as ‘‘Other income’’ in box 3,
Form 1099–MISC, you may sub-
stitute appropriate explanatory lan-
guage for the box title. For ex-
ample, for payments of accrued
wages and leave to a beneficiary of
a deceased employee, you might
change the title of box 3 to ‘‘Ben-
eficiary payments’’ or something
similar. (You cannot make this
change on Copy A.)
(4) Appropriate instructions to the
form recipient, similar to those on
the official IRS form, must be
provided to aid in the proper re-
porting of the items on the form
recipient’s income tax return. For
payments reported onForm
1099–B, the requirement to include
instructions that are substantially
similar to those on the official IRS
form may be satisfied by providing
form recipients with a single set of
instructions with respect to all
Forms 1099–B statements required
to be furnished in a calendar year.
NOTE:If Federal income tax with-
held is shown onForm 1099–R or
W–2G, Copy B (to be attached to
the tax return) and Copy C (for
recipient’s/winner’s records)must
be furnished to the recipient. If
Federal income tax withheld is not
shown onForm 1099–R or
W–2G, only Copy C is required to
be furnished. However, instructions
similar to those contained on the
back of the official Copy B and
Copy C ofForm 1099–Rmust be
furnished to the recipient. For con-
venience, you may choose to pro-
vide both Copies B and C of Form
1099–R to the recipient.
(5) The quality of carbon used to
produce statements to recipients
must meet new standards as fol-
lows:
(a) all copies must beCLEARLY
LEGIBLE;
(b) all copies must have the capa-
bility to be photocopied;
(c) fading must not be of such a
degree as to preclude legibility
and the ability to photocopy. In
general, black chemical transfer
inks are preferred; other colors
are permitted only if the above
standards are met. Hot wax and
cold carbon spots are NOT per-
mitted on any of the internal
form plies. These spots are per-
mitted on the back of a mailer
top envelope ply.
(6) A mutual fund family may sepa-
rately state on one document (e.g.,
one piece of paper) the Form
1099–Binformation for a recipient
from each fund as required by
Form1099–B. However, the gross
proceeds,etc., from each transac-
tion within a fund must be sepa-
rately stated. The form must con-
tain an instruction to the recipient
that each fund’s amount and name,
not the name of the mutual fund
family, must be reported on the
recipient’s tax return. The form
cannot contain an aggregate total of
all funds.
(7) ForForm 1099–S, Proceeds
From Real Estate Transactions, you
may use a Uniform Settlement
Statement under the Real Estate
Settlement Procedures Act of 1974
(RESPA), as the written statement
to the transferor if it is conformed
by including on the statement the
legend described in (8)(e) below
and by designating which informa-
tion on the Uniform Settlement
Statement is being reported to IRS
onForm 1099–S.
(8) Form recipient statements must
contain the following legends:
(a)Form 1098—(i) ‘‘The informa-
tion in boxes 1, 2 and 3 is
important tax information and is
being furnished to the Internal
Revenue Service. If you are re-
quired to file a return, a negli-
gence penalty or other sanction
may be imposed on you if the
IRS determines that an underpay-
ment of tax results because you
overstated a deduction for this
mortgage interest or for these
points or because you did not
report this refund of interest on
your return.’’ (ii) ‘‘The amount
shown may not be fully deduct-
ible by you on your Federal
income tax return. Limitations
based on the cost and value of
the secured property may apply.
In addition, you may only deduct
an amount of mortgage interest
to the extent it was incurred by
you, actually paid by you, and
not reimbursed by another per-
son.’’
(b)Form 1099–A and 1099–C—
‘‘This is important tax informa-
tion and is being furnished to the
Internal Revenue Service. If you
are required to file a return, a
18

negligence penalty or other sanc-
tion may be imposed on you if
taxable income results from this
transaction and the IRS deter-
mines that it has not been re-
ported.’’
(c)1099–B, 1099–DIV, 1099–G,
1099–INT, 1099–MISC, and
W–2G(Copy C)— ‘‘This is im-
portant tax information and is
being furnished to the Internal
Revenue Service. If you are re-
quired to file a return, a negli-
gence penalty or other sanction
may be imposed on you if this
income is taxable and the IRS
determines that it has not been
reported.’’ Copy B of Form
W–2Gmust state ‘‘This informa-
tion is being furnished to the
Internal Revenue Service. Report
this income on your Federal tax
return. If this form shows Fed-
eral income tax withheld in box
2, attach this copy to your re-
turn.’’
(d)Form 1099–R, Copy B—‘‘Re-
port this income on your Federal
tax return. If this form shows
Federal income tax withheld in
box 4, attach this copy to your
return. This information is being
furnished to the Internal Revenue
Service.’’Form 1099–R, Copy
C—‘‘This information is being
furnished to the Internal Revenue
Service.’’
(e)Form 1099–S—‘‘This is impor-
tant tax information and is being
furnished to Internal Revenue
Service. If you are required to
file a return, a negligence penalty
or other sanction may be im-
posed on you if this item is
required to be reported and the
IRS determines that it has not
been reported.’’
(f)Form 5498—‘‘The information
in boxes 1, 2, 3, 4 and 5 is being
furnished to the Internal Revenue
Service.’’Note:If the trustee
does not issueForm 5498to a
participant because no contribu-
tions were made to an IRA for
the year, a year-end statement
issued to the participant reporting
the fair market value of the ac-
count must contain a similar leg-
end designating which informa-
tion is being furnished to IRS.
.04 COMPOSITE SUBSTITUTE
STATEMENT - FORMS SPECIFIED IN
7.03 ONLY. - A composite form recipi-
ent statement for forms specified in 7.03
is permitted when one filer is reporting
more than one of the related payments
during a calendar year to the same form
recipient. A composite statement is not
allowable for a combination of forms
listed in 7.01 and forms listed in 7.03
except that a filer may reportForm
1099–Binformation on a composite
form with the forms listed in 7.01 as
described in 7.02. Although the compos-
ite form recipient statement may be on
one sheet, the format of the composite
form recipient statement must satisfy the
requirements listed in items (1), (2), (3)
and (4) of 7.02 above in addition to the
requirements specified in 7.03. A com-
posite statement ofForms 1098 and
1099–INT(for interest reportable under
section 6049) IS NOT ALLOWABLE.
PART B - SPECIFICATIONS FOR
SUBSTITUTE FORMS TO BE FILED
WITH IRS (EXCEPT FORM W–2G)
SEC. 1. GENERAL
.01 The following specifications pre-
scribe the format requirements for
Forms 1096and Copy A ofForms
1098, 1099, and 5498. (See Part C for
Form W–2G specifications.)
.02 The form identifying number
(e.g., 9191 forForm 1099–DIV) must
be printed in non-reflective black
carbon-based ink in print positions 15
through 19 using an OCR A font. The
checkboxes located to the right of the
form identifying number must be 10-
point boxes, the void checkbox is in
print position 25 and the corrected
checkbox in position 33. These measure-
ments are from the left edge of the
paper, not including the perforated strip.
SEC. 2. SPECIFICATIONS FOR
FORMS 1096 AND COPY A OF
FORMS 1098, 1099 AND 5498
.01 The substitute form must be an
exact replica of the official IRS repro-
duction proof with respect to layout and
contents.NOTE:To determine the cor-
rect form measurements, see Exhibits A
through O at the end of this publication.
The specifications for Copy A of Forms
1098, 1099 and 5498 are provided in
Exhibits A through N, and specifications
for Form 1096 are provided in Exhibit
O.] Hot wax and cold carbon spots are
not permitted on any of the internal
form plies. These spots are permitted on
the back of a mailer top envelope ply.
Use of chemical transfer paper for Copy
A is acceptable. The Government Print-
ing Office (GPO) symbol must be de-
leted.
.02 Color and quality of paper for
Copy A (cut sheets and continuous
pinfeed forms) as specified by JCP Code
0–25, dated November 29, 1978, must
be white 100% bleached chemical wood,
optical character recognition (OCR)
bond produced in accordance with the
following specifications:
NOTE: Reclaimed fiber in any percent-
age is permitted provided the require-
ments of this standard are met.
(1) Acidity: Ph value, average,
not less than. . . . . . . . . . . . . . . . . . . . . . . .4.5
(2) Basis Weight 17 x 22
500 cut sheets . . . . . . . . . . . . . . . . . . . 18–20
Metric equivalent—g/m
2
. . . . . . . . . . . . . . 75
A Tolerance of65 pct.
shall be allowed.
(3) Stiffness: Average, each
direction, not less
than—milligrams . . . . . . . . . . . . . . . . . . . . 50
(4) Tearing strength: Average,
each direction, not less
than—grams. . . . . . . . . . . . . . . . . . . . . . . . 40
(5) Opacity: Average, not less
than—percent . . . . . . . . . . . . . . . . . . . . . . . 82
(6) Thickness: Average—
inch—0.0038
Metric equivalent—
mm—0.097
A tolerance of +0.0005 inch
(0.0127 mm) shall be allowed.
Paper shall not vary more than
0.0004 inch (0.0102 mm) from
one edge to the other.
(7) Porosity: Average, not less
than—seconds . . . . . . . . . . . . . . . . . . . . . . 10
(8) Finish (smoothness): Average,
each side—seconds . . . . . . . . . . . . . . . . 20–5
For information only,
the Sheffield
equivalent—units . . . . . . . . . . . . . . . 170–100
(9) Dirt: Average, each side,
not to exceed—parts
per million . . . . . . . . . . . . . . . . . . . . . . . . . . 8
.03 All printing on Forms 1098,
1099, and 5498 must be in red OCR
dropout ink, Flint J–6983 (formerly
Sinclair-Valentine) or an exact match,
except for the 4-digit form identifying
numbers, which must be printed in non-
reflective carbon-based black ink. The
shaded areas of any substitute form
should generally correspond to that
present on the official form. Printing on
Form 1096 above the statement:
‘‘Please return this entire page to the
Internal Revenue Service. Photocopies
are NOT acceptable.’’must be in red
OCR dropout ink (except for the 4 digit
form identifying number 6969). All
printing including and below the state-
ment described in the previous sentence
may be in any shade or tone of black
ink. Black ink should only appear on the
lower portion of the reverse side of
19

Form 1096where it would not bleed
through and interfere with scanning. The
instructions to filers are printed on the
back of the copy designated for the
Payer, Recipient for 1098, Lender for
Form 1099–A, Creditor for 1099–C,
Filer for 1099–S, or Trustee or Issuer
for Form 5498 in any ink color or tone.
Separation between fields must be 0.1
inch. Other than the Form 1099–R, the
numbered captions are printed as a solid
with no shaded background. Other print-
ing requirements are discussed below.
OCR Specifications
The contractor must have or initiate a
quality control program to assure OCR
ink density. In addition, the contractor
must have access to either a MacBeth
PCM–II tester or a Kidder 082A tester
to evaluate the ink at regular intervals
throughout a shift.
Paper and Ink
Readings will be made when printed
on approved 20 lb. white OCR bond
with a reflectance of not less than 80%.
Black ink used must not have a reflec-
tance greater than 15%. These readings
are based on requirements of the ‘‘REI
Input 80 Model C1 & D’’ Optical
Scanner using Flint Ink (formerly
known as Sinclair - Valentine J–6983
red ink) or equal.
MacBeth PCM II Tester
The tested Print Contrast Signal
(PCS) values when using the MacBeth
PCM–II tester on the ‘‘C’’ scale must
range from .01 minimum to .06 maxi-
mum.
Kidder 082A Tester
The tested Print Contrast Signal
(PCS) values when using the Kidder
082A tester on the Infra Red (IR) scale
must range from .12 minimum to .21
maximum. White calibration disc must
be 100%, sensitivity must be set at one
(1).
Alternative Tester
If an alternative tester is used it must
be approved by the Government so that
tested (PCS) values can be established
with this equipment. Approval may be
obtained by writing to the following
address:
Commissioner of Internal Revenue
Attn: HR:F:P:P Room 1237
Tax Forms Procurement Analyst
1111 Constitution Avenue, N.W.
Washington, DC 20224
.04 Typography - Type must be sub-
stantially identical in size and shape
with corresponding type on the official
form. All rules are either
1
⁄2-point or
3
⁄4-point. Rules must be identical to that
on the official IRS form. NOTE: The
form identifying number must be
nonreflective carbon-based black ink in
OCR A Font. .
05 Dimension - Three Forms 1098,
1099, or 5498 (Copy A) are contained
on a single page, except Form 1099–R
which contains two documents per page,
which is 8 inches wide (exclusive of
any snap-stubs and/or pinfeed holes) by
11 inches deep. There is a .33 inch top
margin from the top of the corrected
box, and there is a .25 inch right
margin. There is a
1
⁄329(0.0313’’) toler-
ance for the right margin. These mea-
surements are constant for allForms
1098, 1099 and 5498. The measure-
ments will be shown only once in the
exhibit section of this publication, on
theForm 1098. Exceptions to these
measurements will be shown on the
remainder of exhibits. If the right and
top margins are properly aligned, the
left margin for all forms will be correct.
All margins must be free of all printing.
See Exhibits A through O in this publi-
cation for the correct form measure-
ments.
.06 The depth of the individual trim
size of each form on a page must be the
same as that of the official form (3
2
⁄3
inches, except 5
1
⁄2inches for Form
1099–R).
.07 The words ‘‘For Paperwork Re-
duction Act Notice and instructions for
completing this form, seeInstructions
for Forms 1099, 1098, 5498, and
W–2G’’mustbe printed on Copy A (and
Copy C). The words ‘‘For more infor-
mation and the Paperwork Reduction
Act Notice, see the Instructions for
Forms 1099, 1098, 5498, and W–2G’’
mustbe printed on Form 1096.
.08 The OMB Numbermustbe
printed on Copies A and Form 1096 in
the same location as that on the official
form.
.09Privately printed continuous sub-
stitute forms (Copy A) must be perfo-
rated at each 119(3 per page, or 2 per
page for 1099–R) page depth. No perfo-
rations are allowed between the 3
2
⁄39
forms (or 5
1
⁄29for Form 1099–R) on a
single copy page of Copy A.
.10 The words ‘‘Do NOT Cut or
Separate Forms on This Page’’ must be
printed in red dropout ink (as required
by form specifications) between the
three, or two forForms 1099–R.
NOTE: Perforations are required be-
tween all the other individual copies
(Copies B and C, and Copies 1 and 2
forForm 1099–R and Form 1099–
MISC, and Copy D forForm 1099–R)
included in the set.
.11 Chemical transfer paper is permit-
ted for Copy A only if the following
standards are met:
(1) Only chemically backed paper
is acceptable for Copy A.
(2) Carbon coated forms are not
permitted. Front and back chemically
treated paper cannot be processed prop-
erly by machine.
(3) Chemically transferred images
must be black in color.
.12 Hot wax and cold carbon spots
are NOT permitted for Copy A. Inter-
leaved carbon should be black and must
be of good quality to assure legibility of
information on all copies to preclude
smudging. All copies must be
CLEARLY LEGIBLE. Fading must not
be of such a degree as to preclude
legibility.
.13 Printer’s symbol —- The GPO
symbol must not be printed on substitute
Copy A. Instead, the employer identifi-
cation number (EIN) of the forms
printer must be entered in the bottom
margin on the face of each individual
form of Copy A, or the bottom margin
on the reverse side of each Form 1096.
THE FORM MUST NOT CONTAIN
THE STATEMENT ‘‘IRS AP-
PROVED.’’
.14 A postal indicia may be used if it
meets the following criteria: a) it is
printed in the OCR ink color prescribed
for the form; and b) no part of the
indicia is within 1 print position of the
scannable area.
PART C. SPECIFICATIONS FOR
SUBSTITUTE FORMS W–2G TO BE
FILED WITH IRS
SEC. 1. GENERAL
.01 The following specifications pre-
scribe the format requirements forForm
W–2G—COPY A ONLY.
.02 A filer may file a substituteForm
W–2Gwith the IRS (hereinafter re-
ferred to as ‘‘substitute Copy A’’). The
substitute form (filed with the IRS) must
be an exact replica of the official form
with respect to layout and contents.
20

SEC. 2. SPECIFICATIONS FOR
COPY A FOR FORMS W–2G
.01 Color and Quality of Paper—
Paper for Copy A must be white chemi-
cal wood bond, or equivalent, 20 pound
(basis 17 X 22–500), plus or minus 5
percent. The paper must consist substan-
tially of bleached chemical wood pulp
and be free from unbleached or ground
wood pulp or recycled printed paper. It
also must be suitably sized to accept ink
without feathering.
.02 Color and Quality of Ink—All
printing must be in a high quality
non-gloss black ink. Bar codes should
be free from picks and voids.
.03 Typography—The type must be
substantially identical in size and shape
with that on the official form. All rules
on the document are either
1
⁄2point
(.007 inch), 1 point (0.015 inch), or 3
point (0.045). Vertical rules must be
parallel to the left edge of the docu-
ment; horizontal rules, to the top edge.
.04 Dimensions—The official form is
8 inches wide x 3
2
⁄3inches deep, exclu-
sive of a
2
⁄3inch snap stub on the left
side of the form. The snap feature is not
required on substitutes. The top and
right margins must be
1
⁄4inch plus or
minus .0313. If the top and right mar-
gins are properly aligned, the left mar-
gin for all forms will be correct. All
margins must be free of any printing. If
the substitute forms are in continuous or
strip form, they must be burst and
stripped to conform to the size specified
for a single form.
(1) The width of a substitute Copy
A must be 8 inches. The left margin
must be free of all printing other than
that shown on the official form.
(2) The depth of a substitute Copy
A must be 3
2
⁄3inches.
.05 Hot wax and cold carbon spots
are not permitted on any of the internal
form plies. These spots are permitted on
the back of a mailer top envelope ply.
Interleaved carbons, if used, should be
black and of good quality to preclude
smudging.
.06 Printer’s Symbol—The Govern-
ment Printing Office (GPO) symbol
must not be printed on substitute Forms
W–2G. Instead the employer identifica-
tion number (EIN) of the forms printer
must be printed in the bottom margin on
the face of each individual form of
Copy A of such substitute forms. The
form must not contain the statement
’’IRS approved.‘‘
PART D. ADDITIONAL
INSTRUCTIONS FOR FORMS 1098,
1099, 5498, AND W–2G
SEC. 1. OTHER COPIES
.01 Copies B, C, and in some cases
D, 1, and 2, are included in the official
assembly for the convenience of the
filer. There is no legal requirement that
privately printed substitute forms in-
clude all these copies, Copies B, and in
some cases Copies C, will satisfy the
requirement of the law and regulations
concerning the statement of information
that is required to be furnished to the
form recipient.NOTE:If Federal in-
come tax withheld is shown onForm
W–2G or 1099–R, Copy B (to be
attached to the tax return) and Copy C
mustbe furnished to the recipient. Copy
D (Forms 1099–R and W–2G) may be
desired as a filer record copy. Only
Copy A should be filed with the IRS.
.02 Arrangement of Assembly- The
parts of the assembly must be arranged,
from top to bottom, as follows: (a) All
forms-Copy A ‘‘For Internal Revenue
Service Center.’’ (b) Form 1098- Copy
B ‘‘For Payer’’; Copy C ‘‘For Recipi-
ent.’’ (c) Form 1099–A- Copy B ‘‘For
Borrower’’; Copy C ‘‘For Lender.’’ (d)
Form 1099–C Copy B ‘‘For Debtor’’;
Copy C ‘‘For Creditor’’; (e) Forms
1099–B, 1099–DIV, 1099–G, 1099–INT,
1099–OID, and 1099–PATR- Copy B
‘‘For Recipient’’; Copy C ‘‘For Payer.’’
(f) Form 1099–MISC- Copy 1 ‘‘For
State Tax Department’’; Copy B ‘‘For
Recipient’’; Copy 2 ‘‘To be filed with
recipient’s state income tax return, when
required.’’; Copy C ‘‘For Payer.’’ (g)
Form 1099–R- Copy 1 ‘‘For State, City,
or Local Tax Department’’; Copy B
‘‘Report this income on your Federal tax
return. If this form shows Federal in-
come tax withheld in box 4, attach this
copy to your return.’’; Copy C ‘‘For
Recipient’s Records’’; Copy 2 ‘‘File this
copy with your state, city, or local
income tax return, when required.’’;
Copy D ‘‘For Payer.’’ (h) Form 1099–S-
Copy B ‘‘For Transferor’’; Copy C ‘‘For
Filer.’’ (i) Form 5498– Copy B ‘‘For
Participant’’; Copy C ‘‘For Trustee or
Issuer.’’ (j) Form W–2G- Copy 1 ‘‘For
State Tax Department’’; Copy B ‘‘Re-
port this income on your Federal tax
return. If this form shows Federal in-
come tax withheld in box 2, attach this
copy to your return.’’ Copy C ‘‘For
Winner’s Records’’; Copy 2 ‘‘Attach
this copy to your state income tax
return, if required.’’; Copy D ‘‘For
Payer.’’
.03 Perforations are required between
forms on all copies except Copy A to
enable the separation of individual
forms. Copy A of Form W–2G may be
perforated.
SEC. 2. OMB REQUIREMENTS
.01 Office of Management and Bud-
get (OMB) Requirements for Substitute
Forms—Public Law 96–511 requires
that : (1) OMB approve Internal Rev-
enue Service tax forms, (2) each form
show (in the upper right corner) the
OMB approval number, and (3) the
form (or its instructions) state why IRS
is collecting the information, how it will
be used and whether it must be given to
IRS. The official IRS forms or instruc-
tions contain this information and any
substitute must contain it also.
.02 The OMB requirements for sub-
stitute IRS forms are:
(1) All substitute forms,including
substitute statements to recipients,
must show the OMB number as it
appears on the official IRS form;
(2) For Copy A, the OMB number
must appear exactly as shown on the
official IRS form;
(3) For any copy other than Copy
A, the OMB number must use one of
the following formats:
(a) OMB No. XXXX–XXXX
(preferred) or;
(b) OMB # XXXX–XXXX.
(4) All substitute forms (Copy A
only) must state ‘‘For Paperwork Reduc-
tion Act Notice, see Instructions for
Forms 1099, 1098, 5498, and W–2G.’’
.03 The official OMB numbers may
be obtained from reproduction proofs or
official IRS printed forms.
SEC 3. REPRODUCIBLE COPIES
.01 As of April 30, 1996, IRS discon-
tinued taking orders for reproducible
and information copies of federal tax
materials. However, there will be several
new options available to obtain federal
tax material in the future. The new
options are:
(1)Internal Revenue Information
Services (IRIS)—IRIS is housed
within FedWorld, known also as
the Electronic Marketplace of
U.S. Government Information.
IRIS at FedWorld can be reached
by:
(a) Modem (dial up) at (703)
321–8020,
21

(b) by Internet - Telnet to
iris.irs.ustreas.gov
(c) by File Transfer Protocol
(FTP) connect to -
ftp.irs.ustreas.gov
(d) or by World Wide Web -
http://www.irs.ustreas.gov
(2)IRS Federal Tax Forms CD–
ROM—The IRS also offers an
alternative to downloading elec-
tronic files from IRIS and pro-
vides prior-year access to tax
forms and instructions through
it’s Federal Tax Forms CD–
ROM. First offered during 1994,
the CD will again be available
for the upcoming filing season.
For system requirements and to
order the 1996 Federal Tax
Forms CD–ROM contact the
Government Printing Office’s
(GPO’s) Superintendent of Docu-
ments either:
(a) by telephone (202) 521–
1800; or
(b) electronically through GPO’s
Federal Bulletin Board on
(202) 512–1387.
(3)Government Printing Office
Superintendent of Documents
Bookstores—The Government
Printing Office Superintendent of
Documents Bookstores also sell
individual copies of tax forms,
instructions and publications.
Call (202) 521–1800 to find the
bookstore nearest to you.
.02 Forms 1096, 1098, 1099 Series,
and 5498 are provided electronically on
the IRS home page, IRIS bulletin board
system, and on the Federal Tax Forms
CD–ROM, butCANNOTbe used for
filing with IRS when printed from a
conventional laser printer. These forms
contain drop-out ink requirements as
described in Part B, Section 2. of this
publication.
SEC. 4. EFFECT ON OTHER
REVENUE PROCEDURES
Revenue Procedure 95–30, 1995–1
C.B. 27 I.R.B. 9, covering paper returns
and statements for payments made dur-
ing the 1995 calendar year is hereby
superseded.
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Part IV. Items of General Interest
Foundations Status of Certain
Organizations
Announcement 96–69
The following organizations have
failed to establish or have been unable
to maintain their status as public chari-
ties or as operating foundations. Accord-
ingly, grantors and contributors may not,
after this date, rely on previous rulings
or designations in the Cumulative List
of Organizations (Publication 78), or on
the presumption arising from the filing
of notices under section 508(b) of the
Code. This listing doesnotindicate that
the organizations have lost their status
as organizations described in section
501(c)(3), eligible to receive deductible
contributions.
Former Public Charities. The follow-
ing 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:
Absalom Jones Cultural Center Inc.,
Philadelphia, PA
Acts of The Holy Spirit, Philadelphia,
PA
African Council Inc., Englewood, NJ
African Peoples Relief Fund Inc.,
Washington, DC
Against All Odds Ministries Full Gospel
Church, Philadelphia, PA
AIDS Interfaith Network Inc., New
Haven, CT
AIDS Resources of Central Shenandoah,
Staunton, VA
Aisquith-Somerset Development Inc.,
Columbia, MD
Aleph-Bet Child Development Center
Incorporated, Randallstown, MD
Allied Pharmacists Association,
Baltimore, MD
Alpha Scholarship Foundation Inc.,
Boston, MA
Altamont Society Inc., Meadowview,
VA
Alternatives Research Center Inc., Toms
River, NJ
American Civil War Association,
Winchester, VA
American Friends of Beth Jacob
Teachers Institute of Jerusalem,
Brooklyn, NY
American Friends of Birkas Rifka Inc.,
Lakewood, NJ
American Friends of Universe Fund
Inc., Quebec, CA
American Friends of Yeshiva Halacha
Lmoshe, Inc., Queens, NY
American Housing Foundation Inc.,
Fairfax, VA
American Institute for Public Health
Education Inc., Lutherville, MD
American Public Priorities Institute,
Washington, DC
American School of Tampico
Foundation, Wilmington, DE
American Society of Soviet Political
Prisoners, New York, NY
A Musical Journey in Jazz Inc., Shaker
Heights, OH
Apostolic Christian Village Inc.,
Francesville, IN
Appalachian Youth Ministries,
Abingdon, VA
Artist Citizen Corp., Dover, NH
Art of Living Institute, Northampton, PA
Aspen Cancer Conference Inc.,
Kensington, MD
Battery Park City Parks Corporation,
New York, NY
Bay Cove Moseley Group Home Inc.,
Boston, MA
Bay Shores Chapel Inc., Jupiter, FL
Benefit Foundation for Children Inc.,
Boston, MA
B H R A G S Housekeeping Inc.,
Brooklyn, NY
B H R A G S Senior Citizens Program
Inc., Brooklyn, NY
B H R A G S Thompkins Park Inc.,
Brooklyn, NY
Black Administrators Faculty and Staff,
Brookville, NY
Blauvelt Lions Charities, Inc., Blauvelt,
NY
Boettner Institute of Financial
Gerontology, Philadelphia, PA
Boys and Girls Club of Bentonville
Bella Vista Arkansas, Inc.,
Bentonville, AR
Brain Injury Association of Greater
Rochester, Inc., Rochester, NY
Bridge Street Senior Citizens Center,
Inc., Brooklyn, NY
Brotherhood Classic Association, Inc.,
Bronx, NY
Brunswick Hospital Center Foundation,
Amityville, NY
Burgettstown Area Youth Baseball
Association, Burgettstown, PA
Cape Ann Bike Trek Assoc. Partners in
Rehab, Medford, MA
Capital City Kiwanis Club Foundation
Inc., Tallahassee, FL
Capital Region School and Business
Alliance, Inc., Albany, NY
Cathedral Tenants United, Inc., Boston,
MA
Center for Soviet-American Musical
Exchange, Inc., Carmel, NY
Central Florida Area Health Education
Center Inc., Apopka, FL
Chelmsford Youth Basketball League,
Inc., Chelmsford, MA
Chinese Scalp Acupuncture Association
International Inc., San Francisco, CA
Christ the King Counseling Ministry,
Columbus, OH
Citizens for a Safe Environment, Inc.,
North Muskegon, MI
Citizens Promoting the Book of Hope,
Cincinnati, OH
Citizen’s Rapid Transit Committee,
Denver, CO
Clerc Foundation Ltd., Boston, MA
CMU Presents, Inc., New York, NY
Coalition of Consumer Self Advocates,
Providence, RI
Cognosco, Inc., New Bedford, MA
Community Alcohol and Drug
Awareness Committee, Inc.,
Chelmsford, MA
Dallas-Fort Worth Hebert High School
Alumni Association, Dallas, TX
Danvers Educational Enrichment
Program, Inc., Danvers, MA
Devereaux Corporation, Lanham, MD
Discovery Center A Blacks Hills
Handon Museum, Rapid City, SD
Dixie Child Care Inc., Springfield, LA
Earthcard Land Trust Inc., Melbourne,
FL
Earthkind International, Washington, DC
East Side Coalition of Arts, Inc.,
Buffalo, NY
Eddy’s Miracle Donors Henry County
Chapter, Paris, TN
Edison Boosters Club Inc., Minneapolis,
MN
Environscape, Inc., Lexington, KY
Ethical Treatment in Health Care, Inc.,
Weston, MA
Faiths Way, Saline, MI
Fathers, Inc., Roxbury Crossing, MA
Feres Project Foundation Inc., Meridian,
MS
Flamingo Park Neighborhood
Association, West Palm Beach, FL
Florida Association for Staff
Development Inc., Orlando, FL
Florida Federation of Community
Development Corporations
Incorporated, Miami, FL
Florida Sun Coast Figure Skating Club
Inc., Clearwater, FL
Forest & Trees Inc., Deland, FL
Forest Park School Foundation, Crystal
Falls, MI
420 Gifford Street Hospitality House for
Youth, Inc., Syracuse, NY
Foster Manor Apartments Inc.,
Lancaster, OH
38

Fort Des Moines, Des Moines, IA
47th Precinct Youth Council, Bronx, NY
Friends of Dade County Elderly Inc.,
Miami, FL
Friends of Haiti National Foundation
Inc., Miami, FL
Friends of Melrose Football, Inc.,
Melrose, MA
Friends of The Ashby Public Library,
Ashby, MA
Friends of The Rapides Library Inc.,
Alexandria, LA
Friends of Whittier, Lorain, OH
Friends of Woodside, Inc., Colchester,
VT
Fund for Special Music School of Music
NY, Inc., Stamford, CT
Garden of the Child, Inc., Chester, NY
Gaston Futures, Institute, Inc., Gastonia,
NC
General Resource Guidance Center,
Alice, TX
Greater Cincinnati Blues Society Inc.,
Cincinnati, OH
Hampden County Sheriffs Dept Sexual
Abuse Treatment Program, Ludlow,
MA
Hands Extended Ministries, St. Francis,
MN
Harlem Girls Ensemble Inc., New York,
NY
Harlem Jazz Homecoming Festival, Inc.,
New York, NY
Hartford Sunrise Sunshine Fund, Inc.,
Hartford, CT
Harvest Christian Mission, Memphis,
TN
Hatian Community AIDS Outreach
Project, Inc., Dorchester, MA
Health Services Development Inc.,
Washington, DC
Helping Hands Community Hospice,
Inc., Cordele, GA
Hidden Signal Theatre Company, Inc.,
Brooklyn, NY
Holocaust Educational Center of Volusia
& Flagler Counties, Palm Coast, FL
Housing Partnership Inc., Delray Beach,
FL
Hudson Valley Wind Symphony, Inc.,
Bardonia, NY
Human Resources Training &
Development Institute Inc., Miami,
FL
I Love America Education Foundation,
Lakewood, CO
Ilankai Thamil Sangam Florida Chapter
Inc., Coral Springs, FL
Inner Change, Inc., Newburgh, IN
International Foundation for Eye
Transplant Research, Inc., New York,
NY
Isadora Duncan International Center for
Dance, New York, NY
Jackson Foundation, New Milford, CT
James Kavanaugh Institute, Highland
Park, IL
Jesus Never Fails, Chicago, IL
Jewish Media Workshop, Bensalem, PA
J Jireh Ministries, Columbus, OH
Kayumanggi Choral, Inc., New York,
NY
Keren Ahavat Achim, Inc., Brooklyn,
NY
Knox County Child Abuse Prevention
Council, Inc., Vincennes, IN
Lena Burkard Public Charities Inc.,
Kirk, CO
Liberty City Optimist Club of Florida
Inc., Miami, FL
Lion Study, Englewood, CO
Little Falls Sports Arena Inc., Little
Falls, MN
Los Brazos De Cristo, McAllen, TX
Louisiana Association for the Education
of Young Children, Metairie, LA
Masters Plan Inc., Sarasota, FL
MBA of New York Scholarship
Foundation, Inc., New York, NY
Mennonite Disaster Service of Eastern
Pennsylvania & New Jersey,
Souderton, PA
Miami Artwords Inc., Coral Gables, FL
Middle Creek National Battlefield
Foundation, Inc., Prestonsburg, KY
Mike Reynolds Memorial Scholarship
Fund, Des Moines, IA
Minority Business Council Inc.,
Pompano Beach, FL
Mt. Zion Safe House, Inc., Kalamazoo,
MI
Multinational Transitional Housing
Program of New Jersey, Orange, NJ
National Association of Italian American
Police Officers, Inc., Stoneham, MA
National Science Research Institute Inc.,
Abingdon, MD
National We Care Foundation,
Carrollton, TX
Neighborhood Women of
Williamsburg-Greenpoint, Inc.,
Brooklyn, NY
19th Street Baptist Community
Development Corporation,
Philadelphia, PA
North American Plant Preservation
Council, Inc., Renick, WV
North Aurora Baseball Association,
North Aurora, IL
North Kingstown Business-Education
Partnership, Inc., North Kingstown,
RI
Northwest Suburban Christian Academy,
Lake Zurich, IL
Off-Broadways Best Inc., Hollywood,
FL
Old Broadway House, Inc., New York,
NY
100 Black Men of Maryland Inc.,
Baltimore, MD
Open Hearth, New Castle, ME
Paleontological Research Institute, Inc.,
Arlington, TX
Parenting Partnerships Inc., Lacombe,
LA
Paul A Nuzzo Memorial Scholarship
Fund Inc., Tampa, FL
Phoenix Project I, Inc., Detroit, MI
Pilgrim Productions, Elmendorf, TX
PTA Florida Congress Gulf Gate
Elementary, Sarasota, FL
Puertorican and Caribbean Organization
(PACO), Fairborn, OH
Ravenwood Community Betterment,
Ravenwood, MO
Repairers of the Breach Inc.,
Milwaukee, WI
Sampson Haven Inc., Clinton, NC
Santas Anonymous of East Dupage Inc.,
Chicago, IL
Saturn Institute, St. Paul, MN
Schiller International University Alumni
Association Inc., England
School Buildings Inc., Atlanta, GA
Search for Missing Children Inc.,
Plantation, FL
Self Employment Training Associates
Corporation SETA, St. Petersburg, FL
Sharenet Association, Independence,
MO
Sharon Glen, Wheaton, IL
Show Theatre Group, Chicago, IL
Sirach House Inc., West Orange, NJ
Skyview Village Inc., Denver, CO
South African Azanian Student
Movement—SAASM, Washington,
DC
South Dakota Expressions, Sioux Falls,
SD
South Hall Community Development
Corp., Alcoa, TN
South Pointe Family & Children Center
Inc., Miami, FL
Southwest Animal Rehabilitation, Inc.,
Angel Fire, NM
Southwest Just Say No Club,
Springdale, AR
Sports Against Drugs International Inc.,
McLean, VA
Springfield Education Association
Philanthropic Fund Inc., Union, NJ
St. Agnes Foundation, Minneapolis, MN
St. Elizabeth’s Children Home,
Lexington, MS
Stairways Supported Housing
Corporation, Erie, PA
Student Foundation of Florida Institute
of Technology Inc., Melbourne, FL
Tampa Bay Wheelchair Athletic
Association Inc., Belleair Beach, FL
TBJVC, Inc., Dublin, OH
39

Technology Learning Center Inc.,
Milwaukee, WI
Til Healing Comes Ministries,
Bolingbrook, IL
Tom Stearns Memorial Scholarship
Fund, Summerville, TX
Total Access for the Disabled,
Lynchburg, VA
Towson Catholic High School Alumni
Association Inc., Towson, MD
Transpersonal Network Inc., Chicago, IL
Transportation 2000, Denver, CO
United Cerebral Palsy of Palm Beach &
Mid-Coast Counties Inc., Miami, FL
United Spirit for AIDS Inc., Myrtle
Beach, SC
Urbancrest Community Urban
Redevelopment Corporation,
Urbancrest, OH
Urology Education and Research
Foundation Inc., Hinsdale, IL
Vacaville Pony League, Inc., Vacaville,
CA
Vanceboro Rotary Club Foundation Inc.,
Vanceboro, NC
Virginia Beach Police Athletic League,
Virginia Beach, VA
Virginia Boys Gymnastic Booster Club,
Oakton, VA
Virginia Hunger Foundation, Richmond,
VA
Voices United for Israel, Grandview,
MO
Walworth Countryside Conservation
Foundation Inc., Delavan, WI
Wayne County Community Foundation,
Honesdale, PA
Western Institute of Technology, Inc.,
Salt Lake City, UT
Western Maryland Conservancy Inc.,
Frostburg, MD
West Philadelphia Neighborhood
Enterprise Center, Philadelphia, PA
West Virginia Basic Skills and
Computer Education Foundation, Inc.,
Charleston, WV
Whitfield Education Foundation, Dalton,
GA
Willing House, Philadelphia, PA
Wisconsin Womens Golf Club Inc.,
Monona, WI
Wolf Bay Wildlife Refuge Inc., Elberta,
AL
Woodland Volunteer Fire Department
Benevolent Fund, Woodland, NC
WRC Health Care Support Services,
Brookville, PA
Wysiwyg Theatre Company, Chicago, IL
Yanomamo Survival Fund, Inc., Santa
Barbara, CA
Yazoo Housing Resident Council, Yazoo
City, MS
Young Shakespeare Players, Evanston,
IL
If an organization listed above sub-
mits information that warrants the re-
newal of its classification as a public
charity or as a private operating founda-
tion, the Internal Revenue Service will
issue a ruling or determination letter
with the revised classification as to
foundation status. Grantors and contribu-
tors may thereafter rely upon such rul-
ing 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 classi-
fication of foundation status in the Inter-
nal Revenue Bulletin.
Deletions from Cumulative List of
Organizations Contributions to
Which Are Deductible Under
Section 170 of the Code
Announcement 96–70
The name of an organization that no
longer qualifies as an organization de-
scribed in section 170(c)(2) of the Inter-
nal Revenue Code of 1986 is listed
below.
Generally, the Service will not disal-
low deductions for contributions made
to a listed organization on or before the
date of announcement in the Internal
Revenue Bulletin that an organization
no longer qualifies. However, the Ser-
vice is not precluded from disallowing a
deduction for any contributions made
after an organization ceases to qualify
under section 170(c)(2) if the organiza-
tion has not timely filed a suit for
declaratory judgment under section 7428
and if the contributor (1) had knowledge
of the revocation of the ruling or deter-
mination letter, (2) was aware that such
revocation was imminent, or (3) was in
part responsible for or was aware of the
activities or omissions of the organiza-
tion that brought about this revocation.
If on the other hand a suit for de-
claratory judgment has been timely
filed, contributions from individuals and
organizations described in section
170(c)(2) that are otherwise allowable
will continue to be deductible. Protec-
tion under section 7428(c) would begin
on August 5, 1996, and would end on
the date the court first determines that
the organization is not described in
section 170(c)(2) as more particularly
set forth in section 7428(c)(1). For indi-
vidual contributors, the maximum de-
duction protected is $1,000, with a hus-
band and wife treated as one contributor.
This benefit is not extended to any
individual who was responsible, in
whole or in part, for the acts or omis-
sions of the organization that were the
basis for revocation.
Frank Nappi Foundation
Ashtabula, OH
Section 7428(c) Validation of
Certain Contributions Made During
Pendency of Declaratory Judgment
Proceedings
This announcement serves notice to
potential donors that the organization
listed below has recently filed a timely
declaratory judgment suit under section
7428 of the Code, challenging revoca-
tion of its status as an eligible donee
under section 170(c)(2).
Protection under section 7428(c) of
the Code begins on the date that the
notice of revocation is published in the
Internal Revenue Bulletin and ends on
the date on which a court first deter-
mines that an organization is not de-
scribed in section 170(c)(2), as more
particularly set forth in section
7428(c)(1). In the case of individual
contributors, the maximum amount of
contributions protected during this pe-
riod is limited to $1,000, with a husband
and wife being treated as one contribu-
tor. This protection is not extended to
any individual who was responsible, in
whole or in part, for the acts or omis-
sions of the organization that were the
basis for the revocation. This protection
also applies (but without limitation as to
amount) to organizations described in
section 170(c)(2) which are exempt
from tax under section 501(a). If the
organization ultimately prevails in its
declaratory judgment suit, deductibility
of contributions would be subject to the
normal limitations set forth under sec-
tion 170.
Music Square Church
Van Buren, AR
40

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as ‘‘rulings’’)
that have an effect on previous rulings
use the following defined terms to de-
scribe the effect:
Amplifieddescribes a situation where
no change is being made in a prior
published position, but the prior position
is being extended to apply to a variation
of the fact situation set forth therein.
Thus, if an earlier ruling held that a
principle applied to A, and the new
ruling holds that the same principle also
applies to B, the earlier ruling is ampli-
fied. (Compare withmodified, below).
Clarifiedis used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously
published ruling and points out an es-
sential difference between them.
Modifiedis used where the substance
of a previously published position is
being changed. Thus, if a prior ruling
held that a principle applied to A but not
to B, and the new ruling holds that it
applies to both A and B, the prior ruling
is modified because it corrects a pub-
lished position. (Compare withamplified
andclarified, above).
Obsoleteddescribes a previously pub-
lished ruling that is not considered de-
terminative with respect to future trans-
actions. This term is most commonly
used in a ruling that lists previously
published rulings that are obsoleted be-
cause of changes in law or regulations.
A ruling may also be obsoleted because
the substance has been included in regu-
lations subsequently adopted.
Revokeddescribes situations where
the position in the previously published
ruling is not correct and the correct
position is being stated in the new
ruling.
Supersededdescribes a situation
where the new ruling does nothing more
than restate the substance and situation
of a previously published ruling (or
rulings). Thus, the term is used to
republish under the 1986 Code and
regulations the same position published
under the 1939 Code and regulations.
The term is also used when it is desired
to republish in a single ruling a series of
situations, names, etc., that were previ-
ously 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,modifiedandsuper-
sededdescribes a situation where the
substance of a previously published rul-
ing 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 su-
perseded.
Supplementedis used in situations in
which a list, such as a list of the names
of countries, is published in a ruling and
that list is expanded by adding further
names in subsequent rulings. After the
original ruling has been supplemented
several times, a new ruling may be
published that includes the list in the
original ruling and the additions, and
supersedes all prior rulings in the series.
Suspendedis used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.
Abbreviations
The following abbreviations in current use and
formerly used will appear in material published in
the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C.—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance 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.
41

Numerical Finding List
1
Bulletins 1996–27 through 1996–31
Announcements:
96–61, 1996–27 I.R.B.72
96–62, 1996–28 I.R.B.55
96–63, 1996–29 I.R.B.18
96–64, 1996–29 I.R.B.18
96–65, 1996–29 I.R.B.18
96–66, 1996–29 I.R.B.19
96–67, 1996–30 I.R.B.27
96–68, 1996–31 I.R.B.45
Notices:
96–36, 1996–27 I.R.B.11
96–37, 1996–31 I.R.B.29
96–38, 1996–31 I.R.B.29
Proposed Regulations:
CO–24–96, 1996–30 I.R.B.22
CO–25–96, 1996–31 I.R.B.30
CO–26–96, 1996–31 I.R.B.31
FI–28–96, 1996–31, I.R.B.33
FI–48–95, 1996–31 I.R.B.36
FI–59–94, 1996–30 I.R.B.23
IA–26–94, 1996–30 I.R.B.24
IA-292-84, 1996–28 I.R.B.38
Railroad Retirement Quarterly Rate
1996–29 I.R.B.14
Revenue Procedures:
96–36, 1996–27 I.R.B.11
96–37, 1996–29 I.R.B.16
Revenue Rulings:
96–33, 1996–27 I.R.B.4
96–34, 1996–28 I.R.B.4
96–35, 1996–31 I.R.B.4
96–36, 1996–30 I.R.B.6
Tax Conventions:
1996–28 I.R.B. 36
Treasury Decisions:
8673, 1996–27 I.R.B.4
8674, 1996–28 I.R.B.7
8675, 1996–29 I.R.B.5
8676, 1996–30 I.R.B.4
8677, 1996–30 I.R.B.7
8678, 1996–31 I.R.B.11
8679, 1996–31 I.R.B.4
1
A cumulative list of all Revenue Rulings, Rev-
enue Procedures, Treasury Decisions, etc., pub-
lished in Internal Revenue Bulletins 1996–1
through 1996–26 will be found in Internal Rev-
enue Bulletin 1996–27, dated July 1, 1996.
42

Finding List of Current Action on
Previously Published Items
1
Bulletins 1996–27 through 1996–31
*Denotes entry since last publication
Revenue Procedures:
95–29
Superseded by
96–36, 1996–27 I.R.B.11
95–29A
Superseded by
96–36, 1996–27 I.R.B.11
1
A cumulative finding list for previously published
items mentioned in Internal Revenue Bulletins
1996–1 through 1996–26 will be found in Internal
Revenue Bulletin 1996–27, dated July 1, 1996.
43

Index
Internal Revenue Bulletins 1996–27
Through 1996–31
For index of items published during
the first six months of 1996, see
I.R.B. 1996–27, dated July 1, 1996.
The abbreviation and number in pa-
renthesis following the index entry
refer to the specific item; numbers in
roman and italic type following the
parenthesis refer to the Internal Rev-
enue 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
TDO Treasury Department Order
TCTax Convention
SPR Statement of Procedural
Rules
PTEProhibited Transaction
Exemption
EMPLOYMENT TAXES
Railroad retirement:
Rate determination, quarterly (July 1,
1996) 29,14
INCOME TAX
Bonds:
Qualified mortgage bonds:
Mortgage credit certificates:
National median gross income
(RP 37) 29,16
Claiming a refund. U.S. v. IBM (Notice
37) 31,29
Employee plans:
Funding:
Full funding limitations, weighted
average interest rate, June 1996
(Notice 36) 27,11; July 1996
(Notice 38) 31,29
Interest:
Investment:
Federal short-term, mid-term, and
long-term rates, July 1996 (RR
34) 28,4
INCOME TAX—Continued
Inventories:
LIFO:
Price indexes, department stores,
May 1996 (RR 36) 30,6
Low-income housing credit:
Bond factor amounts, April—June
1996 (RR 33) 27,4
FEMA (RR 35) 31,4
Proposed regulations:
26 CFR 1.61–8(b), revised; 1.451–
1(g), added; 1.467–1, amended;
1.467–4, amended; 1.467–0 through
–8, added; rental agreements (IA–
292–84) 28,38
26 CFR 1.61–12(c), 1.163–7(c),
1.171–1—1.171–4, 1.1016–5(b),
revised; 1.163–13, 1.171–5, added;
1.1016–9, removed; amortizable
bond premium (FI–48–95) 31,
36
26 CFR 1.148–5(d)(6)(iv)—(viii) and
intermediary sections; 1.148–
5(e)(2)(iv), added; arbitrage restric-
tions on tax-exempt bonds (FI–28–
96) 31,33
26 CFR 1.166–3(a)(3), added; bad
debts modifications and dealer as-
signments of notional principal
contracts (FI–59–94) 30,23
26 CFR 1.382–5, –8, added; 1.382–
2(a)(1)(iv), revised; consolidated
returns, short taxable years for
controlled groups (CO–26–96) 31,
31
26 CFR 1.1202–0, –2, added; quali-
fied small business stock (IA–26–
94) 30,24
26 CFR 1.1502–15, –21, –22, –23,
added; consolidated returns, lim-
itations on the use of certain losses
and deductions (CO–24–96) 30,
22
26 CFR 1.1502–90T—1.1502–99T
and intermediary sections, added;
consolidated group, net operating
loss carryforwards and built-in
losses and credits following owner-
ship change, limitation (CO–25–96)
31,30
Regulations:
26 CFR 1.110–3, added; debt instru-
ments modifications (TD 8675) 29,
5
INCOME TAX—Continued
Regulations:—Continued
26 CFR 1.163–7(a), added; 1.446–4,
amended; 1.483–2T, removed;
1.483–4, added; 1.1001–1, revised;
1.1012–1(g), revised; 1.1271–0(b),
amended; 1.1272–1(c)(7), added;
1.1274–2(g), revised; 1.1274–2(i)
and (j), added; 1.1275–2(g), (h), (i),
(j), added; 1.1275–2T, removed;
1.1275–4, added; 1.1275–5(a)(5),
(6), added; 1.1275–5(c)(1), (5), re-
vised; 1.1275–6, added; debt instru-
ments with original issue discount,
contingent payments, anti-abuse
rule (TD 8674) 28,7
26 CFR 1.166–3T, 1.1001–4T, added;
bad debts modifications and dealer
assignments of notional principal
contracts (TD 8676) 30,4
26 CFR 1.382–5T, –8T, –2T(f)(1)(i)—
(iii) and intermediary sections,
added; 1.382–2, –2T, removed;
consolidated groups, short taxable
years for controlled groups (TD
8679) 31,4
26 CFR 1.1394–0, –1, added; enter-
prise zone facility bonds (TD 8673)
27,4
26 CFR 1.1502–0, –1, –2, –11, –21A,
–22A, –23A, –41A, revised;
1.1502–15, –21, redesignated,
1.1502–21T, –23T, –79A, added;
1.1502–79, amended; consolidated
returns, limitations on the use of
certain losses and deductions (TD
8677) 30,7
26 CFR 1.1502–90T—99T and inter-
mediary sections, added; consoli-
dated groups, net operating loss
carryforwards and built-in losses
and credits following ownership
change, limitations (TD 8678) 31,
11
Returns:
Magnetic media reporting, Forms
1098, 1099, 5498, and W–2G (RP
36) 27,11
44