Internal Revenue Bulletin 2000-32 (PDF rendition): IRS Announcements

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

INCOME TAX
Rev. Rul. 2000–37, page 156.
Mutual life insurance companies; differential earnings
rate.The differential earnings rate for 1999 and the recom-
puted differential earnings rate for 1998 are set forth for
use by mutual life insurance companies to compute their in-
come tax liabilities for 1999.
Rev. Rul. 2000–38, page 157.
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 2000.
T.D. 8892, page 158.
This document removes temporary regulations under sec-
tions 6012, 6061, and 6065 of the Code relating to the
Telefile Voice Signature test.
EMPLOYEE PLANS
T.D. 8891, page 152.
Final regulations under sections 411 and 417 of the Code
relate to the increase from $3,500 to $5,000 of the limit on
distributions from qualified retirement plans that can be
made without participant or spousal consent. These regula-
tions also eliminate the “lookback rule” pursuant to which
certain qualified plan benefits are deemed to exceed this
limit on involuntary distributions.
EXEMPT ORGANIZATIONS
Announcement 2000–67, page 160.
A list is given of organizations now classified as private
foundations.
ADMINISTRATIVE
Announcement 2000–66, page 160.
This document contains corrections to the notice of pro-
posed rulemaking (REG-107644-98, 2000-23 I.R.B. 1229)
relating to the dollar-value LIFO regulations.
Announcement 2000–68, page 161.
This document withdraws the cross-referencing notice of
proposed rulemaking (IA-38-93, 1994-1 C.B. 795) under
sections 6012, 6061, and 6065 of the Code relating to
the Telefile Voice Signature test.
Internal Revenue
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Bulletin No. 2000–32
August 7, 2000
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
Department of the Treasury
Internal Revenue Service
Finding Lists begin on page ii.
Index for July begins on page iv.

August 7, 20002000–32 I.R.B.
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing offi-
cial rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly and may be obtained
from the Superintendent of Documents on a subscription
basis. Bulletin contents are consolidated semiannually into
Cumulative Bulletins, which are sold on a single-copy basis.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of in-
ternal management are not published; however, statements
of internal practices and procedures that affect the rights
and duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service on
the application of the law to the pivotal facts stated in the
revenue ruling. In those based on positions taken in rulings
to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature
are deleted to prevent unwarranted invasions of privacy and
to comply with statutory requirements.
Rulings and procedures reported in the Bulletin do not have
the force and effect of Treasury Department Regulations,
but they may be used as precedents. Unpublished rulings
will not be relied on, used, or cited as precedents by Service
personnel in the disposition of other cases. In applying pub-
lished rulings and procedures, the effect of subsequent leg-
islation, regulations, court decisions, rulings, and proce-
dures must be considered, and Service personnel and oth-
ers concerned are cautioned against reaching the same con-
clusions in other cases unless the facts and circumstances
are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions, and Subpart B, Legislation and Related
Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to
these subjects are contained in the other Parts and Sub-
parts. Also included in this part are Bank Secrecy Act Admin-
istrative Rulings. Bank Secrecy Act Administrative Rulings
are issued by the Department of the Treasury’s Office of the
Assistant Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
The first Bulletin for each month includes a cumulative index
for the matters published during the preceding months.
These monthly indexes are cumulated on a semiannual basis,
and are published in the first Bulletin of the succeeding semi-
annual period, respectively.
The IRS Mission
Provide America’s taxpayers top quality service by help-
ing them understand and meet their tax responsibilities
and by applying the tax law with integrity and fairness to
all.
Introduction
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402.

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2000–32 I.R.B.August 7, 2000

August 7, 20001522000–32 I.R.B.
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 2000. See Rev. Rul. 2000–38, page 157.
Section 280G.—Golden
Parachute Payments
Federal short-term, mid-term, and long-term
rates are set forth for the month of August 2000. See
Rev. Rul. 2000–38, page 157.
Section 382.—Limitation on Net
Operating Loss Carryforwards
and Certain Built-In Losses
Following Ownership Change
The adjusted applicable federal long-term rate is
set forth for the month of August 2000. See Rev.
Rul. 2000–38, page 157.
Section 411.—Minimum Vesting
Standards
26 CFR: 1.411(a)–7: Definitions and special rules.
T.D. 8891
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 31
Increase In Cash-Out Limit
Under Sections 411(a)(7),
411(a)(11), and 417(e)(1) for
Qualified Retirement Plans
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations.
SUMMARY: This document contains
final regulations relating to the increase
from $3,500 to $5,000 of the limit on dis-
tributions from qualified retirement plans
that can be made without participant or
spousal consent. This increase is con-
tained in the Taxpayer Relief Act of 1997.
In addition, these regulations eliminate
the “lookback rule” pursuant to which
certain qualified plan benefits are deemed
to exceed this limit on involuntary distrib-
utions. The final regulations affect spon-
sors and administrators of qualified retire-
ment plans, and participants in those
plans.
DATES: Effective Date: These regula-
tions are effective October 17, 2000.
Applicability Date: These regulations
generally apply to distributions made on
or after October 17, 2000.
FOR FURTHER INFORMATION CON-
TACT: Robert Walsh, (202) 622-6090
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
On December 21, 1998, a notice of pro-
posed rulemaking (REG–113694–98,
1999–7 I.R.B. 56) was published in the
Federal Register(63 F.R. 70356) regard-
ing the “cash-out limit” under sections
411(a)(7), 411(a)(11), and 417(e)(1) of
the Internal Revenue Code. That same
day, temporary and final regulations (T.D.
8794, 1999–7 I.R.B. 4) were published in
the Federal Register(63 F.R. 70335)
which amended the Income Tax Regula-
tions and the Employment Tax Regula-
tions (26 CFR parts 1 and 31) relating to
the increase in the cash-out limit enacted
by section 1071 of the Taxpayer Relief
Act of 1997, Public Law 105-34, 111 Stat.
788 (1997) (TRA ’97). The text of the
temporary regulations served as a portion
of the text of the proposed regulations.
Very few comments were submitted on
the proposed regulations; no hearing was
requested or held. After consideration of
the comments, these final regulations
adopt the provisions of the proposed regu-
lations.
Explanation of Provisions
The temporary regulations made sev-
eral changes to the cash-out rules under
sections 411(a)(7), 411(a)(11), and
417(e)(1). In accordance with section
1071 of TRA ’97, the temporary regula-
tions increased the cash-out limit from
$3,500 to $5,000. Thus, a qualified plan
can generally distribute vested accrued
benefits valued at $5,000 or less without
participant or spousal consent. The tem-
porary regulations also provided that, for
purposes of section 411(a)(7)(B)(i), an in-
voluntary distribution of an employee’s
vested accrued benefit valued at $5,000 or
less could be treated as made due to ter-
mination of the employee’s participation
if the distribution could have been made
at termination of participation but for the
fact that the benefit was then valued at
more than $3,500. Finally, the temporary
regulations amended §1.411(a)–11(c)(3)
to eliminate the “lookback rule” for distri-
butions other than those made pursuant to
an optional form of benefit under which at
least one scheduled periodic distribution
remained payable. Prior to this amend-
ment, the lookback rule in §1.411(a)–
11(c)(3) provided that the present value of
a vested accrued benefit was deemed to
exceed the cash-out limit if it had ex-
ceeded the cash-out limit at the time of
any previous distribution. The temporary
regulations did not change the parallel
lookback rule under §1.417(e)–1(b)(2)(i).
The proposed regulations generally in-
cluded the provisions of the temporary
regulations, but they also proposed the
complete removal (on a prospective basis)
of the lookback rule under both
§§1.411(a)–11(c)(3) and 1.417(e)–
1(b)(2)(i). Thus, under the proposed reg-
ulations, the lookback rule would be elim-
inated both for plans subject to the
spousal-consent provisions of sections
401(a)(11) and 417 and for plans not sub-
ject to those provisions. Under this re-
moval of the lookback rule, a participant’s
vested accrued benefit valued at $5,000 or
less could be distributed without consent
even if the benefit had been valued at
more than $5,000 at the time of a previous
distribution. However, in accordance
with section 417(e)(1), the proposed regu-
lations also provided that, in the case of
plans subject to sections 401(a)(11) and
417, consent would be required after the
annuity starting date for the immediate
distribution of the present value of an ac-
crued benefit being distributed in any
form, including a qualified joint and sur-
vivor annuity or a qualified preretirement
survivor annuity, regardless of the amount
of that present value.
Very few comments were received on
the proposed regulations. One commen-
tator inquired whether a cash-out could be
made of a benefit presently valued at
$4,500 that had been valued at $4,000
Part I. Rulings and Decisions Under the Internal Revenue Code of 1986

2000–32 I.R.B.153August 7, 2000
upon termination of the employee’s em-
ployment more than two years earlier. As
indicated in the preamble to the final and
temporary regulations published with the
proposed regulations, that benefit could
be cashed out.
Another commentator indicated sup-
port for the content of the proposed regu-
lations but expressed concern about the
rule, derived from section 417(e)(1), pro-
hibiting a cashout after the annuity start-
ing date of a benefit being distributed in
any form by a plan subject to sections
401(a)(11) and 417. The commentator
observed that, under section 417(f)(2)(A),
the annuity starting date for a benefit
payable upon termination of employment
in non-annuity form could be the date of
termination. The commentator argued
that the rule in the proposed regulations
prohibiting a cashout after the annuity
starting date could be read to preclude a
cashout of a non-annuity benefit payable
at termination, regardless of the present
value of that benefit. To address this, the
commentator urged the IRS and Treasury
to redefine “annuity starting date” such
that a cashout would be permitted as long
as a benefit remains immediately distrib-
utable (that is, until the later of normal re-
tirement age or age 62).
The provision in the proposed regula-
tions prohibits a cashout after the annuity
starting date of a benefit “being distrib-
uted in any form.” The rule does not
apply to any benefit that is not yet “being
distributed” — that is, to any benefit with
respect to which no payment has been
made. If the present value of a benefit
payable on or after termination of em-
ployment does not exceed the cashout
limit, the rule of section 417(e)(1), as set
forth in the proposed regulations, would
not prohibit a cashout prior to the date on
which a payment is first made (disregard-
ing, obviously, the cashout payment it-
self). Thus, no change has been made to
the regulations on this point.
Another commentator objected to the
complete elimination of the lookback rule
under the proposed regulations. The com-
mentator cited three reasons for its opposi-
tion: first, that an amount distributed in a
hardship or other type of distribution re-
mains part of a participant’s benefit; sec-
ond, that a participant could manipulate a
distribution in order to evade the spousal-
consent requirements; and, third, that per-
mitting cash-outs after a hardship or other
distribution is contrary to the policy of dis-
couraging non-retirement distributions.
In contrast, a comment received prior
to the issuance of the proposed regula-
tions noted problems faced by plan ad-
ministrators due to the lookback rule.
The commentator noted, for example, that
if a plan provides for hardship distribu-
tions, the plan administrator must review
its records to determine the value of the
participant’s benefits at the time of any
prior distribution. The commentator
added that this can be particularly diffi-
cult and costly where plans sponsored by
other employers have merged into the
plan. The commentator further stated that
the cash-out provisions are designed to
allow plans to reduce their administrative
costs by making lump sum payments to
participants with small benefits and that
the lookback rule is contrary to that de-
sign because the rule (1) makes it more
costly for administrators to determine
whether the provisions apply and (2) can
prevent a plan from relying on the provi-
sions in many cases where the value of
the participant’s current benefit is well
below $5,000.
After consideration of the comments,
the IRS and Treasury have decided to
adopt the regulation eliminating the look-
back rule as proposed. The IRS and Trea-
sury believe that the statutory cash-out
provisions represent a balancing of the in-
terests of participants in maintaining their
benefits in qualified plans with the rea-
sonable administrative needs of plan
sponsors and administrators. The look-
back rule prevents plans from cashing out
a benefit currently valued below the cash-
out limit simply because it had been val-
ued above the cash-out limit at the time of
an earlier distribution. This creates dis-
parity in the treatment of benefits of
equivalent value and requires plans to
incur additional recordkeeping and other
administrative costs.
The IRS and Treasury note that removal
of the lookback rule is unlikely to present
significant opportunities for participants to
evade the spousal-consent rules. In the
case of any plan subject to the spousal-
consent provisions of sections 401(a)(11)
and 417, a distribution that draws a partic-
ipant’s accrued benefit from a value above
the cash-out limit to a value at or below
the cash-out limit will itself require
spousal consent. Furthermore, these final
regulations strengthen the spousal-consent
rules by clarifying that a plan subject to
sections 401(a)(11) and 417 may not dis-
tribute a benefit after the annuity starting
date without consent. This prohibition on
cash-outs after the annuity starting date,
which is statutory in source, applies with-
out regard to the value of the benefit at the
annuity starting date and without regard to
the distribution form.
Finally, the IRS and Treasury note that
concerns about non-retirement distribu-
tions of benefits are mitigated by the
availability of rollovers. In almost all
cases, an amount distributed from a quali-
fied plan in a cash-out distribution will be
an eligible rollover distribution that can
be paid directly (or indirectly, through a
60-day rollover) to another qualified re-
tirement plan or individual retirement
arrangement.
Special Analyses
It has been determined that this Trea-
sury decision is not a significant regula-
tory action as defined in Executive Order
12866. Therefore, a regulatory assess-
ment is not required. It also has been de-
termined that section 553(b) of the Ad-
ministrative Procedure Act (5 U.S.C.
chapter 5) does not apply to these regula-
tions, and because the regulation does not
impose a collection of information on
small entities, the Regulatory Flexibility
Act (5 U.S.C. chapter 6) does not apply.
Pursuant to section 7805(f) of the Internal
Revenue Code, the notice of proposed
rulemaking preceding these regulations
was submitted to the Small Business Ad-
ministration for comment on its impact on
small business.
Drafting Information
The principal author of these regula-
tions is Robert M. Walsh, Office of the
Associate Chief Counsel (Employee Ben-
efits and Exempt Organizations). How-
ever, other personnel from the IRS and
Treasury Department participated in their
development.
* * * * *
Adoption of Amendments to the
Regulations
Accordingly, 26 CFR parts 1 and 31 are
amended as follows:

PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 is amended by removing the entry
for §1.411(a)–7T and by adding a new
entry in numerical order to read in part as
follows:
Authority: 26 U.S.C. 7805 * * *
§1.411(a)–7 also issued under 26 U.S.C.
411(a)(7)(B)(i). * * *
Par. 2. Section 1.411(a)–7 is amended
as follows:
1. Paragraph (d)(4)(i) is revised;
2. Paragraphs (d)(4)(vi) and (d)(4)(vii)
are added.
The revision and additions read as fol-
lows:
§1.411(a)–7 Definitions and special rules.
* * * * *
(d) * * *
(4) Certain cash-outs of accrued bene-
fits—(i) Involuntary cash-outs. For pur-
poses of determining an employee’s right
to an accrued benefit derived from em-
ployer contributions under a plan, the
plan may disregard service performed by
the employee with respect to which—
(A) The employee receives a distribu-
tion of the present value of his entire non-
forfeitable benefit at the time of the distri-
bution;
(B) The requirements of section
411(a)(11) are satisfied at the time of the
distribution;
(C) The distribution is made due to the
termination of the employee’s participa-
tion in the plan; and
(D) The plan has a repayment provision
which satisfies the requirements of para-
graph (d)(4)(iv) of this section in effect at
the time of the distribution.
* * * * *
(vi) For purposes of paragraph (d)(4)(i)
of this section, a distribution shall be
deemed to be made due to the termination
of an employee’s participation in the plan
if it is made no later than the close of the
second plan year following the plan year
in which such termination occurs, or if
such distribution would have been made
under the plan by the close of such second
plan year but for the fact that the present
value of the nonforfeitable accrued bene-
fit then exceeded the cash-out limit in ef-
fect under §1.411(a)–11(c)(3)(ii). For
purposes of determining the entire non-
forfeitable benefit, the plan may disregard
service after the distribution, as illustrated
in paragraph (d)(2)(i) of this section.
(vii) Effective date. Paragraphs
(d)(4)(i) and (vi) of this section apply to
distributions made on or after March 22,
1999. However, an employer is permit-
ted to apply paragraphs (d)(4)(i) and (vi)
of this section to plan years beginning on
or after August 6, 1997. Otherwise, for
distributions prior to March 22, 1999,
§§1.411(a)–7 and 1.411(a)–7T, in effect
prior to October 17, 2000 (as contained in
26 CFR part 1, revised as of April 1,
2000) apply.
* * * * *
§1.411(a)–7T [Removed]
Par. 3. Section 1.411(a)–7T is re-
moved.
Par. 4. Section 1.411(a)–11 is amended
by revising paragraph (c)(3) to read as
follows:
§1.411(a)–11 Restriction and valuation
of distributions.
* * * * *
(c) * * *
(3) Cash-out limit. (i) Written consent
of the participant is required before the
commencement of the distribution of any
portion of an accrued benefit if the pre-
sent value of the nonforfeitable total ac-
crued benefit is greater than the cash-out
limit in effect under paragraph (c)(3)(ii)
of this section on the date the distribution
commences. The consent requirements
are deemed satisfied if such value does
not exceed the cash-out limit, and the plan
may distribute such portion to the partici-
pant as a single sum. Present value for
this purpose must be determined in the
same manner as under section 417(e); see
§1.417(e)–1(d).
(ii) The cash-out limit in effect for a
date is the amount described in section
411(a)(11)(A) for the plan year that in-
cludes that date. The cash-out limit in ef-
fect for dates in plan years beginning on
or after August 6, 1997, is $5,000. The
cash-out limit in effect for dates in plan
years beginning before August 6, 1997, is
$3,500.
(iii) Effective date. Paragraphs (c)(3)(i)
and (ii) of this section apply to distribu-
tions made on or after October 17, 2000.
However, an employer is permitted to
apply the $5,000 cash-out limit described
in paragraph (c)(3)(ii) of this section to
plan years beginning on or after August 6,
1997. Otherwise, for distributions prior
to October 17, 2000, §1.411(a)–11 and
1.411(a)–11T in effect prior to October
17, 2000 (as contained in 26 CFR Part 1
revised as of April 1, 2000) apply.
* * * * *
§1.411(a)–11T [Removed]
Par. 5. Section 1.411(a)–11T is re-
moved.
Par. 6. Section 1.417(e)–1 is amended
by revising the last sentence of paragraph
(b)(2)(i) and by adding new paragraph
(b)(2)(iii) to read as follows:
§1.417(e)–1 Restrictions and valuations
of distributions from plans subject to sec-
tions 401(a)(11) and 417.
* * * * *
(b) * * *
(2) * * * (i) * * * After the annuity
starting date, consent is required for the
immediate distribution of the present
value of the accrued benefit being distrib-
uted in any form, including a qualified
joint and survivor annuity or a qualified
preretirement survivor annuity, regardless
of the amount of such present value.
* * * * *
(iii) Paragraph (b)(2)(i) of this section
applies to distributions made on or after
October 17, 2000. For distributions prior
to October 17, 2000, §1.417(e)–1(b)(2)(i)
in effect prior to October 17, 2000 (as
contained in 26 CFR part 1 revised as of
April 1, 2000) applies.
* * * * *
PARTS 1 AND 31—[AMENDED]
Par. 7. In the table below, for each sec-
tion indicated in the left column, remove
the language in the middle column and
add the language in the right column:
August 7, 20001542000–32 I.R.B.

2000–32 I.R.B.155August 7, 2000
SectionRemoveAdd
1.401(a)–20, Q&A-8,§1.411(a)–11T(c)(3)(ii)§1.411(a)–11(c)(3)(ii)
paragraph (d), first sentence
1.401(a)–20, Q&A-24,§1.411(a)–11T(c)(3)(ii)§1.411(a)–11(c)(3)(ii)
paragraph (a)(1), fourth
sentence
1.401(a)(4)–4, paragraph§1.411(a)–11T(c)(3)(ii)§1.411(a)–11(c)(3)(ii)
(b)(2)(ii)(C)
1.401(a)(26)–4, paragraph§1.411(a)–11T(c)(3)(ii)§1.411(a)–11(c)(3)(ii)
(d)(2), last sentence
1.401(a)(26)–6, paragraph§1.411(a)–11T(c)(3)(ii)§1.411(a)–11(c)(3)(ii)
(c)(4), first sentence
1.411(a)–11, paragraph (b),§1.411(a)–11T(c)(3)(ii)paragraph (c)(3)(ii) of this
first sentencesection
1.411(a)–11, paragraph§1.411(a)–11T(c)(3)(ii)paragraph (c)(3)(ii) of this
(c)(7), third sentencesection
1.411(d)–4, Q&A-2, §1.411(a)–11T(c)(3)(ii)§1.411(a)–11(c)(3)(ii)
paragraph (b)(2)(v), second,
third, and fourth sentences
1.411(d)–4, Q&A-4,§1.411(a)–11T(c)(3)(ii)§1.411(a)–11(c)(3)(ii)
paragraph (a), eighth
sentence
1.417(e)–1, paragraph (b)(2)(i)§1.411(a)–11T(c)(3)(ii)§1.411(a)–11(c)(3)(ii)
first, fourth, and fifth
sentences
31.3121(b)(7)–2, paragraph§1.411(a)–11T(c)(3)(ii)§1.411(a)–11(c)(3)(ii)
(d)(2)(i), last sentence
Robert E. Wenzel,
Deputy Commissioner
of Internal Revenue.
Approved July 10, 2000.
Jonathan Talisman,
Deputy Assistant Secretary
of the Treasury (Tax Policy).
(Filed by the Office of the Federal Register on July
18, 2000, 8:45 a.m., and published in the issue of the
Federal Register for July 19, 2000, 65 F.R. 44679)
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 2000. See Rev. Rul. 2000–38, page 157.
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 2000. See Rev. Rul. 2000–38, page 157.
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 2000. See Rev. Rul. 2000–38, page 157.
Section 482.—Allocation of
Income and Deductions Among
Taxpayers
Federal short-term, mid-term, and long-term
rates are set forth for the month of August 2000. See
Rev. Rul. 2000–38, page 157.
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 2000. See Rev. Rul. 2000–38, page 157.
Section 642.—Special Rules for
Credits and Deductions
Federal short-term, mid-term, and long-term
rates are set forth for the month of August 2000. See
Rev. Rul. 2000–38, page 157.
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 2000. See Rev. Rul. 2000–38, page 157.
Section 809.—Reduction in
Certain Deductions of Mutual
Life Insurance Companies
26 CFR 1.809–9: Computation of the differential
earnings rate and the recomputed differential
earnings rate.

Mutual life insurance companies;
differential earnings rate. The differen-
tial earnings rate for 1999 and the recom-
puted differential earnings rate for 1998
are set forth for use by mutual life insur-
ance companies to compute their income
tax liabilities for 1999.
Rev. Rul. 2000–37
This revenue ruling contains the differ-
ential earnings rate for 1999 and the re-
computed differential earnings rate for
1998. Under § 809 of the Internal Rev-
enue Code, mutual life insurance compa-
nies use these rates in computing their
Federal income tax liability for taxable
years beginning in 1999. This revenue
ruling also contains the figures on which
the determinations of these rates are
based. Notice 2000–16, 2000–12 I.R.B.
826, contained tentative determinations of
these rates.
Section 809(a) provides that, in the
case of any mutual life insurance com-
pany, the amount of the deduction allow-
able under § 808 for policyholder divi-
dends is reduced (but not below zero) by
the “differential earnings amount.” Any
excess of the differential earnings amount
over the amount of the deduction allow-
able under § 808 is taken into account as a
reduction in the closing balance of
reserves under subsections (a) and (b) of
§ 807. The “differential earnings
amount” for any taxable year is the
amount equal to the product of (a) the life
insurance company’s average equity base
for the taxable year multiplied by (b) the
“differential earnings rate” for that tax-
able year. The “differential earnings rate”
for the taxable year is the excess of (a) the
“imputed earnings rate” for the taxable
year over (b) the “average mutual earn-
ings rate” for the second calendar year
preceding the calendar year in which the
taxable year begins. The “imputed earn-
ings rate” for any taxable year is the
amount that bears the same ratio to 16.5
percent as the “current stock earnings
rate” for the taxable year bears to the
“base period stock earnings rate.”
Section 809(f) provides that, in the case
of any mutual life insurance company, if
the “recomputed differential earnings
amount” for any taxable year exceeds the
differential earnings amount for that tax-
able year, the excess is included in life in-
surance gross income for the succeeding
taxable year. If the differential earnings
amount for any taxable year exceeds the
recomputed differential earnings amount
for that taxable year, the excess is allowed
as a life insurance deduction for the suc-
ceeding taxable year. The “recomputed
differential earnings amount” for any tax-
able year is an amount calculated in the
same manner as the differential earnings
amount for that taxable year, except that
the average mutual earnings rate for the
calendar year in which the taxable year
begins is substituted for the average mu-
tual earnings rate for the second calendar
year preceding the calendar year in which
the taxable year begins.
The stock earnings rates and mutual
earnings rates taken into account under
§ 809 generally are determined by divid-
ing statement gain from operations by the
average equity base. For this purpose, the
term “statement gain from operations”
means “the net gain or loss from opera-
tions required to be set forth in the annual
statement, determined without regard to
Federal income taxes, and ... properly ad-
justed for realized capital gains and
losses....” See§ 809(g)(1). The term “eq-
uity base” is defined as an amount deter-
mined in the manner prescribed by regu-
lations equal to surplus and capital
increased by the amount of nonadmitted
financial assets, the excess of the amount
of statutory reserves over the amount of
tax reserves, the sum of certain other re-
serves, and 50 percent of any policy-
holder dividends (or other similar liabil-
ity) payable in the following taxable year.
See§ 809(b)(2), (3), (4), (5) and (6). Sec-
tion 1.809–10 of the Income Tax Regula-
tions provides that the equity base in-
cludes both the asset valuation reserve
and the interest maintenance reserve for
taxable years ending after December 31,
1991.
Section 1.809–9(a) of the regulations
provides that neither the differential earn-
ings rate under § 809(c) nor the recom-
puted differential earnings rate that is
used in computing the recomputed differ-
ential earnings amount under § 809(f)(3)
may be less than zero.
Rev. Rul. 99–3, 1999–3 I.R.B. 4, pro-
vides that a life insurance subsidiary of a
mutual holding company is not a mutual
life insurance company for which the de-
duction for policyholder dividends is re-
duced pursuant to §§ 808(c)(2) and 809.
For purposes of § 809, the differential
earnings rate for 1999 and the rate used to
calculate the recomputed differential
earnings amount for 1998 (the recom-
puted differential earnings rate for 1998),
and the figures on which these two rates
are based are set forth in Table 1.
August 7, 20001562000–32 I.R.B.
Rev. Rul. 2000–37 Table 1
Determination of Rates To Be Used For Taxable Years
Beginning in 1999
Differential earnings rate for 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .0.249
Recomputed differential earnings rate for 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .0.182
Imputed earnings rate for 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.193
Imputed earnings rate for 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.815
Base period stock earnings rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.221
Current stock earnings rate for 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.465
Stock earnings rate for 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.238
Stock earnings rate for 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.321
Stock earnings rate for 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.836
Average mutual earnings rate for 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.566
Average mutual earnings rate for 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.011

2000–32 I.R.B.157August 7, 2000
DRAFTING INFORMATION
The principal author of this revenue rul-
ing is Katherine A. Hossofsky of the Of-
fice of the Associate Chief Counsel (Fi-
nancial Institutions and Products). For
further information regarding this revenue
ruling contact Ms. Hossofsky on (202)
622-3477 (not a toll-free number).
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 2000. See Rev. Rul. 2000–38, 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, 642, 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 2000.
Rev. Rul. 2000–38
This revenue ruling provides various
prescribed rates for federal income tax pur-
poses for August 2000 (the current month.)
Table 1 contains the short-term, mid-term,
and long-term applicable federal 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 applica-
ble federal rates (adjusted AFR) for the cur-
rent 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 con-
tains the appropriate percentages for deter-
mining the low-income housing credit de-
scribed 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.
REV. RUL. 2000–38 TABLE 1
Applicable Federal Rates (AFR) for August 2000
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-Term
AFR6.37%6.27%6.22%6.19%
110%AFR7.02%6.90%6.84%6.80%
120%AFR7.66%7.52%7.45%7.40%
130%AFR8.32%8.15%8.07%8.01%
Mid-Term
AFR6.33%6.23%6.18%6.15%
110%AFR6.97%6.85%6.79%6.75%
120%AFR7.62%7.48%7.41%7.37%
130%AFR8.26%8.10%8.02%7.97%
150%AFR9.57%9.35%9.24%9.17%
175%AFR11.20%10.90%10.76%10.66%
Long-Term
AFR6.22%6.13%6.08%6.05%
110%AFR6.85%6.74%6.68%6.65%
120%AFR7.50%7.36%7.29%7.25%
130%AFR8.13%7.97%7.89%7.84%

REV. RUL. 2000–38 TABLE 5
Rate Under Section 7520 for August 2000
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 interest7.6%
August 7, 20001582000–32 I.R.B.
REV. RUL. 2000–38 TABLE 2
Adjusted AFR for August 2000
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term
adjusted AFR4.63%4.58%4.55%4.54%
Mid-term
adjusted AFR4.84%4.78%4.75%4.73%
Long-term
adjusted AFR5.53%5.46%5.42%5.40%
REV. RUL. 2000–38 TABLE 3
Rates Under Section 382 for August 2000
Adjusted federal long-term rate for the current month5.53%
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.)5.79%
REV. RUL. 2000–38 TABLE 4
Appropriate Percentages Under Section 42(b)(2)
for August 2000
Appropriate percentage for the 70% present value low-income housing credit8.47%
Appropriate percentage for the 30% present value low-income housing credit3.63%
Section 1288.—Treatment of
Original Issue Discounts on Tax-
Exempt Obligations
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of August 2000. See Rev. Rul. 2000–38, page 157.
Section 6061.—Signing of
Returns and Other Documents
26 CFR1.6061–2T: Signing of returns by voice
signature (temporary).
T.D. 8892
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 602
TeleFile Voice Signature Test
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Removal of temporary regula-
tions.
SUMMARY: This document removes
temporary regulations that provide that an
individual Federal income tax return com-
pleted as part of the Telefile Voice Signa-
ture test will be treated as a return that is
signed, authenticated, verified and filed
by the taxpayer as required by the Internal
Revenue Code. The temporary regula-
tions were published in the Federal Regis-
ter on December 27, 1993. Because the
temporary regulations applied only to
1992 and 1993 calendar year returns, the
IRS is removing them.
EFFECTIVE DATE: These regulations
are effective July 18, 2000.
FOR FURTHER INFORMATION CON-
TACT: Beverly A. Baughman (202) 622-
4940 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
On December 27, 1993, the IRS issued
temporary regulations (T.D. 8510, 1994–1
C.B. 280) in the Federal Register (58 F.R.
68295) under sections 6012, 6061, and
6065 relating to the TeleFile Voice Signa-
ture test. Because the temporary regula-
tions applied only to 1992 and 1993 cal-
endar year returns, the IRS has decided to
remove them. Therefore, temporary regu-
lations §§1.6012–7T, 1.6061–2T, and
1.6065–2T are being removed.

2000–32 I.R.B.159August 7, 2000
On December 27, 1993, the IRS also is-
sued a notice of proposed rulemaking
(IA–38–93, 1994–1 C.B. 795 [58 F.R.
68335]) under sections 6012, 6061, and
6065. Although written comments and re-
quests for a public hearing were solicited,
no written or oral comments were received
and no public hearing was requested or
held. This notice of proposed rulemaking
is being withdrawn in a separate document,
Announcement 2000–68 on page 161.
Explanation of provisions
Under sections 6012, 6061, and 6065
of the Internal Revenue Code, each indi-
vidual with gross income in excess of a
specified amount must file an annual in-
come tax return that (i) is signed in accor-
dance with prescribed forms and instruc-
tions and, (ii) except as otherwise
provided by the Service, contains (or is
verified by) a written declaration that the
return is made under penalties of perjury.
The temporary regulations provide
rules to facilitate the implementation of
the Telefile Voice Signature test. Gener-
ally, pursuant to the temporary regula-
tions a taxpayer’s individual income tax
return will be treated as having been prop-
erly filed if the taxpayer is eligible to par-
ticipate in the Telefile Voice Signature test
and, pursuant to the instructions from the
Telefile system interactive voice com-
puter, provides the requested information
and the voice signature during the tele-
phonic filing season.
The Telefile Voice Signature test oc-
curred during the 1993 and 1994 filing
seasons. Since that time, the Service has
published final regulations generally au-
thorizing alternative signature methods.
See §301.6061–1. Accordingly, the regu-
lations relating to the Telefile Voice Sig-
nature test are being removed.
Drafting Information
The principal author of these regula-
tions is Beverly A. Baughman of the Of-
fice of Assistant Chief Counsel (Income
Tax and Accounting), IRS. However, per-
sonnel from other offices of the Internal
Revenue Service and Treasury Depart-
ment participated in their development.
* * * * *
Removal of Temporary Regulations
PART 1-INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
§1.6012–7T [Removed]
Par. 2. Section 1.6012–7T is removed.
§1.6061–2T [Removed]
Par. 3. Section 1.6061–2T is removed.
§1.6065–2T [Removed]
Par. 4. Section 1.6065–2T is removed.
PART 602—OMB CONTROL
NUMBERS UNDER THE
PAPERWORK REDUCTION ACT
Par. 5. The authority citation for part
602 continues to read as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 6. Section 602.101(c) is amended
by removing the following entries in the
table:
§602.101 OMB Control numbers.
* * * * *
(c)* * *
CFR part or section whereCurrent OMB
identified and describedcontrol number
* * * * *
1.6012–7T . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1545-1348
1.6061–2T . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1545-1348
* * * * *
Robert E. Wenzel,
Deputy Commissioner of
Internal Revenue.
Approved June 30, 2000.
Jonathan Talisman,
Assistant Secretary of
the Treasury .
(Filed by the Office of Federal Register on July 17,
2000, 8:45 a.m., and published in the issue of the
Federal Register for July 18, 2000, 65 F.R. 44437)
Section 7520.—Valuation Tables
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of August 2000. See Rev. Rul. 2000–38, page 157.
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 2000. See Rev. Rul. 2000–38, page 157.

Dollar-Value LIFO Regulations;
Inventory Price Index
Computation Method;
Correction
Announcement 2000–66
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Correction to notice of pro-
posed rulemaking.
SUMMARY: This document contains
corrections to a notice of proposed rule-
making (REG–107644–98, 2000–23
I.R.B. 1229) which was published in the
Federal Register on May 19, 2000 (65
F.R. 31841) relating to the dollar-value
LIFO regulations.
FOR FURTHER INFORMATION CON-
TACT: Jeffery G. Mitchell at (202) 622-
4970 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The proposed regulations that are the
subject of these corrections are under sec-
tion 472 of the Internal Revenue Code.
Need for Correction
As published, this notice of proposed
rulemaking contains errors that may
prove to be misleading and are in need of
clarification.
Correction of Publication
Accordingly, the publication of the no-
tice of proposed rulemaking (REG–
107644–98), which was subject to FR.
Doc. 00–12174, is corrected as follows:
1. On page 31844, column 1, in the pre-
amble under the paragraph heading “New
Base Year for IPIC Method Changes”, line
1, the language “Section 1.472–8(e)(vi)
requires a” is corrected to read “Section
1.472–8(e)(3)(vi) requires a”.
2. On page 31849, column 1, §1.472–8
(e)(3)(iii)(F), paragraph (xii) of Example
1., line 2, in the paragraph heading, the
language “the 1997 taxable year. R com-
putes the” is corrected to read “the 1998
taxable year. R computes the”.
3. On page 31849, column 2, §1.472–8
(e)(3)(iii)(F), paragraph (xiii) of Example
1., fourth line from the bottom of para-
graph, the language “inventory at the end
of the 1997 taxable year” is corrected to
read “inventory at the end of the 1998 tax-
able year”.
4. On page 31850, column 1, §1.472–8
(e)(3)(iii)(F), paragraph (vi) of Example
2., line 2, in the paragraph heading, the
language “the 1997 taxable year. R com-
putes the” is corrected to read “the 1998
taxable year.R computes the”.
5. On page 31850, column 2, §1.472–8
(e)(3)(iv)(A), second line from the bottom
of column, the language “election of an
appropriate representative” is corrected to
read “election of a representative appro-
priate”.
6. On page 31852, column 1, §1.472–8
(e)(3)(iv)(C)(2)(ii), paragraph (ii) of Exam-
ple., sixth line from the bottom of the para-
graph, the language “($241,980.60 *
1.438793), Finally, the” is corrected to read
“($124,180.60 * 1.438793). Finally, the”.
7. On page 31852, column 1, §1.472–8
(e)(3)(iv)(C)(2)(ii), paragraph (ii) of Ex-
ample., fourth line from the bottom of the
paragraph, the language “sold and in-
creases Y’s gross income for the” is cor-
rected to read “sold and increase Y’s
gross income for the”.
Cynthia E. Grigsby,
Chief, Regulations Unit,
Office of Special Counsel
(Modernization and Strategic Planning).
(Filed by the Office of Federal Register on July 18,
2000, 8:45 a.m., and published in the issue of the
Federal Register for July 19, 2000, 65 F.R. 44709)
Foundations Status of Certain
Organizations
Announcement 2000–67
The following organizations have
failed to establish or have been unable to
maintain their status as public charities or
as operating foundations. Accordingly,
grantors and contributors may not, after
this date, rely on previous rulings or des-
ignations in the Cumulative List of Orga-
nizations (Publication 78), or on the pre-
sumption arising from the filing of notices
under section 508(b) of the Code. This
listing does notindicate that the organiza-
tions have lost their status as organiza-
tions described in section 501(c)(3), eligi-
ble to receive deductible contributions.
Former Public Charities.The following
organizations (which have been treated as
organizations that are not private founda-
tions described in section 509(a) of the
Code) are now classified as private foun-
dations:
Alms for the Poor Corporation,
Naples, FL
American Freedom Housing,
Clearwater, FL
Americas Toys of the World Museum,
Pawtucket, RI
Associated Builders & Contractors
Western Oklahoma Inc., Training
Fund, Oklahoma City, OK
M.L. Carr Foundation, Inc., Peabody, MA
Center for the Study of the Person & the
Advancement of Human Rights,
San Diego, CA
Chicago Philharmonic Orchestra,
Chicago, IL
Children’s Community Corner,
Cleveland, OH
Choices Community Childcare Resource,
Orlando, FL
Choices Unlimited, Inglewood, CA
Citizens Landmark Preservation,
Chicago, IL
Cleburne County Schools Foundation,
Heflin, AL
Cloverwood Development Corporation,
Rochester, NY
Community Education Services, Inc.,
Greentown, IN
Contra Costa Boys Development Center,
Pittsburg, CA
Creative Assistance Development, Inc.,
Elgin, IL
DCL Foundation, Inc., Del City, OK
De Best Shared Housing, Inc.,
Baltimore, MD
James C. Dezendorf Charitable Trust,
Portland, OR
Elk Valley Band, Estill Springs, TN
Families in Crisis, Auburn, WA
Foundation for the Residents of Sturgis,
Inc., Sturgis, SD
Friends of the Holy Cross, Staunton, VA
Frio Healthcare Foundation, Pearsall, TX
Greater Nebraska City Medical Care
Foundation, Nebraska City, NE
Harlem Volunteer Ambulance Corps,
Inc., New York, NY
August 7, 20001602000–32 I.R.B.
Part IV. Items of General Interest

2000–32 I.R.B.161August 7, 2000
Hmong-American Museum for the
Future, Inc., Wausau, WI
Olive D. Hoffman Memorial, Inc.,
Great Falls, VA
Institute for Hindu Studies, Edmond, OK
International Cinema Museum,
Glenview, IL
International Soccer Club, Incorporated,
Hampton, VA
J&W Adult Care, Inc., Los Angeles, CA
Job Outreach for Youth, Chicago, IL
Just-Cause Volunteer Services, Inc.,
New York, NY
Lend-A-Hand Society, Inc., Fort Lee, NJ
Les Grands Ballets De Loony, Inc.,
New York, NY
Les Paul Foundation, New York, NY
Lifestream Foundation, St. Paul, MN
Los Ayudantes de Naranja,
Newport Beach, CA
Medical Media, Orem, UT
Middlesex County Bar Foundation, Inc.,
Cambridge, MA
MTOTO, Inc., Brookpart, IL
Nicos Playhouse II, Chicago, IL
Northern Manhattan Legal Services
Corporation, New York, NY
Oak Center Neighborhood Association,
Oakland, CA
Owens-Jones Academy for Enrichments,
Inc., Atlanta, GA
Pejepscot Terrace Corporation,
Brunswick, ME
Physicians for Prevention, Inc.,
Jackonsville, FL
Plaza Community Playground, Inc.,
Baldwin, NY
Prairie Center for Environmental
Learning and Living CELL, Inc.,
Hastings, NE
REACH Responsible Enough to Achieve
Career Heights, Inc., Fayetteville, GA
Reginald L. Blair Memorial Fund,
Sharon, VT
Regional AIDS Interfaith Network of
Western New York, Buffalo, NY
Regional Economic and Civic Team,
Farmington, MO
Sailboat Bend Historical Trust, Inc., Fort
Lauderdale, FL
Samuel and Lydia Clark Foundation, Inc.,
Syracuse, NY
Science of Laws Institute, Poway, CA
Soul Unlimited Outreach Ministries,
Silvus, IL
Sound In Spirit Broadcasting, Inc.,
Oskaloosa, IA
Southeastern Queens Youth Alternative,
Inc., St. Albans, NY
Strategies to Independence, Inc.,
N. Attleboro, MA
Tampa Bay Inner City Youth Tennis
Academy, Inc., St. Petersburg, FL
Texas Saltwater Association,
Houston, TX
Three in One Group Home, Inc.,
Oakland, CA
Tribute 21 Foundation, Inc.,
New York, NY
True Deliverance Worldwide Ministries,
Inc., Little Rock, AR
Tulsa Firefighters Educational Clowns,
Inc., Tulsa, OK
Two Cities, St. Paul, MN
USA Television Corporation,
LaPlace, LA
Vietnam Veterans of America, Ohio State
Council, Inc., Columbus, OH
Village Voice Obies Foundation, Inc.,
New York, NY
West Virginia Local Health, Incorporated,
Wellsburg, WV
Tim Wynacht Ministries, Lakeport, CA
World Pal, White Plains, NY
If an organization listed above submits
information that warrants the renewal of
its classification as a public charity or as a
private operating foundation, the Internal
Revenue Service will issue a ruling or de-
termination letter with the revised classi-
fication as to foundation status. Grantors
and contributors may thereafter rely upon
such ruling or determination letter as pro-
vided in section 1.509(a)–7 of the Income
Tax Regulations. It is not the practice of
the Service to announce such revised clas-
sification of foundation status in the Inter-
nal Revenue Bulletin.
TeleFile Voice Signature Test
Announcement 2000–68
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Withdrawal of cross-referenc-
ing notice of proposed rulemaking.
SUMMARY: This document withdraws
the notice of proposed rulemaking relating
to the Telefile Voice Signature test that was
published in the Federal Registeron De-
cember 27, 1993. The notice of proposed
rulemaking cross-referenced temporary
regulations published on the same day that
provided that an individual federal income
tax return completed as part of the Telefile
Voice Signature test would be treated as a
return that is signed, authenticated, verified
and filed by the taxpayer as required by the
Internal Revenue Code.
EFFECTIVE DATE: These regulations
are effective July 18, 2000.
FOR FURTHER INFORMATION CON-
TACT: Beverly A. Baughman (202) 622-
4940 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
On December 27, 1993, the IRS issued
proposed regulations (REG–209640–93) in
the Federal Register(IA–38–93, 1994–1
C.B. 795 [58 F.R. 68335]) under sections
6012, 6061, and 6065 relating to the Tele-
File Voice Signature test. The notice of
proposed rulemaking cross-referenced tem-
porary regulations (T.D. 8510, 1994–1 C.B.
280) published in the Federal Registerfor
the same day (58 F.R. 68295). Although
written comments and requests for a public
hearing were solicited, no written or oral
comments were received and no public
hearing was requested or held. Because the
applicable temporary regulations apply
only to 1992 and 1993 calendar year re-
turns, the IRS has decided not to finalize
those regulations and, thus, is withdrawing
the proposed regulations.
* * * * *
Withdrawal of Notice of Proposed
Rulemaking
Accordingly, under the authority of 26
U.S.C. 7805, the notice of proposed rule-
making that was published in the Federal
Registeron December 27, 1993, (58 F.R.
68335) is withdrawn.
Robert E. Wenzel,
Deputy Commissioner of
Internal Revenue.
(Filed by the Office of the Federal Register on July
17, 2000, 8:45 a.m., and published in the issue of the
Federal Register for July 18, 2000, 65 F.R. 44491)

August 7, 2000i2000–32 I.R.B.
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplified describes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus,
if an earlier ruling held that a principle
applied to A, and the new ruling holds
that the same principle also applies to B,
the earlier ruling is amplified. (Compare
with modified, below).
Clarified is used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously
published ruling and points out an essen-
tial difference between them.
Modified is used where the substance
of a previously published position is
being changed. Thus, if a prior ruling
held that a principle applied to A but not
to B, and the new ruling holds that it ap-
plies to both A and B, the prior ruling is
modified because it corrects a published
position. (Compare with amplified and
clarified, above).
Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used
in a ruling that lists previously published
rulings that are obsoleted because of
changes in law or regulations. A ruling
may also be obsoleted because the sub-
stance has been included in regulations
subsequently adopted.
Revoked describes situations where the
position in the previously published rul-
ing is not correct and the correct position
is being stated in the new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a pe-
riod of time in separate rulings. If the
new ruling does more than restate the
substance of a prior ruling, a combination
of terms is used. For example, modified
and superseded describes a situation
where the substance of a previously pub-
lished ruling is being changed in part and
is continued without change in part and it
is desired to restate the valid portion of
the previously published ruling in a new
ruling that is self contained. In this case
the previously published ruling is first
modified and then, as modified, is super-
seded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and
that list is expanded by adding further
names in subsequent rulings. After the
original ruling has been supplemented
several times, a new ruling may be pub-
lished that includes the list in the original
ruling and the additions, and supersedes
all prior rulings in the series.
Suspended is used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.
Abbreviations
The following abbreviations in current use and for-
merly used will appear in material published in the
Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contribution Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign Corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statements of 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.
Definition of Terms

2000–32 I.R.B.iiAugust 7, 2000
Numerical Finding List
1
Bulletins 2000–27 through 2000–31
Announcements:
2000–57, 2000–28 I.R.B. 115
2000–58, 2000–30 I.R.B. 135
2000–59, 2000–29 I.R.B. 120
2000–60, 2000–31 I.R.B. 149
2000–61, 2000–30 I.R.B. 136
2000–62, 2000–30 I.R.B. 137
2000–63, 2000–31 I.R.B. 149
2000–64, 2000–31 I.R.B. 149
2000–65, 2000–31 I.R.B. 150
Court Decisions:
2068, 2000–28 I.R.B. 109
Notices:
2000–33, 2000–27 I.R.B. 97
2000–35, 2000–29 I.R.B. 118
2000–37, 2000–29 I.R.B. 118
2000–39, 2000–30 I.R.B. 132
2000–40, 2000–30 I.R.B. 134
Proposed Regulations:
REG–105316–98, 2000–27 I.R.B. 98
Railroad Retirement Quarterly Rate:
2000–28, I.R.B. 112
2000–29, I.R.B. 117
Revenue Procedures:
2000–28, 2000–27 I.R.B. 60
2000–29, 2000–28 I.R.B. 113
2000–30, 2000–28 I.R.B. 113
2000–31, 2000–31 I.R.B. 146
Revenue Rulings:
2000–32, 2000–27 I.R.B. 1
2000–33, 2000–31 I.R.B. 142
2000–34, 2000–29 I.R.B. 116
2000–35, 2000–31 I.R.B. 138
2000–36, 2000–31 I.R.B. 140
Treasury Decisions:
8886, 2000–27 I.R.B. 3
8888, 2000–27 I.R.B. 3
8889, 2000–30 I.R.B. 124
8890, 2000–30 I.R.B. 122
8893, 2000–31 I.R.B. 143
1
A cumulative list of all revenue rulings, revenue
procedures, Treasury decisions, etc., published in
Internal Revenue Bulletins 2000–1 through 2000–26
is in Internal Revenue Bulletin 2000–27, dated July
3, 2000.

August 7, 2000iii2000–32 I.R.B.
Finding List of Current Actions on
Previously Published Items
1
Bulletins 2000–27 through 2000–31
Proposed Regulations:
FI–42–90
Withdrawn by
Announcement 2000–63, 2000–31 I.R.B. 149
Revenue Procedures:
98–50
Modified and superseded by
Rev. Proc. 2000–31, 2000–31 I.R.B. 146
98–51
Modified and superseded by
Rev. Proc. 2000–31, 2000–31 I.R.B. 146
99–18
Modified by
Rev. Proc. 2000–29, 2000–28 I.R.B. 113
99–34
Superseded by
Rev. Proc. 2000–28, 2000–27 I.R.B. 60
Treasury Decisions:
8883
Corrected by
Announcement 2000–57, 2000–28 I.R.B. 115
1
A cumulative list of current actions on previously
published items in Internal Revenue Bulletins
2000–1 through 2000–26 is in Internal Revenue
Bulletin 2000–27, dated July 3, 2000.

Index
Internal Revenue Bulletins
2000–27 Through 2000–32
The abbreviation and number in paren-
thesis following the index entry refer to
the specific item; numbers in roman and
italic type following the parenthesis refer
to the Internal Revenue Bulletin in which
the item may be found and the page
number on which it appears.
Key to Abbreviations:
AnnAnnouncement
CDCourt Decision
DODelegation Order
EOExecutive Order
PLPublic Law
PTEProhibited Transaction
Exemption
RPRevenue Procedure
RRRevenue Ruling
SPRStatement of Procedural
Rules
TCTax Convention
TDTreasury Decision
TDOTreasury Department Order
EMPLOYEE PLANS
Cafeteria plans, notice of public hearing
on proposed regulations (Ann 65) 31,
150
Employee annuities; section 403(b)
plans, elective deferrals (RR 35) 31,
138
Full funding limitations, weighted aver-
age interest rate for July 2000 (Notice
40) 30, 134
Letter rulings, determination letters, and
information letters issued by the
Office of Chief Counsel (Notice 35)
29, 118
Nonqualified deferred compensation
(RR 33) 31, 142
Protected benefits, direct rollover (RR
36) 31, 140
Prototype plans, automatic enrollment
features (Ann 60) 31, 149
EMPLOYMENT TAX
Railroad retirement, rate determination,
quarterly:
April 1, 2000, 28, 112
July 1, 2000, 29, 117
ESTATE TAX
Charitable, etc., transfers:
Trust remainder, updating forms and
provisions, request for public com-
ments (Notice 37) 29, 118
Regulations:
26 CFR 20.2031-0, -7, amended;
20.2031-7T, removed; 20.7520-1,
amended; 20.7520-1T, removed; valu-
ation of annuities, interests for life or
term of years, and remainder or rever-
sionary interests (TD 8886) 27, 3
Valuation of annuities, interests for life
or term of years, and remainder or
reversionary interests (TD 8886) 27, 3
EXCISE TAX
Taxable fuel, measurement of (Notice
33) 27, 97
EXEMPT
ORGANIZATIONS
Letter rulings, determination letters, and
information letters issued by the Office
of Chief Counsel (Notice 35) 29, 118
List of organizations classified as private
foundations (Ann 61) 30, 136
Revocations (Ann 62) 30, 137
GIFT TAX
Regulations:
26 CFR 25.2512-0, amended; 25.2512-
5, revised; 25.2512-5T, removed;
25.7520-1, revised; 25.7520-1T,
removed; valuation of annuities,
interests for life or term of years,
and remainder or reversionary inter-
ests (TD 8886) 27, 3
Valuation of annuities, interests for life
or term of years, and remainder or
reversionary interests (TD 8886) 27, 3
INCOME TAX
Bad debt reserves of thrift institutions,
withdrawal of proposed regulations
(Ann 63) 31, 149
Charitable, etc., transfers:
Trust remainder:
Updating forms and provisions,
request for public comments (Notice
37) 29, 118
Collateralized debt obligations (CDOs)
and REMICs, reporting requirements
(TD 8888) 27, 3
Corporations, disposition of stock in a
taxable transaction; correction (Ann
57) 28, 115
Credit, Targeted Jobs Tax Credit, settle-
ment initiative (Ann 58) 30, 135
Debt roll-ups, election to treat certain
debt substitutions as realization events
(RP 29) 28, 113
Fiscally transparent entities (TD 8889)
30, 124
Forms:
1040, e-fileprogram (RP 31) 31, 146
1096, 1098, 1099, 5498, and W-2G,
substitute forms specifications (RP 28)
27, 60
Gross income, de minimispremiums,
treatment of (RP 30) 28, 113
Individual retirement arrangements,
returned/recharacterized contributions,
net income calculation (Notice 39) 30,
132
Information reporting, payments and
reimbursements of qualified tuition
and related expenses (REG-105316-
98) 27, 98
Information returns, magnetic media fil-
ing requirements (REG-105316-98)
27, 98
Interest:
Investment:
Federal short-term, mid-term, and
long-term rates for July 2000 (RR
32) 27, 1
Inventory:
LIFO:
Price indexes, department stores for
May 2000 (RR 34) 29, 116
Letter rulings, determination letters, and
information letters issued by the Office
of Chief Counsel (Notice 35) 29, 118
Private foundations, organizations now
classified as (Ann 61) 30, 136
Proposed Regulations:
26 CFR 6050S-0, -1,-2, added;
301.6011-2, amended; information
reporting, payments and reimburse-
ments of qualified tuition and relat-
2000–32 I.R.B.ivAugust 7, 2000
INCOME TAX—Cont.

August 7, 2000v2000–32 I.R.B.
ed expenses (REG-105316-98) 27,
98
Publication 1212, supplemental informa-
tion on short-term Treasury bills (Ann
64) 31, 149
Real estate mortgage investment conduits
(REMICs) and CDOs, reporting
requirements (TD 8888) 27, 3
Regulations:
26 CFR 1.170A-12, revised; 1.170A-
12T, removed; 1.642(c)-6, revised;
1.642(c)-6T, removed; 1.664-4,
amended; 1.664-4T, removed; 1.7520-
1, amended; 1.7520-1T, removed; val-
uation of annuities, interests for life or
term of years, and remainder or rever-
sionary interests (TD 8886) 27, 3
26 CFR 1.643(h)-1, amended; 1.671-
2(e), revised; 1.671-2T, removed;
1.672(f)-2, -3, -4, -5, amended; defi-
nition of grantor (TD 8890) 30, 122
26 CFR 1.894-1, revised; fiscally
transparent entities (TD 8889) 30,
124
26 CFR 1.1032-3, correction; disposi-
tion of stock in a taxable transaction
(Ann 57) 28, 115
26 CFR 1.6049-7, amended; real estate
mortgage investment conduits;
reporting requirements and other
administrative matters (TD 8888)
27, 3
26 CFR 1.6695-1, amended; 1.6695-
1T, removed; requirement to retain
copy of return or claim signed by
preparer (TD 8893) 31, 143
Retention of return or claim signed by
tax preparer (TD 8893) 31, 143
Revocations, exempt organizations (Ann
62) 30, 137
Substitute forms, 1096, 1098, 1099,
5498, and W-2G, rules and specifica-
tions (RP 28) 27, 60
Tax claims in bankruptcy court (CD
2068) 28, 109
Tax conventions, treaty with Denmark,
Pubs. 515 and 901, supplemental
tables (Ann 59) 29, 120
Trusts, definition of grantor (TD 8890)
30,122
Valuation of annuities, interests for life
or term of years, and remainder or
reversionary interests (TD 8886) 27, 3
INCOME TAX—Cont.

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