Internal Revenue Bulletin 2001-52 (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.

HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
INCOME TAX
Rev. Rul. 2001–63, page 606.
Interest rates; underpayments and overpayments.The
rate of interest determined under section 6621 of the Code for
the calendar quarter beginning January 1, 2002, will be 6 per-
cent for overpayments (5 percent in the case of a corporation),
6 percent for underpayments, and 8 percent for large corpo-
rate underpayments. The rate of interest paid on the portion of
a corporate overpayment exceeding $10,000 will be 3.5 per-
cent.
Notice 2001–76, page 613.
Proposed revenue procedure regarding the cash
method.This notice provides a proposed revenue procedure
under section 446 of the Code that would permit the eligible
trades or businesses of qualifying taxpayers to use the cash
method of accounting as described in the procedure.
Notice 2001–82, page 619.
This notice extends the safe harbor provisions of Notice
88–129 under section 118 of the Code to include transfers of
interties from non-Qualifying Facilities and certain other trans-
actions. Notices 88–129 and 90–60 amplified and modified.
Rev. Proc. 2001–59, page 623.
Cost-of-living adjustments for 2002.This procedure pro-
vides cost-of-living adjustments for the tax rate tables for indi-
viduals, estates, and trusts, the standard deduction amounts,
the personal exemption, and several other items that use the
adjustment method provided for the tax rate tables. The Ser-
vice also provides the adjustment for eligible long-term care
premiums and another item that uses the adjustment method
provided for eligible long-term care premiums.
EMPLOYEE PLANS
Notice 2001–80, page 617.
Weighted average interest rate update.The weighted aver-
age interest rate for December 2001 and the resulting permis-
sible range of interest rates used to calculate current liability
for purposes of the full funding limitation of section 412(c)(7) of
the Code are set forth.
EXEMPT ORGANIZATIONS
Notice 2001–81, page 617.
This notice provides guidance regarding recordkeeping, report-
ing, and other requirements applicable to qualified tuition pro-
grams described in section 529 of the Code.
Announcement 2001–123, page 629.
A list is provided of organizations now classified as private
foundations.
EMPLOYMENT TAX
Notice 2001–83, page 621.
This notice provides tables that show the amount of an individu-
al’s income that is exempt from a notice of levy used to collect
delinquent tax in 2002.
(Continued on the next page)
Finding Lists begin on page ii.
Bulletin No. 2001–52
December 26, 2001

ADMINISTRATIVE
Announcement 2001–124, page 630.
This announcement provides additional disaster relief for part-
ners, shareholders, and beneficiaries of affected taxpayers as
defined in Notice 2001–61 (2001–40 I.R.B. 305). This
announcement modifies and expands the relief granted by
Announcement 2001–117 (2001–49 I.R.B. 567).
December 26, 20012001–52 I.R.B.

The IRS Mission
Provide America’s taxpayers top quality service by helping
them understand and meet their tax responsibilities and by
applying the tax law with integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, 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 Bulle-
tins, 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 Bul-
letin. All published rulings apply retroactively unless otherwise
indicated. Procedures relating solely to matters of internal
management are not published; however, statements of inter-
nal 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 rev-
enue ruling. In those based on positions taken in rulings to tax-
payers or technical advice to Service field offices, identifying
details and information of a confidential nature are deleted to
prevent unwarranted invasions of privacy and to comply with
statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
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 Other Related Items, and Subpart B, Legisla-
tion and Related Committee Reports.
Part III.—Administrative, Procedural, and
Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Secre-
tary (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 semiannual
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, DC 20402.
2001–52 I.R.B.December 26, 2001

December 26, 20012001–52 I.R.B.

Part I. Rulings and Decisions Under the Internal Revenue Code of 1986
Section 1.—Tax Imposed
The Service provides inflation adjustments to
the tax rate tables for individuals, trusts, and estates
for taxable years beginning in 2002. In addition, the
amounts of certain reductions allowed against the
unearned income of minor children in computing
the “kiddie tax” are adjusted. Also adjusted are the
amounts used to determine whether a parent may
elect to report the “kiddie tax” on the parent’s
return. See Rev. Proc. 2001–59, page 623.
Section 24.—Child Tax Credit
The Service provides inflation adjustments for
the value used in determining the amount of the
credit that may be refundable beginning in 2002.
See Rev. Proc. 2001–59, page 623.
Section 25A.—Hope and
Lifetime Learning Credits
The Service provides inflation adjustments for
the amount of qualified tuition and related expenses
that are taken into account in determining the
amount of the Hope Scholarship Credit for taxable
years beginning in 2002, and for the amount of a
taxpayer’s modified adjusted gross income that is
taken into account in determining the reduction in
the amount of the Hope Scholarship and Lifetime
Learning Credits otherwise available. See Rev. Proc.
2001–59, page 623.
Section 32.—Earned Income
The Service provides inflation adjustments to
the limitations on the earned income tax credit for
taxable years beginning in 2002. See Rev. Proc.
2001–59, page 623.
Section 59.—Other Definitions
and Special Rules for the
Alternative Minimum Tax
The Service provides an inflation adjustment to
the exemption amount used in computing the alter-
native minimum tax for a minor child subject to the
“kiddie tax” for taxable years beginning in 2002.
See Rev. Proc. 2001–59, page 623.
Section 63.—Taxable Income
Defined
The Service provides inflation adjustments to
the standard deduction amounts (including the limi-
tation in the case of certain dependents, and the
additional standard deduction for the aged or blind)
for taxable years beginning in 2002. See Rev. Proc.
2001–59, page 623.
Section 68.—Overall
Limitation on Itemized
Deductions
The Service provides inflation adjustments to
the overall limitation on itemized deductions for
taxable years beginning in 2002. See Rev. Proc.
2001–59, page 623.
Section 132.—Certain Fringe
Benefits
The Service provides inflation adjustments to
the limitations on the exclusion of income for a
qualified transportation fringe for taxable years
beginning in 2002. See Rev. Proc. 2001–59, page
623.
Section 135.—Income From
United States Savings Bonds
Used to Pay Higher Education
Tuition and Fees
The Service provides inflation adjustments to
the limitation on the exclusion of income from
United States savings bonds for taxpayers who pay
qualified higher education expenses for taxable
years beginning in 2002. See Rev. Proc. 2001–59,
page 623.
Section 151.—Allowance of
Deductions for Personal
Exemptions
The Service provides inflation adjustments to
the personal exemption and to the threshold
amounts of adjusted income above which the
exemption amount phases out for taxable years
beginning in 2002. See Rev. Proc. 2001–59, page
623.
Section 170.—Charitable,
etc., Contributions and Gifts
The Service provides inflation adjustments to
the “insubstantial benefit” guidelines for calendar
year 2002. Under the guidelines, a charitable contri-
bution is fully deductible even though the contribu-
tor receives “insubstantial benefits” from the charity.
See Rev. Proc. 2001–59, page 623.
Section 213.—Medical,
Dental, etc., Expenses
The Service provides inflation adjustments to
the limitation on the amount of eligible long-term
care premiums includible in the term “medical
care,” for taxable years beginning in 2002. See Rev.
Proc. 2001–59, page 623.
Section 220.—Archer MSAs
The Service provides inflation adjustments to
the amounts used to determine whether a health plan
is a “high deductible health plan” for purposes of
determining whether an individual is eligible for a
deduction for cash paid to a medical savings account
for taxable years beginning in 2002. See Rev. Proc.
2001–59, page 623.
Section 512.—Unrelated
Business Taxable Income
The Service provides an inflation adjustment to
the maximum amount of annual dues that can be
paid to certain agricultural or horticultural organiza-
tions without any portion being treated as unrelated
trade or business income by reason of any benefits
or privileges available to members for taxable years
beginning in 2002. See Rev. Proc. 2001–59, page
623.
Section 513.—Unrelated
Trade or Business
The Service provides inflation adjustments to
the maximum amount of a “low cost article” for
taxable years beginning in 2002. Funds raised
through a charity’s distribution of “low cost
articles” will not be treated as unrelated business
income to the charity. See Rev. Proc. 2001–59, page
623.
2001–52 I.R.B605December 26, 2001

Section 685.—Treatment of
Funeral Trusts
The Service provides an inflation adjustment to
the maximum amount of contributions that may be
made to a qualified funeral trust for contracts
entered in calendar year 2002. See Rev. Proc. 2001–
59, page 623.
Section 877.—Expatriation to
Avoid Tax
The Service provides inflation adjustments to
amounts used to determine whether an individual’s
loss of United States citizenship had the avoidance
of United States tax as one of its principal purposes
for calendar year 2002. See Rev. Proc. 2001–59,
page 623.
Section 2032A.—Valuation of
Certain Farm, etc., Real
Property
The Service provides an inflation adjustment to
the maximum amount by which the value of certain
farm and other qualified real property included in a
decedent’s gross estate may be decreased for pur-
poses of valuing the estate of a decedent dying in
calendar year 2002. See Rev. Proc. 2001–59, page
623.
Section 2503.—Taxable Gifts
The Service provides an inflation adjustment to
the amount of gifts that may be made to a person in
a calendar year without including the amount in tax-
able gifts for calendar year 2002. See Rev. Proc.
2001–59, page 623.
Section 2523.—Gift to Spouse
The Service provides an inflation adjustment to
the amount of gifts that may be made in a calendar
year to a spouse who is not a citizen of the United
States without including the amount in taxable gifts
for calendar year 2002. See Rev. Proc. 2001–59,
page 623.
Section 2631.—GST
Exemption
The Service provides an inflation adjustment to
the amount of the generation-skipping transfer tax
exemption for calendar year 2002. See Rev. Proc.
2001–59, page 623.
Section 4001.—Imposition of
Ta x
The Service provides inflation adjustments to
the price above which a passenger vehicle becomes
subject to an excise tax for transactions occurring in
calendar year 2002. See Rev. Proc. 2001–59, page
623.
Section 4003.—Special Rules
The Service provides inflation adjustments to
the price above which a passenger vehicle becomes
subject to an excise tax for transactions occurring in
calendar year 2002. (Price includes the price of
installation of parts or accessories on a passenger
vehicle within six months of the date after the
vehicle was first placed in service.) See Rev. Proc.
2001–59, page 623.
Section 4261.—Imposition of
Ta x
The Service provides an inflation adjustment to
the amount of the excise tax on passenger air trans-
portation beginning or ending in the United States
for calendar year 2002. See Rev. Proc. 2001–59,
page 623.
Section 6033.—Returns by
Exempt Organizations
The Service provides an inflation adjustment to
the amount of dues certain exempt organizations
with nondeductible lobbying expenditures can
charge and still be excepted from reporting require-
ments for taxable years beginning in 2002. See Rev.
Proc. 2001–59, page 623.
Section 6039F.—Notice of
Large Gifts Received From
Foreign Persons
The Service provides an inflation adjustment to
the amount of gifts in a taxable year from foreign
person(s) that triggers a reporting requirement for a
United States person for taxable years beginning in
2002. See Rev. Proc. 2001–59, page 623.
Section 6323.—Validity and
Priority Against Certain
Persons
The Service provides inflation adjustments for
calendar year 2002 to (1) the maximum amount of a
casual sale of personal property below which a fed-
eral tax lien will not be valid against a purchaser of
the property, and (2) the maximum amount of a con-
tract for the repair or improvement of certain resi-
dential property at or below which a federal tax lien
will not be valid against a mechanic’s lienor. See
Rev. Proc. 2001–59, page 623.
Section 6334.—Property
Exempt From Levy
The Service provides inflation adjustments to
the value of certain property exempt from levy (fuel,
provisions, furniture, household personal effects,
arms for personal use, livestock, poultry, and books
and tools of a trade, business, or profession) for cal-
endar year 2002. See Rev. Proc. 2001–59, page 623.
Section 6601.—Interest on
Underpayment, Nonpayment,
or Extension of Time for
Payment, of Tax
The Service provides an inflation adjustment to
the amount used to determine the amount of interest
charged on a certain portion of the estate tax pay-
able in installments for the estate of a decedent
dying in calendar year 2002. See Rev. Proc. 2001–
59, page 623.
Section 6621.—
Determination of Rate of
Interest
26 CFR 301.6621–1: Interest rate.
Interest rates; underpayments and
overpayments.The rate of interest deter-
mined under section 6621 of the Code for
the calendar quarter beginning January 1,
2002, will be 6 percent for overpayments
(5 percent in the case of a corporation), 6
percent for underpayments, and 8 percent
for large corporate underpayments. The
rate of interest paid on the portion of a
corporate overpayment exceeding
$10,000 is 3.5 percent.
December 26, 20016062001–52 I.R.B.

Rev. Rul. 2001–63
Section 6621 of the Internal Revenue
Code establishes the rates for interest on
tax overpayments and tax underpayments.
Under§6621(a)(1), the overpayment rate
beginning January 1, 2002, is the sum of
the federal short-term rate plus 3 percent-
age points (2 percentage points in the
case of a corporation), except the rate for
the portion of a corporate overpayment of
tax exceeding $10,000 for a taxable
period is the sum of the federal short-term
rate plus 0.5 of a percentage point for
interest computations made after Decem-
ber 31, 1994. Under§6621(a)(2), the
underpayment rate is the sum of the fed-
eral short-term rate plus 3 percentage
points.
Section 6621(c) provides that for pur-
poses of interest payable under§6601 on
any large corporate underpayment, the
underpayment rate under§6621(a)(2) is
determined by substituting“5 percent-
age points”for“3 percentage points.”
See§6621(c) and§301.6621–3ofthe
Regulations on Procedure and Adminis-
tration for the definition of a large corpo-
rate underpayment and for the rules for
determining the applicable date. Section
6621(c) and§301.6621–3 are generally
effective for periods after December 31,
1990.
Section 6621(b)(1) provides that the
Secretary will determine the federal
short-term rate for the first month in each
calendar quarter.
Section 6621(b)(2)(A) provides that
the federal short-term rate determined
under§6621(b)(1) for any month applies
during the first calendar quarter begin-
ning after such month.
Section 6621(b)(2)(B) providesthat
in determining the addition to tax under
§6654 for failure to pay estimated tax for
any taxable year, the federal short-term
rate that applies during the third month
following such taxable year also applies
during the first 15 days of the fourth
month following such taxable year.
Section 6621(b)(3) provides that the
federal short-term rate for any month is
the federal short-term rate determined
during such month by the Secretary in
accordance with§1274(d), rounded to
the nearest full percent (or, if a multiple
of 1/2 of 1 percent, the rate is increased to
the next highest full percent).
Notice 88–59 (1988–1 C.B. 546)
announced that, in determining the quar-
terly interest rates to be used for overpay-
mentsand underpaymentsoftax
under§6621, the Internal Revenue Ser-
vice will use the federal short-term rate
based on daily compounding because that
rate is most consistent with§6621 which,
pursuant to§6622, is subject to daily
compounding.
Rounded to the nearest full percent,
the federal short-term rate based on daily
compounding determined during the
month of October 2001 is 3 percent.
Accordingly, an overpayment rate of 6
percent (5 percent in the case of a corpo-
ration) and an underpayment rate of 6
percent are established for the calendar
quarter beginning January 1, 2002. The
overpayment rate for the portion of a cor-
porate overpayment exceeding $10,000
for the calendar quarter beginning Janu-
ary 1, 2002, is 3.5 percent. The underpay-
ment rate for large corporate underpay-
ments for the calendar quarter beginning
January 1, 2002, is 8 percent. These rates
apply to amounts bearing interest during
that calendar quarter.
The 6 percent rate also applies to esti-
mated tax underpayments for the first cal-
endar quarter in 2002 and for the first 15
days in April 2002.
Interest factors for daily compound
interest for annual rates of 3.5 percent, 5
percent, 6 percent, and 8 percent are pub-
lished in Tables 12, 15, 17, and 21 of Rev.
Proc. 95–17 (1995–1 C.B. 556, 566, 569,
571, and 575).
Annual interest rates to be com-
pounded daily pursuant to§6622 that
apply for prior periods are set forth in the
tables accompanying this revenue ruling.
DRAFTING INFORMATION
The principal author of this revenue
ruling is Raymond Bailey of the Office of
Assistant Chief Counsel (Administrative
Provisions and Judicial Practice). For fur-
ther information regarding this revenue
ruling, contact Mr. Bailey at (202) 622–
6226 (not a toll-free call).
TABLE OF INTEREST RATES
PERIODS BEFORE JUL. 1, 1975 - PERIODS ENDING DEC. 31, 1986
OVERPAYMENTS AND UNDERPAYMENTS
In 1995–1 C.B.
PERIODRATEDAILY RATE TABLE
Before Jul. 1, 19756%Table 2, pg. 557
Jul. 1, 1975—Jan. 31, 19769%Table 4, pg. 559
Feb. 1, 1976—Jan. 31, 19787%Table 3, pg. 558
Feb. 1, 1978—Jan. 31, 19806%Table 2, pg. 557
Feb. 1, 1980—Jan. 31, 198212%Table 5, pg. 560
Feb. 1, 1982—Dec. 31, 198220%Table 6, pg. 560
Jan. 1, 1983—Jun. 30, 198316%Table 37, pg. 591
Jul. 1, 1983—Dec. 31, 198311%Table 27, pg. 581
Jan. 1, 1984—Jun. 30, 198411%Table 75, pg. 629
2001–52 I.R.B607December 26, 2001

TABLE OF INTEREST RATES
PERIODS BEFORE JUL. 1, 1975 - PERIODS ENDING DEC. 31, 1986
OVERPAYMENTS AND UNDERPAYMENTS—CONTINUED
In 1995–1 C.B.
PERIODRATEDAILY RATE TABLE
Jul. 1, 1984—Dec. 31, 198411%Table 75, pg. 629
Jan. 1, 1985—Jun. 30, 198513%Table 31, pg. 585
Jul. 1, 1985—Dec. 31, 198511%Table 27, pg. 581
Jan. 1, 1986—Jun. 30, 198610%Table 25, pg. 579
Jul. 1, 1986—Dec. 31, 19869%Table 23, pg. 577
TABLE OF INTEREST RATES
FROM JAN. 1, 1987 - DEC. 31, 1998
OVERPAYMENTSUNDERPAYMENTS
1995–1 C.B.1995–1 C.B.
RATETABLEPGRATETABLEPG
Jan. 1, 1987—Mar. 31, 19878%215759%23577
Apr. 1, 1987—Jun. 30, 19878%215759%23577
Jul. 1, 1987—Sep. 30, 19878%215759%23577
Oct. 1, 1987—Dec. 31, 19879%2357710%25579
Jan. 1, 1988—Mar. 31, 198810%7362711%75629
Apr. 1, 1988—Jun. 30, 19889%7162510%73627
Jul. 1, 1988—Sep. 30, 19889%7162510%73627
Oct. 1, 1988—Dec. 31, 198810%7362711%75629
Jan. 1, 1989—Mar. 31, 198910%2557911%27581
Apr. 1, 1989—Jun. 30, 198911%2758112%29583
Jul. 1, 1989—Sep. 30, 198911%2758112%29583
Oct. 1, 1989—Dec. 31, 198910%2557911%27581
Jan. 1, 1990—Mar. 31, 199010%2557911%27581
Apr. 1, 1990—Jun. 30, 199010%2557911%27581
Jul. 1, 1990—Sep. 30, 199010%2557911%27581
Oct. 1, 1990—Dec. 31, 199010%2557911%27581
Jan. 1, 1991—Mar. 31, 199110%2557911%27581
Apr. 1, 1991—Jun. 30, 19919%2357710%25579
Jul. 1, 1991—Sep. 30, 19919%2357710%25579
Oct. 1, 1991—Dec. 31, 19919%2357710%25579
Jan. 1, 1992—Mar. 31, 19928%696239%71625
Apr. 1, 1992—Jun. 30, 19927%676218%69623
Jul. 1, 1992—Sep. 30, 19927%676218%69623
Oct. 1, 1992—Dec. 31, 19926%656197%67621
Jan. 1, 1993—Mar. 31, 19936%175717%19573
Apr. 1, 1993—Jun. 30, 19936%175717%19573
December 26, 20016082001–52 I.R.B.

TABLE OF INTEREST RATES
FROM JAN. 1, 1987 - DEC. 31, 1998–CONTINUED
OVERPAYMENTSUNDERPAYMENTS
1995–1 C.B.1995–1 C.B.
RATETABLEPGRATETABLEPG
Jul. 1, 1993–Sep. 30, 19936%175717%19573
Oct. 1, 1993—Dec. 31, 19936%175717%19573
Jan. 1, 1994—Mar. 31, 19946%175717%19573
Apr. 1, 1994—Jun. 30, 19946%175717%19573
Jul. 1, 1994—Sep. 30, 19947%195738%21575
Oct. 1, 1994—Dec. 31, 19948%215759%23577
Jan. 1, 1995—Mar. 31, 19958%215759%23577
Apr. 1, 1995—Jun. 30, 19959%2357710%25579
Jul. 1, 1995—Sep. 30, 19958%215759%23577
Oct. 1, 1995—Dec. 31, 19958%215759%23577
Jan. 1, 1996—Mar. 31, 19968%696239%71625
Apr. 1, 1996—Jun. 30, 19967%676218%69623
Jul. 1, 1996—Sep. 30, 19968%696239%71625
Oct. 1, 1996—Dec. 31, 19968%696239%71625
Jan. 1, 1997—Mar. 31, 19978%215759%23577
Apr. 1, 1997—Jun. 30, 19978%215759%23577
Jul. 1, 1997—Sep. 30, 19978%215759%23577
Oct. 1, 1997—Dec. 31, 19978%215759%23577
Jan. 1, 1998—Mar. 31, 19988%215759%23577
Apr. 1, 1998—Jun. 30, 19987%195738%21575
Jul. 1, 1998—Sep. 30, 19987%195738%21575
Oct. 1, 1998—Dec. 31, 19987%195738%21575
TABLE OF INTEREST RATES
FROM JANUARY 1, 1999 - PRESENT
NONCORPORATE OVERPAYMENTS AND UNDERPAYMENTS
1995–1 C.B.
RATETABLEPAGE
Jan. 1, 1999—Mar. 31, 19997%19573
Apr. 1, 1999—Jun. 30, 19998%21575
Jul. 1, 1999—Sep. 30, 19998%21575
Oct. 1, 1999—Dec. 31, 19998%21575
Jan. 1, 2000—Mar. 31, 20008%69623
Apr. 1, 2000—Jun. 30, 20009%71625
Jul. 1, 2000—Sep. 30, 20009%71625
Oct. 1, 2000—Dec. 31, 20009%71625
Jan. 1, 2001—Mar. 31, 20019%23577
2001–52 I.R.B609December 26, 2001

TABLE OF INTEREST RATES
FROM JANUARY 1, 1999 - PRESENT
NONCORPORATE OVERPAYMENTS AND UNDERPAYMENTS—CONTINUED
1995–1 C.B.
RATETABLEPAGE
Apr. 1, 2001—Jun. 30, 20018%21575
Jul. 1, 2001—Sep. 30, 20017%19573
Oct. 1, 2001—Dec. 31, 20017%19573
Jan. 1, 2002—Mar. 31, 20026%17571
TABLE OF INTEREST RATES
FROM JANUARY 1, 1999 - PRESENT
CORPORATE OVERPAYMENTS AND UNDERPAYMENTS
OVERPAYMENTSUNDERPAYMENTS
1995–1 C.B.1995–1 C.B.
RATETABLEPGRATETABLEPG
Jan. 1, 1999—Mar. 31, 19996%175717%19573
Apr. 1, 1999—Jun. 30, 19997%195738%21575
Jul. 1, 1999—Sep. 30, 19997%195738%21575
Oct. 1, 1999—Dec. 31, 19997%195738%21575
Jan. 1, 2000—Mar. 31, 20007%676218%69623
Apr. 1, 2000—Jun. 30, 20008%696239%71625
Jul. 1, 2000—Sep. 30, 20008%696239%71625
Oct. 1, 2000—Dec. 31, 20008%696239%71625
Jan. 1, 2001—Mar. 31, 20018%215759%23577
Apr. 1, 2001—Jun. 30, 20017%195738%21575
Jul. 1, 2001—Sep. 30, 20016%175717%19573
Oct. 1, 2001—Dec. 31, 20016%175717%19573
Jan. 1, 2002—Mar. 31, 20025%155696%17571
TABLE OF INTEREST RATES FOR
LARGE CORPORATE UNDERPAYMENTS
FROM JANUARY 1, 1991 - PRESENT
1995–1 C.B.
RATETABLEPG
Jan. 1, 1991—Mar. 31, 199113%31585
Apr. 1, 1991—Jun. 30, 199112%29583
Jul. 1, 1991—Sep. 30, 199112%29583
Oct. 1, 1991—Dec. 31, 199112%29583
Jan. 1, 1992—Mar. 31, 199211%75629
Apr. 1, 1992—Jun. 30, 199210%73627
Jul. 1, 1992—Sep. 30, 199210%73627
December 26, 20016102001–52 I.R.B.

TABLE OF INTEREST RATES FOR
LARGE CORPORATE UNDERPAYMENTS
FROM JANUARY 1, 1991 - PRESENT—CONTINUED
1995–1 C.B.
RATETABLEPG
Oct. 1, 1992—Dec. 31, 19929%71625
Jan. 1, 1993—Mar. 31, 19939%23577
Apr. 1, 1993—Jun. 30, 19939%23577
Jul. 1, 1993—Sep. 30, 19939%23577
Oct. 1, 1993—Dec. 31, 19939%23577
Jan. 1, 1994—Mar. 31, 19949%23577
Apr. 1, 1994—Jun. 30, 19949%23577
Jul. 1, 1994—Sep. 30, 199410%25579
Oct. 1, 1994—Dec. 31, 199411%27581
Jan. 1, 1995—Mar. 31, 199511%27581
Apr. 1, 1995—Jun. 30, 199512%29583
Jul. 1, 1995—Sep. 30, 199511%27581
Oct. 1, 1995—Dec. 31, 199511%27581
Jan. 1, 1996—Mar. 31, 199611%75629
Apr. 1, 1996—Jun. 30, 199610%73627
Jul. 1, 1996—Sep. 30, 199611%75629
Oct. 1, 1996—Dec. 31, 199611%75629
Jan. 1, 1997—Mar. 31, 199711%27581
Apr. 1, 1997—Jun. 30, 199711%27581
Jul. 1, 1997—Sep. 30, 199711%27581
Oct. 1, 1997—Dec. 31, 199711%27581
Jan. 1, 1998—Mar. 31, 199811%27581
Apr. 1, 1998—Jun. 30, 199810%25579
Jul. 1, 1998—Sep. 30, 199810%25579
Oct. 1, 1998—Dec. 31, 199810%25579
Jan. 1, 1999—Mar. 31, 19999%23577
Apr. 1, 1999—Jun. 30, 199910%25579
Jul. 1, 1999—Sep. 30, 199910%25579
Oct. 1, 1999—Dec. 31, 199910%25579
Jan. 1, 2000—Mar. 31, 200010%73627
Apr. 1, 2000—Jun. 30, 200011%75629
Jul. 1, 2000—Sep. 30, 200011%75629
Oct. 1, 2000—Dec. 31, 200011%75629
Jan. 1, 2001—Mar. 31, 200111%27581
Apr. 1, 2001—Jun. 30, 200110%25579
Jul. 1, 2001—Sep. 30, 20019%23577
Oct. 1, 2001—Dec. 31, 20019%23577
Jan. 1, 2002—Mar. 31, 20028%21575
2001–52 I.R.B611December 26, 2001

TABLE OF INTEREST RATES FOR
CORPORATE OVERPAYMENTS EXCEEDING $10,000
FROM JANUARY 1, 1995 - PRESENT
1995–1 C.B.
RATETABLEPG
Jan. 1, 1995—Mar. 31, 19956.5%18572
Apr. 1, 1995—Jun. 30, 19957.5%20574
Jul. 1, 1995—Sep. 30, 19956.5%18572
Oct. 1, 1995—Dec. 31, 19956.5%18572
Jan. 1, 1996—Mar. 31, 19966.5%66620
Apr. 1, 1996—Jun. 30, 19965.5%64618
Jul. 1, 1996—Sep. 30, 19966.5%66620
Oct. 1, 1996—Dec. 31, 19966.5%66620
Jan. 1, 1997—Mar. 31, 19976.5%18572
Apr. 1, 1997—Jun. 30, 19976.5%18572
Jul. 1, 1997—Sep. 30, 19976.5%18572
Oct. 1, 1997—Dec. 31, 19976.5%18572
Jan. 1, 1998—Mar. 31, 19986.5%18572
Apr. 1, 1998—Jun. 30, 19985.5%16570
Jul. 1, 1998—Sep. 30, 19985.5%16570
Oct. 1, 1998—Dec. 31, 19985.5%16570
Jan. 1, 1999—Mar. 31, 19994.5%14568
Apr. 1, 1999—Jun. 30, 19995.5%16570
Jul. 1, 1999—Sep. 30, 19995.5%16570
Oct. 1, 1999—Dec. 31, 19995.5%16570
Jan. 1, 2000—Mar. 31, 20005.5%64618
Apr. 1, 2000—Jun. 30, 20006.5%66620
Jul. 1, 2000—Sep. 30, 20006.5%66620
Oct. 1, 2000—Dec. 31, 20006.5%66620
Jan. 1, 2001—Mar. 31, 20016.5%18572
Apr. 1, 2001—Jun. 30, 20015.5%16570
Jul. 1, 2001—Sep. 30, 20014.5%14568
Oct. 1, 2001—Dec. 31, 20014.5%14568
Jan. 1, 2002—Mar. 31, 20023.5%12566
Section 7430.—Awarding of
Costs and Certain Fees
The Service provides an inflation adjustment to
the hourly limit on attorney fees that may be
awarded in a judgment or settlement of an adminis-
trative or judicial proceeding concerning the deter-
mination, collection, or refund of tax, interest, or
penalty for calendar year 2002. See Rev. Proc.
2001–59, page 623.
Section 7702B.—Treatment
of Qualified Long-Term Care
Insurance
The Service provides an inflation adjustment to
the stated dollar amount of theper diemlimitation
regarding periodic payments received under a quali-
fied long-term care insurance contract or periodic
payments received under a life insurance contract
that are treated as paid by reason of the death of a
chronically ill individual for calendar year 2002. See
Rev. Proc. 2001–59, page 623.
December 26, 20016122001–52 I.R.B.

Part III. Administrative, Procedural, and Miscellaneous
Proposed Revenue Procedure
Regarding the Cash Method
Notice 2001–76
Pursuant to the discretion granted the
Commissioner of Internal Revenue under
§§446 and 471 of the Internal Revenue
Code, this notice provides a proposed
revenue procedure that will allow qualify-
ing small business taxpayers with gross
receipts of less than $10 million to use
the cash receipts and disbursements
method of accounting as described in the
proposed revenue procedure with respect
to eligible trades or businesses. This pro-
posed revenue procedure is intended to
reduce the administrative and tax compli-
ance burdens on certain small business
taxpayers and to minimize disputes
between the Internal Revenue Service
(Service) and these taxpayers regarding
the requirement to use an accrual method
of accounting under§446 of the Code
because of the requirement to account for
inventories under§471. Although this
revenue procedure is being issued in pro-
posed form, taxpayers may rely on it for
taxable years ending on or after Decem-
ber 31, 2001.
The Service believes that§263A will
have limited applicability to resellers and
producers with gross receipts of
$10,000,000 or less because of the excep-
tion for resellers in§263A(b)(2)(B) and
the indirect cost exception for producers
in§1.263A–2(b)(3)(iv). However, the
Service requests comments on any addi-
tional relief that should be considered for
taxpayers with gross receipts of
$10,000,000 or less to relieve any admin-
istrative burden of§263A. The Service
also welcomes other comments on the
proposed revenue procedure provided in
this notice. Comments should be submit-
ted by March 1, 2002, either to:
Internal Revenue Service
P. O. Box 7604
Ben Franklin Station
Washington, DC 20044
Attn: CC:PA:T:CRU (ITA)
Room 5529
or electronically via the Service internet
site at:
Notice.Comments@m1.irscounsel.treas.gov
(the Service Comments e-mail address).
Rev. Proc. 2001–XX
SECTION 1. PURPOSE
In order to reduce the administrative
and tax compliance burdens on certain
small business taxpayers and to minimize
disputes between the Internal Revenue
Service (Service) and small business tax-
payers regarding the requirement to use
an accrual method of accounting (accrual
method) under§446 of the Internal Rev-
enue Code because of the requirement to
account for inventories under§471, this
revenue procedure provides that the Com-
missioner of Internal Revenue will exer-
cise his discretion to allow qualifying
small business taxpayers to use the cash
receipts and disbursements method of
accounting (cash method) as described in
this revenue procedure with respect to eli-
gible trades or businesses. This revenue
procedure also provides the procedures
for these qualifying small business tax-
payers to obtain automatic consent to
change to the cash method for such trades
or businesses.
SECTION 2. BACKGROUND
.01 Section 446(a) provides that tax-
able income must be determined under
the method of accounting on the basis of
which the taxpayer regularly computes
income in keeping its books.
.02 Section 446(c) generally allows a
taxpayer to select the method of account-
ing it will use to compute its taxable
income. A taxpayer is entitled to adopt
any one of the permissible methods for
each separate trade or business, including
the cash method and an accrual method,
subject to certain restrictions. For
example,§446(b) provides that the
selected method must clearly reflect
income. In addition,§1.446–1(c)(2)(i) of
the Income Tax Regulations requires that
a taxpayer use an accrual method with
regard to purchases and sales of merchan-
dise whenever§471 requires the taxpayer
to account for inventories, unless other-
wise authorized by the Commissioner
under§1.446–1(c)(2)(ii). Under§1.446–
1(c)(2)(ii), the Commissioner has the
authority to permit a taxpayer to use a
method of accounting that clearly reflects
income even though the method is not
specifically authorized by the regulations.
.03 Section 447 generally requires the
taxable income from farming of a C cor-
poration engaged in the trade or business
of farming, or a partnership engaged in
the trade or business of farming with a C
corporation partner, to be determined
using an accrual method, unless the C
corporation meets the $1,000,000
($25,000,000 for family corporations)
gross receipts test.
.04 Section 448 generally prohibits the
use of the cash method by a C corpora-
tion (other than a farming business and a
qualified personal service corporation)
and a partnership with a C corporation
partner (other than a farming business and
a qualified personal service corporation),
unless the C corporation or partnership
with a C corporation partner meets the
$5,000,000 gross receipts test. Section
448 also prohibits tax shelters from using
the cash method.
.05 The cash method generally
requires an item of income to be included
in income when actually or constructively
received and permits a deduction for an
expense when paid. Section 1.446–
1(c)(1)(i). Other provisions of the Code
or regulations applicable to cash method
taxpayers may change these general rules,
including, for example,§263 (requiring
the capitalization of expenses paid out for
a new building or for permanent improve-
ments or betterments made to increase the
value of any property or estate, or for
restoring property or making good the
exhaustion of property for which an
allowance is or has been made);§263A
(requiring capitalization of direct and
allocable indirect costs of real or tangible
personal property produced by a taxpayer
or real or personal property that is
acquired by a taxpayer for resale);§460
(requiring the use of the percentage-of-
completion method for certain long-term
contracts); and§475 (requiring dealers in
securities to mark securities to market).
2001–52 I.R.B613December 26, 2001

.06 Section 471 provides that when-
ever, in the opinion of the Secretary, the
use of inventories is necessary to clearly
determine the income of the taxpayer,
inventories must be taken by the taxpayer.
Section 1.471–1 requires a taxpayer to
account for inventories when the produc-
tion, purchase, or sale of merchandise is
an income-producing factor in the taxpay-
er’s business.
.07 Section 1.162–3 requires taxpayers
carrying materials and supplies (other
than incidental materials and supplies) on
hand to deduct the cost of materials and
supplies only in the amount that they are
actually consumed and used in operations
during the taxable year.
.08 Section 263A generally requires
direct costs and an allocable portion of
indirect costs of certain property pro-
duced or acquired for resale by a taxpayer
to be included in inventory costs, in the
case of property that is inventory, or to be
capitalized, in the case of other property.
However, resellers with gross receipts of
$10,000,000 or less are not required to
capitalize costs under§263A and cer-
tain producers with $200,000 or less of
indirect costs are not required to capi-
talize certain costs under§263A. See
§§263A(b)(2)(B) and 1.263A–
2(b)(3)(iv).
.09 Sections 446(e) and 1.446–1(e)
state that, except as otherwise provided, a
taxpayer must secure the consent of the
Commissioner before changing a method
of accounting for federal income tax pur-
poses. Section 1.446–1(e)(3)(ii) autho-
rizes the Commissioner to prescribe
administrative procedures setting forth
the limitations, terms, and conditions
deemed necessary to permit a taxpayer to
obtain consent to change a method of
accounting in accordance with§446(e).
.10 Section 481(a) requires those
adjustments necessary to prevent amounts
from being duplicated or omitted to be
taken into account when the taxpayer’s
taxable income is determined under a
method of accounting different from the
method used to determine taxable income
for the preceding taxable year.
SECTION 3. SCOPE
.01 Applicability. This revenue proce-
dure applies to a qualifying small busi-
ness taxpayer. A qualifying small business
taxpayer is any taxpayer with“average
annual gross receipts”of more than
$1,000,000 but less than or equal to
$10,000,000 that is not prohibited from
using the cash method under§448.
.02 Taxpayers not within the scope of
this revenue procedure.
(1) Notwithstandingsection 3.01 of
this revenue procedure, this revenue
procedure does not apply to a farm-
ingbusiness (within the meaning of
§263A(e)(4)) of a qualifying small busi-
ness taxpayer. If a qualifying small busi-
ness taxpayer is engaged in the trade or
business of farming, this revenue proce-
dure may apply to the taxpayer’s non-
farming trades or businesses, if any. A
taxpayer engaged in the trade or business
of farming generally is allowed to use the
cash method for any farming business,
unless the taxpayer is required to use an
accrual method under§447 or is pro-
hibited from using the cash method under
§448.
(2) Although this revenue procedure
does not apply to a taxpayer with average
annual gross receipts of $1,000,000 or
less, such taxpayer generally is allowed to
use the cash method pursuant to Rev.
Proc. 2001–10 (2001–2 I.R.B. 272).
SECTION 4. QUALIFYING SMALL
BUSINESS TAXPAYER EXCEPTION
.01 Pursuant to his discretion under
§§446 and 471, and to simplify the
recordkeeping requirements of a qualify-
ing small business taxpayer, the Commis-
sioner, as a matter of administrative con-
venience, will allow a qualifying small
business taxpayer to use the cash method
as described in this revenue procedure for
a trade or business described in this sec-
tion 4.01 (eligible trade or business). No
inference is intended regarding whether a
taxpayer that does not satisfy the qualify-
ing small business taxpayer exception of
this section 4.01 is permitted to use the
cash method.
(1) A qualifying small business tax-
payer that reasonably determines that its
principal business activity (i.e., the activ-
ity from which the taxpayer derived the
largest percentage of its gross receipts)
for its prior taxable year is described in a
North American Industry Classification
System (“NAICS”) code other than one
of the ineligible codes listed below may
use the cash method as described in this
revenue procedure for all of its trades or
businesses. The ineligible NAICS codes
are as follows:
(a) mining activities within the mean-
ing of NAICS codes 211 and 212;
(b) manufacturing within the meaning
of NAICS codes 31–33;
(c) wholesale trade within the meaning
of NAICS code 42;
(d) retail trade within the meaning of
NAICS codes 44–45; and,
(e) information industries within the
meaning of NAICS codes 5111 and 5122.
Information regarding the NAICS codes
can be found atwww.census.gov.Visitors
to the site should select“Subjects A to Z,”
followed by“N,”and then should select
“NAICS (North America).”Taxpayers
also may find a partial list of NAICS
codes, described as“Principal Business
Activity Codes,”in the instructions to
their tax return forms.
(2) A qualifying small business tax-
payer may use the cash method as
described in this revenue procedure for all
of its trades or businesses if its principal
business activity is the provision of ser-
vices, including the provision of property
incident to those services. For example, a
publisher whose principal business activ-
ity is the sale of advertising space in its
publications is eligible to use the cash
method as described in this revenue pro-
cedure, notwithstanding that the taxpay-
er’s principal business activity is
described in an ineligible NAICS code.
(3) A qualifying small business tax-
payer may use the cash method as
described in this revenue procedure (sub-
ject to the potential application of§460)
for all of its trades or businesses if its
principal business activity is the fabrica-
tion or modification of tangible personal
property upon demand in accordance with
customer design or specifications. For
purposes of this rule, tangible personal
property is not fabricated or modified in
accordance with customer design or
specifications if the customer merely
chooses among pre-selected options (e.g.,
size, color, or materials) offered by the
taxpayer or if the taxpayer must make
only minor modifications to its basic
design to meet the customer’s specifica-
tions.
(4) Notwithstanding the taxpayer’s
principal business activity, a qualifying
December 26, 20016142001–52 I.R.B.

small business taxpayer may use the cash
method as described in this revenue pro-
cedure with respect to any separate and
distinct trade or business whose principal
business activity is not described in an
ineligible NAICS code in section
4.01(1)(a) through (e) or is described in
either section 4.01(2) or section 4.01(3).
No trade or business will be considered
separate and distinct unless a complete
and separable set of books and records
is kept for such trade or business. See
§1.446–1(d)(2).
.02 Notwithstanding§1001 and the
regulations thereunder, qualifying taxpay-
ers that use the cash method for an eli-
gible trade or business under section 4.01
of this revenue procedure include
amounts in income attributable to open
accounts receivable (i.e., receivables due
in 120 days or less) as amounts are actu-
ally or constructively received. However,
§1001 may be applicable to other trans-
actions.
.03 Qualifying small business taxpay-
ers that are permitted to use the cash
method for an eligible trade or business
under section 4.01 of this revenue proce-
dure and that do not want to account for
inventories under section 471 must treat
all inventoriable items (e.g., items pur-
chased for resale to customers and raw
materials purchased for use in producing
finished goods) in such trade or busi-
ness in the same manner as materials
and supplies that are not incidental under
§1.162–3. Items that would be accounted
for as incidental materials and supplies
for purposes of§1.162–3 may still be
accounted for in that manner. Whether an
item is purchased for resale (and thus
must be accounted for as a non-incidental
material and supply) or is purchased to
provide to customers incident to services
(and thus may be accounted for as either
an incidental or a non-incidental material
and supply depending on the facts and
circumstances) must be determined under
general tax principles.
.04 Under§1.162–3, materials and
supplies that are not incidental are
deductible only in the year in which they
are actually consumed and used in the
taxpayer’s business. For purposes of this
revenue procedure, inventoriable items
that are treated as materials and supplies
that are not incidental are consumed and
used in the year the qualifying small busi-
ness taxpayer sells the items to a cus-
tomer. Thus, under the cash method as
described in this revenue procedure, the
cost of such inventoriable items are
deductible only in that year, or in the year
in which the taxpayer actually pays for
the goods, whichever is later. A qualifying
small business taxpayer may use any rea-
sonable method to determine the amount
of the allowable deduction (e.g., first in,
first out or average cost) provided that the
method is used consistently.
SECTION 5. DEFINITIONS
.01 Average annual gross receipts. A
taxpayer has average annual gross
receipts of $10,000,000 or less if, for
each prior taxable year ending on or after
December 31, 2000, the taxpayer’s aver-
age annual gross receipts for the
3–taxable-year period ending with the
applicable prior taxable year does not
exceed $10,000,000.
.02 Gross receipts. Gross receipts is
defined consistent with§1.448–
1T(f)(2)(iv) of the Temporary Income Tax
Regulations. Thus, gross receipts for a
taxable year equal all receipts derived
from all of a taxpayer’s trades or busi-
nesses that must be recognized under the
method of accounting actually used by
the taxpayer for that taxable year for fed-
eral income tax purposes. For example,
gross receipts include total sales (net of
returns and allowances), all amounts
received from services, interest, divi-
dends, and rents. However, gross receipts
do not include amounts received by the
taxpayer with respect to sales tax or other
similar state and local taxes if, under the
applicable state or local law, the tax is
legally imposed on the purchaser of the
good or service, and the taxpayer merely
collects and remits the tax to the taxing
authority.See also§448(c)(3)(C).
.03 Aggregation of gross receipts. For
purposes of computing gross receipts, all
taxpayers treated as a single employer
under subsection (a) or (b) of§52 or
subsection (m) or (o) of§414 (or that
would be treated as a single employer
under these sections if the taxpayers had
employees) will be treated as a single tax-
payer. However, when transactions occur
between taxpayers that are treated as a
single taxpayer by the previous sentence,
gross receipts arising from these transac-
tions will not be treated as gross receipts
for purposes of the average annual gross
receipts limitation.See§§448(c)(2) and
1.448–1T(f)(2)(ii).
.04 Taxpayer not in existence for 3
taxable years. If a taxpayer has been in
existence for less than the 3–taxable-year
period referred to in section 5.01 of this
revenue procedure, the taxpayer must
determine its average annual gross
receipts for the number of years (includ-
ing short taxable years) that the taxpayer
has been in existence.See§448(c)(3)(A).
.05 Treatment of short taxable years.
In the case of a short taxable year, a tax-
payer’s gross receipts must be annualized
by multiplying the gross receipts for the
short taxable year by 12 and then dividing
the result by the number of months in the
short taxable year.See§§448(c)(3)(B)
and 1.448–1T(f)(2)(iii).
.06 Treatment of predecessors. Any
reference to taxpayer in this section 5
includes a reference to any predecessor of
that taxpayer.See§448(c)(3)(D).
SECTION 6. EXAMPLES
Assume for purposes of the following
examples that the taxpayers are not pro-
hibited from using the cash method under
§448. Also assume for purposes of
examples 2 through 10 that the taxpayers
have average annual gross receipts of
$10,000,000 or less.
Example 1.Taxpayer is a calendar year plumb-
ing contractor that installs plumbing fixtures in cus-
tomers’homes and businesses. Taxpayer reasonably
determines that its principal business activity is con-
struction, which is described in NAICS code 23.
Taxpayer’s gross receipts at the end of the three
preceding taxable years are:
Gross receipts
1998:$ 6,000,000
1999:9,000,000
2000:12,000,000
Taxpayer’s average annual gross receipts for the
3–taxable year-period ending in the 2000 taxable
year is $9,000,000 ($6,000,000 + $9,000,000 +
$12,000,000 = $27,000,000/3). Taxpayer may use
the cash method for all its trades or businesses pur-
suant to this revenue procedure for its 2001 taxable
year because its average annual gross receipts for
each prior taxable year ending on or after December
31, 2000, is $10,000,000 or less and its principal
business activity is not described in the ineligible
NAICS codes listed in section 4.01(1)(a)–(e).
2001–52 I.R.B615December 26, 2001

Example 2.Taxpayer is a plumbing contractor
that installs plumbing fixtures in customers’homes
and businesses. Taxpayer also has a store that sells
plumbing equipment to homeowners and other
plumbers who visit the store. Taxpayer derives 60
percent of its total receipts from plumbing installa-
tion (including amounts charged for parts and fix-
tures used in installation) and 40 percent of its total
receipts from the sale of plumbing equipment
through its store. Taxpayer reasonably determines
that its principal business activity is plumbing
installation, which is included in the construction
activities described in NAICS code 23. Taxpayer
may use the cash method for both business activities
because Taxpayer is a qualifying small business tax-
payer whose principal business activity—plumbing
installation—is not described in the ineligible
NAICS codes listed in section 4.01(a)–(e).
Example 3.Same asExample 2, except Taxpayer
derives 40 percent of its total receipts from plumb-
ing installation (including amounts charged for parts
and fixtures used in installation) and 60 percent of
its total receipts from the sale of plumbing equip-
ment through its store. Taxpayer’s principal business
activity is described in the ineligible NAICS code
44. Moreover, Taxpayer’s principal business activity
is neither the provision of services under section
4.01(2) nor the fabrication or modification of tan-
gible personal property under section 4.01(3).
Therefore, Taxpayer may not use the cash method
under this revenue procedure for its plumbing retail
business. Taxpayer may use the cash method for its
plumbing installation business if the Taxpayer keeps
complete and separate books and records for its
plumbing installation business and its plumbing
retail business. If Taxpayer keeps one set of books
and records for its plumbing installation business
and its plumbing retail business, then Taxpayer is
required to use an accrual method for both busi-
nesses.
Example 4. Taxpayer sells refrigerators. As part
of the sale price, Taxpayer will deliver the refrigera-
tor to the customer and confirm that the refrigerator
is functioning properly at the customer’s site. Tax-
payer’s principal business activity is described in
the ineligible NAICS code 44. Moreover, taxpayer’s
principal business activity is not the provision of
services under section 4.01(2). Taxpayer does not
provide refrigerators incident to the performance of
services. Rather, Taxpayer performs certain services
(delivery and confirmation of functionality) incident
to the sale of refrigerators. In addition, Taxpayer
does not fabricate or modify tangible personal prop-
erty under section 4.01(3). Taxpayer may not use the
cash method under this revenue procedure.
Example 5. Taxpayer is a sofa manufacturer that
only produces sofas upon receipt of a customer
order. Customers are allowed to pick among 150
different fabrics offered by the taxpayer or to pro-
vide their own fabric, which the taxpayer will use to
finish the customer’s sofa. Taxpayer’s principal
business activity is described in the ineligible
NAICS code 33. Taxpayer does not provide sofas
incident to the performance of services for purposes
of section 4.01(2). Rather, Taxpayer performs cer-
tain services (upholstering) incident to the sale of
sofas. Taxpayer also does not fabricate or modify
tangible personal property for purposes of section
4.01(3) because customers merely choose among
pre-selected options offered by Taxpayer and Tax-
payer only makes minor modifications to the basic
design of its sofa. Taxpayer may not use the cash
method under this revenue procedure.
Example 6. Taxpayer makes tools based entirely
on specific designs and specifications provided to it
by customers in their orders. Taxpayer’s principal
business activity is described in the ineligible
NAICS code 33. However, Taxpayer’s principal
business activity is the fabrication of tangible per-
sonal property for purposes of section 4.01(3). Tax-
payer may use the cash method under this rev-
enue procedure (subject to the potential application
of§460).
Example 7. Taxpayer is a roofing contractor that
is a qualifying small business taxpayer eligible to
use the cash method under sections 3 and 4 of this
revenue procedure. Taxpayer, who uses the calendar
year, chooses to use the cash method as described in
this revenue procedure and to not account for inven-
tories under§471. Taxpayer enters into a contract
with a homeowner in December 2001 to replace the
homeowner’s roof. Taxpayer purchases roofing
shingles from a local supplier and has them deliv-
ered to the homeowner’s residence. Taxpayer pays
the supplier $5,000 for the shingles upon their deliv-
ery later that month. Taxpayer replaces the home-
owner’s roof in December 2001, and gives the
homeowner a bill for $15,000 at that time. Taxpayer
receives a check from the homeowner in January
2002.
Taxpayer deducts the $5,000 cost of the shingles
on its 2001 Federal income tax return (the year the
shingles are paid for by Taxpayer and provided to
the customer in connection with the performance of
roofing services). Taxpayer includes the $15,000 in
income in 2002 when it receives the check from the
homeowner.
Example 8. The facts are the same as inExample
7, except that Taxpayer does not replace the roof
until January 2002 and is not paid until March 2002.
Because the shingles are not used until 2002, their
cost can only be deducted on Taxpayer’s 2002 Fed-
eral income tax return notwithstanding that Tax-
payer paid for the shingles in 2001. Thus, on its
2002 return, Taxpayer must report $15,000 of
income and $5,000 of deductions.
Example 9. Taxpayer, a qualifying small busi-
ness taxpayer, elects to use the cash method as
described in this revenue procedure. Taxpayer is a
speculative builder of houses that are built on land
it owns. In 2001, Taxpayer builds a house using
various items such as lumber, piping, and metal fix-
tures that it had paid for in 2000. In 2002, Taxpayer
sells the house to a buyer. Because the house is real
property held for sale by Taxpayer, it is not an
inventoriable item under section 4.03 of this revenue
procedure. Thus, the taxpayer may not account for
the items used to build the house as non-incidental
materials and supplies under§1.162–3. Rather, Tax-
payer must capitalize the costs of the lumber, pip-
ing, metal fixtures and other goods used by Tax-
payer to build the house. Upon the sale of the house
in 2002, the costs capitalized by Taxpayer will be
offset against the house sales price to determine
Taxpayer’s gain or loss from the sale.
Example 10. The facts are the same as in
Example 9, except that Taxpayer builds houses on
land its customers own. Because Taxpayer does not
own the house, the lumber, piping, metal fixtures
and other goods used by Taxpayer in the provision
of construction services are not real property held
for sale. Taxpayer must deduct the cost of the lum-
ber, piping, metal fixtures and other non-incidental
materials and supplies that are used by it to build the
house in 2001 (the year those items were used by
Taxpayer to build the house) notwithstanding that
Taxpayer had paid for the items in 2000. Taxpayer
will report income it receives from its customer as
the income is actually or constructively received.
SECTION 7. CHANGE IN
ACCOUNTING METHOD
.01 In general. Any change in a tax-
payer’s method of accounting pursuant to
this revenue procedure is a change in
method of accounting to which the provi-
sions of§§446 and 481 and the regula-
tions thereunder apply.
.02 Automatic change for taxpayers
within the scope of this revenue proce-
dure.
(1) Automatic change to the cash
method. A qualifying small business tax-
payer that wants to use the cash method
as described in this revenue procedure for
an eligible trade or business must follow
the automatic change in accounting
method provisions of Rev. Proc. 99–49
(1999-2 C.B. 725) (or its successor) with
the following modifications:
(a) The scope limitations in section
4.02 of Rev. Proc. 99–49 do not apply.
However, if the taxpayer is under exami-
nation, before an appeals office, or before
a federal court with respect to any income
tax issue, the taxpayer must provide a
copy of the Form 3115,Application for
Change in Accounting Method,to the
examining agent(s), appeals officer, or
counsel for the government, as appropri-
ate, at the same time that it files the copy
of the Form 3115 with the national office.
The Form 3115 must contain the name(s)
and telephone number(s) of the examin-
ing agent(s), appeals officer, or counsel
for the government, as appropriate;
(b) Taxpayers filing Form 3115 for a
change in method of accounting under
this revenue procedure must complete all
applicable parts of the form but need not
complete Part II of Schedule A of Form
3115. Specifically, Part II, line 17
(regarding information on gross receipts
in previous years) and Part III (regarding
the§481(a) adjustment) must be com-
pleted. Taxpayers should write“Filed
under Rev. Proc. 2001–XX”at the top of
their Form 3115.
December 26, 20016162001–52 I.R.B.

(2) Automatic change to section
1.162–3. A qualifying taxpayer that does
not want to account for inventories under
§471 of an eligible trade or business
must make any necessary change from
the taxpayer’s current method of account-
ing for inventoriable items in that trade or
business to treat such inventoriable items
in the same manner as materials and sup-
plies that are not incidental under section
1.162–3. For purposes of such a change,
the rules of section 6.02(1) of this rev-
enue procedure apply. Taxpayers may file
a single Form 3115 for both changes
described in sections 7.02(1) and 7.02(2).
.03 Section 481(a) adjustment. The net
amount of the§481(a) adjustment com-
puted under this revenue procedure must
take into account both increases and
decreases in the applicable account bal-
ances such as accounts receivable,
accounts payable, and inventory. For
example, the§481(a) adjustment may
include the difference resulting from
changing from taking inventory accounts
under§471 to treating the goods as mate-
rials and supplies that are not incidental
under§1.162–3.
.04 Taxpayers not within the scope of
this revenue procedure. A taxpayer that
ceases to qualify for the qualifying small
business taxpayer exception described in
section 4 of this revenue procedure for
any trade or business and otherwise is
required to use an accrual method for
that trade or business must change to
an accrual method (and, if applicable
an inventory method that complies with
§471) for that trade or business using
either the automatic change in accounting
method provisions of section 5.01 of the
APPENDIX to Rev. Proc. 99–49, if appli-
cable, or the advance consent provisions
of Rev. Proc. 97–27 (1997–1 C.B. 680)
(or its successor).
SECTION 8. EFFECT ON OTHER
DOCUMENTS
Rev. Proc. 99–49 (1999–2 C.B. 725) is
modified and amplified to include this
automatic change in section 10 of the
APPENDIX.
SECTION 9. EFFECTIVE DATE
This revenue procedure is effective for
taxable years ending on or after Decem-
ber 31, 2001. However, the Service will
not challenge a taxpayer’s use of the
cash method under§446, or a taxpay-
er’s failure to account for inventories
under§471, for a trade or business in an
earlier year if the taxpayer, for that year,
was a qualifying small business taxpayer
as described in section 3 of this revenue
procedure and the taxpayer was eligible
to use the cash method for such trade or
business under section 4.01 of this rev-
enue procedure.
CONTACT INFORMATION
For further information regarding this
revenue procedure, contact Cheryl Lynn
Oseekey of the Office of Associate Chief
Counsel (Income Tax and Accounting) at
(202) 622–4970 (not a toll-free call).
Weighted Average Interest
Rate Update
Notice 2001–80
Notice 88–73 provides guidelines for
determining the weighted average interest
rate and the resulting permissible range of
interest rates used to calculate current
liability for the purpose of the full fund-
ing limitation of§412(c)(7) of the Inter-
nal Revenue Code as amended by the
Omnibus Budget Reconciliation Act of
1987 and as further amended by the Uru-
guay Round Agreements Act, Pub. L.
103–465 (GATT).
The average yield on the 30–year
Treasury Constant Maturities for Novem-
ber 2001 is 5.12 percent.
The following rates were determined
for the plan years beginning in the month
shown below.
MonthYear
Weighted
Average
90% to 105%
Permissible
Range
90% to 110%
Permissible
Range
December20015.725.15 to 6.015.15 to 6.29
DRAFTING INFORMATION
The principal author of this notice is
Todd Newman of the Employee Plans,
Tax Exempt and Government Entities
Division. For further information regard-
ing this notice, please call Mr. Newman at
(202) 283–9888 (not a toll-free number).
Section 529 Programs
Notice 2001–81
This notice provides guidance regard-
ing certain recordkeeping, reporting, and
other requirements applicable to qualified
tuition programs described in§529 of the
Internal Revenue Code, in light of certain
amendments made to§529 by the Eco-
nomic Growth and Tax Relief Reconcilia-
tion Act of 2001 (Pub. L. No. 107–16,
115 Stat. 38) (EGTRRA).
Among other changes to§529,
EGTRRA: (1) expandsthedefinition
of“qualified tuition program”to include
certain prepaid tuition programs estab-
lished and maintained by one or more eli-
gible educational institutions; (2) pro-
vides an exclusion from gross income for
distributions from a State§529 program
(and, beginning in 2004, a prepaid tuition
program established and maintained by
one or more eligible educational institu-
tions) which are used to pay for qualified
2001–52 I.R.B617December 26, 2001

higher education expenses of the desig-
nated beneficiary; (3) repeals the require-
ment that a§529 program impose a more
thande minimispenalty on any refund of
earnings not used for qualified higher
education expenses of the beneficiary;
and (4) replaces that penalty with an addi-
tional 10–percent tax on the amount of a
distribution from a§529 program that is
includible in gross income (with certain
exceptions). In general, these amend-
ments are effective for taxable years
beginning after December 31, 2001.
1
Inlight ofthesechanges, and to
give§529 programs adequate time to
implement appropriate recordkeeping and
reporting procedures, the Internal Rev-
enue Service and the Treasury Depart-
ment are issuing this guidance, which
they intend to incorporate in final regula-
tions under§529. Section 529 programs
and their participants may rely on this
notice pending the issuance of final regu-
lations under§529.
a. Imposition of a penalty and verifica-
tion of purpose of a distribution.
As currently in effect (prior to the
effective date of EGTRRA),§529(b)(3)
provides that a program is not treated as
a qualified§529 program unless it
imposes a more thande minimispenalty
on any refund of earnings that is not: (a)
used for qualified higher education
expenses of the designated beneficiary;
(b) made on account of the death or dis-
ability of the designated beneficiary; or
(c) made on account of certain scholar-
ships or other educational assistance
received by the beneficiary. Prop. Treas.
Reg.§1.529–2(e) provides rules onde
minimispenalties and procedures for veri-
fying the use of distributions and impos-
ing and collecting penalties.
EGTRRA repeals§529(b)(3), effec-
tive for taxable years beginning after
December 31, 2001. Therefore, the final
regulations under§529 will provide that,
with respect to any distributions made
after December 31, 2001, a§529 pro-
gram will no longer be required to verify
how distributions are used or to collect
any penalty. However, with respect to any
distributions made on or before Decem-
ber 31, 2001, a§529 program must con-
tinue to verify whether the distribution is
used for qualified higher education
expenses of the beneficiary and to collect
a more thande minimispenalty on non-
qualified distributions.
b. Reporting of distributions.
Section 529(d) provides that a§529
program shall make reports regarding the
program to the Internal Revenue Service
and to designated beneficiaries regarding
contributions, distributions, and such
other matters as the Internal Revenue
Servicemayrequire. Prop.Treas.
Reg.§1.529–4 requires a State tuition
program to report on Form 1099–G, Cer-
tain Government Payments, the earnings
portion of any distribution made during
the year, together with other information
such as the name, address and TIN of the
distributee. A§529 program must furnish
a statement to the distributee on or before
January 31st of the year following the
calendar year in which the distribution is
made. In addition, a§529 program must
file Form 1099–G on or before February
28th of the year following the calendar
year in which the distribution is made.
These reporting requirements continue
in effect for distributions made in 2001.
Thus, with respect to any distributions
made in 2001, a§529 program must fur-
nish statements to the distributees on or
before January 31, 2002, and file returns
on Form 1099–G on or before February
28, 2002.
In light of the expansion of§529 to
include prepaid tuition programs estab-
lished and maintained by one or more eli-
gible educational institutions (which may
be private institutions), the Internal Rev-
enue Service will issue a new form, Form
1099–Q, for taxable years beginning after
December 31, 2001. A copy of Form
1099–Q is available on the IRS website at
www.irs.gov.
c. Calculation of earnings.
1. In general.
Section 529(c)(3)(A) provides that a
distribution from a§529 program is
includible in the gross income of the dis-
tributee in the manner as provided under
§72, to the extent not excluded from
gross income under any other provision
of Chapter 1 of the Code. Section
529(c)(3)(D)(iii) provides that, except to
the extent provided by the Secretary, the
value of the contract, income on the con-
tract, and the investment in the contract
are to be computed as of the close of the
calendar year.
2. Recordkeeping requirements with
respect to rollover contributions.
Section 529(b)(3)
2
states that a pro-
gram must provide a separate accounting
for each designated beneficiary. Prop.
Treas. Reg.§1.529–2(f) requires a§529
program to maintain records with respect
to the designated beneficiary of each
account showing the total investment in
the account and any earnings attributable
thereto.
In the case of a contribution to a§529
account that represents a transfer from a
Coverdell education savings account
described in§530(b)(2)(B), a transfer of
proceeds of a qualified U.S. Savings
Bond described in§135(c)(2)(C), or a
“rollover”of amounts from another§529
program account (each, a“rollover contri-
bution”), the recipient§529 program
must determine the basis and earnings
portions of the amounts contributed. (See
Prop. Treas. Reg.§1.529–3(a)(2), which
provides that the earnings portion of the
rollover amount must be added to the
earnings of the account that received the
contribution.)
Although this requirement was not
changed by EGTRRA,§529 programs
have indicated that there is some confu-
sion about the requirement that a§529
program determine and maintain records
that reflect the basis and earnings portions
of any rollover contribution. Accordingly,
it is expected that final regulations will
clarify that, when accepting a contribu-
tion, a§529 program must ask whether
the contribution is a rollover contribution
from a Coverdell education savings
account, a qualified U.S. Savings Bond,
or another§529 program. If the contribu-
tion is a rollover contribution, the§529
program must determine the earnings por-
tion of the contribution, and add that
amount to the earnings recorded in the
account to which the rollover contribution
1
Unless otherwise indicated, references herein are to§529 of the Internal Revenue Code, as amended by EGTRRA.
2
Section 529(b)(4) was renumbered as§529(b)(3) by EGTRRA.
December 26, 20016182001–52 I.R.B.

is made. Until the§529 program receives
appropriate documentation showing the
earnings portion of the contribution, the
program must treat the entire amount of
the contribution as earnings in the§529
account receiving the distribution. For
this purpose,“appropriate documenta-
tion”means: (1) in the case of a rollover
contribution from a Coverdell education
savings account, an account statement
issued by the financial institution that
acted as trustee or custodian of the educa-
tion savings account that shows basis and
earnings in the account; (2) in the case of
a rollover contribution from the redemp-
tion of qualified U.S. Savings Bonds, an
account statement or Form 1099-INT
issued by the financial institution that
redeemed the bonds showing interest
from the redemption of the bonds; and (3)
in the case of a rollover contribution from
another§529 program, a statement
issued by the distributing§529 program
that shows the earnings portion of the dis-
tribution.
3. Rollover statement between § 529
programs.
In the case of any direct transfer (i.e.,
trustee-to-trustee rollover) between§529
programs, the distributing program must
provide to the receiving program a state-
ment setting forth the earnings portion of
the rollover distribution within 30 days
after the distribution or by January 10th
of the year following the calendar year in
which the rollover occurred, whichever is
earlier. This rule is effective for direct
transfers between§529 programs that
occur on or after January 1, 2002.
4. Timing of earnings calculation.
Consistent with§529(c)(3)(D), the
proposed regulations provide that the
earnings portion of any distribution is
determined by applying an earnings ratio,
generally the earnings allocable to an
account as of the close of the year divided
by the total account balance as of the
close of the calendar year, determined by
adding back the amount of all distribu-
tions made during the year. See Prop.
Treas. Reg.§1.529–1(c).
In response to comments received on
theproposed regulations, andconsis-
tent with the Secretary’s authority under
§529(c)(3)(D)(iii) to adopt a different
rule, the Treasury Department and the
Internal Revenue Service expect that final
regulations will revise the time for deter-
mining the earnings portion of any distri-
bution from a§529 account. It is
expected that final regulations will pro-
vide that, effective for distributions made
after December 31, 2002, programs will
be required to determine the earnings por-
tion of each distribution as of the date of
distribution. In the case of direct transfers
between§529 programs, this requirement
is effective for distributions made after
December 31, 2001. In the case of any
State program for which this change
would require legislation and whose State
legislature has a biennial legislative ses-
sion, the program will have until January
1, 2004, to conform to this method of cal-
culating earnings.
5. Aggregation of Accounts.
Section 529(c)(3)(D)(i) provides that
to the extent provided by the Secretary,
all§529 programs of which an individual
is a designated beneficiary shall be
treated as one program. Prop. Treas. Reg.
§1.529–3(d) provides that all accounts
maintained by a§529 program for the
benefit of a designated beneficiary shall
be treated as a single account for pur-
poses of calculating the earnings portion
of any distribution. Based on comments
received on the proposed regulations, it is
expected that the final regulations will
provide that only accounts maintained by
a§529 program and having the same
account owner and the same designated
beneficiary must be aggregated for pur-
poses of computing the earnings portion
of any distribution. For this purpose, a
State that has both a prepaid§529 pro-
gram and a§529 savings program should
consider each program separately for pur-
poses of calculating the earnings portion
of any distribution from either the prepaid
or the savings program. These changes
will apply for purposes of the earnings
calculation only, and will not affect the
application of§529(b)(6) (prohibition on
excess contributions)
3
. The§529(b)(6)
limit will continue to be applied based
upon all accounts, both savings and pre-
paid, in programs established and main-
tained by the State for the benefit of the
same designated beneficiary.
Comments on Future Guidance Invited
The Internal Revenue Service invites
comments on the matters described in
this notice and any other matters relating
to§529 and the regulations thereunder.
Please send written comments by March
25, 2002, to: CC:ITA:RU (Notice 2001–
81), room 5226, Internal Revenue Ser-
vice, POB 7604, Ben Franklin Station,
Washington, DC 20044. Submission may
be hand-delivered Monday through Fri-
day between the hours of 8 a.m. and 5
p.m. to CC:ITA:RU (Notice 2001–81),
Courier’s Desk, Internal Revenue Ser-
vice,1111Constitution Avenue, NW,
Washington, DC. Alternatively, taxpayers
may submit comments electronically via
the Internet by selecting the“Tax Regs”
option on the IRS Home Page, or by sub-
mitting comments directly to the IRS
Internet site athttp://www.irs.gov/prod/
tax_regs/regslist.html. Comments will be
available for public inspection.
DRAFTING INFORMATION
The principal author of this notice is
Monice Rosenbaum of the Office of Divi-
sion Counsel/Associate Chief Counsel
(Tax Exempt and Government Entities).
For further information regarding this
notice, contact Ms. Rosenbaum at (202)
622–6070 (not a toll-free number).
Expansion of Safe Harbor
Provisions Under Notice
88–129
Notice 2001–82
PURPOSE
This notice amplifies and modifies
Notice 88–129 (1988–2 C.B. 541) as
modified and amplified by Notice 90–60
(1990–2 C.B. 345). Notice 88–129 pro-
vides that a regulated public utility (util-
ity) will not realize income upon transfers
of interties from qualifying small power
3
Section 529(b)(7) was renumbered as§529(b)(6) by EGTRRA.
2001–52 I.R.B619December 26, 2001

producers and qualifying cogenerators
(collectively, Qualifying Facilities), as
defined in section 3 of the Federal Power
Act, as amended by section 201 of the
Public Utilities Regulatory Policies Act of
1978 (PURPA). This notice extends the
safe harbor provisions of Notice 88–129
to include transfers of interties from non-
Qualifying Facilities. The safe harbor also
is extended to transactions in which there
is not a long-term power purchase con-
tract between the utility and the power
producer but rather the intertie is trans-
ferred pursuant to a long-term intercon-
nection agreement and in which the inter-
tie is used exclusively to transmit power
across the utility’s transmission grid for
sale to consumers or intermediaries.
BACKGROUND
At the time Notice 88–129 was issued,
most generators that were not owned by
regulated public utilities (stand-alone
generators) were Qualifying Facilities for
regulatory purposes. As a stand-alone
generator, the Qualifying Facility had to
be connected to a utility’s transmission
lines in order to move its power to mar-
ket. PURPA required that a utility inter-
connect with a Qualifying Facility for the
purpose of allowing the sale of power
produced by the Qualifying Facility. A
Qualifying Facility generally sold its
electricity under a long-term power pur-
chase contract to the local utility with
whom it was interconnecting at the utili-
ty’s avoided cost. A Qualifying Facility
also arranged in certain cases for the
interconnected utility to transmit electric-
ity across its transmission grid for sale to
another utility (wheeling) at that utility’s
avoided cost.
Deregulation of the electric power
industry has significantly changed the
operation of the industry. Today, few new
stand-alone generators are Qualifying
Facilities. The Federal Energy Regulatory
Commission (FERC) encouraged the con-
struction of non-Qualifying Facilities
starting in the late 1980’s by issuing a
number of orders to individual projects
(known in the industry as independent
power producers) approving sales of
power at market rates. In addition, the
Energy Policy Act of 1992 created a new
class of stand-alone generators, called
exempt wholesale generators, that are
permitted to sell their power at market
rates with FERC approval, and are
exempted from certain utility regulation.
Unlike PURPA, the Energy Policy Act
has no requirement that utilities buy elec-
tricity from stand-alone generators.
In 1996, FERC issued Order No. 888
in an effort to ensure that every wholesale
supplier of electricity, including, for
example, power marketers and stand-
alone generators, has open access to the
national transmission grid. The order
requires regulated utilities to allow stand-
alone generators to interconnect to the
grid and to file nondiscriminatory tariffs
under which any wholesale supplier can
pay to have its electricity wheeled. Stand-
alone generators (including Qualifying
Facilities) have additional outlets for their
power today that they did not have in
1988, including sales of power at auction
on regional power exchanges or spot mar-
kets and under short and medium-term
contracts to specific customers or to
power marketers that trade electricity.
Regulated utilities have many more
sources of supply for electricity than in
1988. As a result of these changes, very
few utilities enter into long-term power
purchase contracts with stand-alone gen-
erators. Electricity produced by stand-
alone generators is more likely today than
in 1988 to be wheeled across the trans-
mission grid of the interconnected utility
for sale to consumers or intermediaries
rather than to be sold directly to the inter-
connected utility.
The new stand-alone generators still
need to be interconnected to the transmis-
sion grid in order for a customer to take
the power. Therefore, the stand-alone
generator enters into a long-term inter-
connection agreement with the local util-
ity. The term of a long-term interconnec-
tion agreement may be tied to the period
that the stand-alone generator remains in
commercial operation. This agreement
may permit assignment of the agreement
by the utility to accommodate future con-
solidation of local grids into regional
transmission systems that will cover
broad regions of the country.
MODIFICATIONS TO NOTICE 88–129
AND NOTICE 90–60
In light of the above-mentioned
changes in the electric power industry, the
safe harbor provisions of Notice 88–129
are modified as follows:
1. The safe harbor provisions are
extended to include transfers of interties
from non-Qualifying Facilities. Accord-
ingly, the term“QF transfer”appearing in
Notice 88–129 will be construed as
including“qualified transfers”of interties
from non-Qualifying Facilities that meet
the other requirements of the safe harbor
provisions. Similarly, the term“Qualify-
ing Facility”for purposes of Notice
88–129 will be construed as including
“stand-alone generators”that are not
Qualifying Facilities.
2. The safe harbor provisions also are
extended to include transfers of interties
used exclusively or in part to transmit
power over the utility’s transmission grid
for sale to consumers or intermediaries,
including affiliated intermediaries (wheel-
ing). This safe harbor only applies to
transactions in which the intertie is trans-
ferred pursuant to a long-term intercon-
nection agreement and in which owner-
ship of the electricity wheeled passes to
the purchaser prior to its transmission on
the utility’s transmission grid. The owner-
ship requirement of the preceding sen-
tence is deemed satisfied if title to elec-
tricity wheeled passes to the purchaser at
the busbar on the generator’s end of the
intertie. The terms“power purchase con-
tract”and“power supply contract”
appearing in Notice 88–129 will be con-
strued as including interconnection agree-
ments in transactions in which the intertie
is used for wheeling. Accordingly, a long-
term interconnection agreement in lieu of
a long-term power purchase contract or
power supply contract may be used to sat-
isfy the safe harbor provisions of Notice
88–129 in such transactions. The term
“dual-use intertie”appearing in Notice
88–129 will be construed as including an
intertie which may be used to transmit
power from a third party for sale to the
Qualifying Facility.
3. Section 6, sentence 4, of Notice
88–129, states,“The cost of property
transferred in a QF transfer must be capi-
talized by the Qualifying Facility as an
intangible asset and recovered as appro-
priate.”This sentence is modified to read
as follows:“The cost of property trans-
ferred in a QF transfer must be capital-
ized by the Qualified Facility as an intan-
gible asset and recovered using the
straight-line method over a useful life of
20 years.”
December 26, 20016202001–52 I.R.B.

EFFECT ON OTHER DOCUMENTS
Notice 88–129, as amplified and modi-
fied by Notice 90–60, is further amplified
and modified.
EFFECTIVE DATE
This notice applies to transfers of
property to regulated public utilities, pur-
suant to interconnection agreements,
completed after December 26, 2001, the
date this notice is published in the Bulle-
tin. For transfers of interties occurring on
or before December 26, 2001, and meet-
ing the requirements of this notice, tax-
payers may request application of this
notice through a request for a private let-
ter ruling (including in appropriate cir-
cumstances where the taxpayer’s return
for the year of transfer has already been
filed).
DRAFTING INFORMATION
The principal author of this notice is
Gregory N. Doran of the Office of Asso-
ciate Chief Counsel (Passthroughs and
Special Industries). For further informa-
tion regarding this notice, contact Mr.
Doran at (202) 622–3040 (not a toll-free
call).
Tables for Figuring Amount
Exempt From Levy on Wages,
Salary, and Other Income
Notice 2001–83
1. Table for Figuring Amount
Exempt From Levy on Wages, Salary,
and Other Income (Forms 668–W(c)
and 668–W(c)(DO)) 2002
Publication 1494, shown below, pro-
vides tables that show the amount of an
individual’s income that is exempt from a
notice of levy used to collect delinquent
tax in 2002.
(Amounts are for each pay period.)
Filing Status: Single
Pay
Period
Number of Exemptions Claimed on Statement
123456More Than 6
Daily29.6241.1552.6964.2375.7787.3118.08 plus 11.54 for
each exemption
Weekly148.08205.77263.46321.15378.85436.5490.38 plus 57.69 for
each exemption
Biweekly296.15411.54526.92642.31757.69873.08180.77 plus 115.38 for
each exemption
Semi-Monthly320.83445.83570.83695.83820.83945.83195.83 plus 125.00 for
each exemption
Monthly641.67891.671141.671391.671641.671891.67391.66 plus 250.00 for
each exemption
Filing Status: Unmarried Head of Household
Pay
Period
Number of Exemptions Claimed on Statement
123456More Than 6
Daily38.0849.6261.1572.6984.2395.7726.54 plus 11.54 for
each exemption
Weekly190.38248.08305.77363.46421.15478.85132.69 plus 57.69 for
each exemption
Biweekly380.77496.15611.54726.92842.31957.69265.38 plus 115.38 for
each exemption
Semi-Monthly412.50537.50662.50787.50912.501037.50287.50 plus 125.00 for
each exemption
Monthly825.001075.001325.001575.001825.002075.00575.00 plus 250.00 for
each exemption
2001–52 I.R.B621December 26, 2001

Filing Status: Married Filing Joint Return (and Qualifying Widow(er)s)
Pay PeriodNumber of Exemptions Claimed on Statement
123456More Than 6
Daily41.7353.2764.8176.3587.8899.4230.19 plus 11.54 for
each exemption
Weekly208.65266.35324.04381.73439.42497.12150.96 plus 57.69 for
each exemption
Biweekly417.31532.69648.08763.46878.85994.23301.92 plus 115.38 for
each exemption
Semi-Monthly452.08577.08702.08827.08952.081077.08327.08 plus 125.00 for
each exemption
Monthly904.171154.171404.171654.171904.172154.17654.17 plus 250.00 for
each exemption
Filing Status: Married Filing Separate Return
Pay PeriodNumber of Exemptions Claimed on Statement
123456More Than 6
Daily26.6338.1749.7161.2572.7984.3315.10 plus 11.54 for
each exemption
Weekly133.17190.87248.56306.25363.94421.6375.48 plus 57.69 for
each exemption
Biweekly266.35381.73497.12612.50727.88843.27150.96 plus 115.38 for
each exemption
Semi-Monthly288.54413.54538.54663.54788.54913.54163.54 plus 125.00 for
each exemption
Monthly577.08827.081077.081327.081577.081827.08327.08 plus 250.00 for
each exemption
2. Table for Figuring Additional Exempt Amount for Taxpayers at Least 65 Years Old and/or Blind
Additional Exempt Amount
Filing Status*DailyWklyBi-WklySemi-MoMonthly
Single or
Head of Household
14.4222.1244.2347.9295.83
28.8544.2388.4695.83191.57
Any Other Filing
Status
13.4617.3134.6237.5075.00
26.9234.6269.2375.00150.00
310.3851.92103.85112.50225.00
413.8569.23138.46150.00300.00
* ADDITIONAL STANDARD DEDUCTION claimed on Parts 3, 4,&5oflevy.
Examples
These tables show the amount exempt
from a levy on wages, salary, and other
income.
For example:
1. A single taxpayer who is paid
weekly and claims three exemptions
(including one for the taxpayer) has
$263.46 exempt from levy.
2. If the taxpayer in number 1 is over
65 and writes 1 in the ADDITIONAL
STANDARD DEDUCTION space on
Parts 3, 4,&5ofthelevy, $285.58 is
exempt from this levy ($263.46 plus
$22.12).
3. A taxpayer who is married, files
jointly, is paid biweekly, and claims two
exemptions (including one for the tax-
payer) has $532.69 exempt from levy.
4. If the taxpayer in number 3 is over
65 and has a spouse who is blind, this
taxpayer should write 2 in the ADDI-
TIONAL STANDARD DEDUCTION
space on Parts 3, 4,&5ofthelevy. Then,
$601.92 is exempt from this levy
($532.69 plus $69.23).
December 26, 20016222001–52 I.R.B.

26 CFR 601.602: Tax forms and instructions.
(Also Part I,§§1, 24, 25A, 32, 59, 63, 68, 132, 135, 151, 170, 213, 220, 512, 513, 685, 877, 2032A, 2503, 2523, 2631, 4001, 4003, 4261, 6033, 6039F, 6323, 6334,
6601, 7430, 7702B)
Rev. Proc. 2001–59
Table of Contents
SECTION 1. PURPOSE
SECTION 2. CHANGES
SECTION 3. 2002 ADJUSTED ITEMS
Code
Section
.01 Tax Rate Tables................................................................................................................................................................1(a)-(e)
.02 Unearned Income of Minor Children Taxed as if Parent’s Income (“Kiddie Tax”)...........................................................1(g)
.03 Child Tax Credit ..................................................................................................................................................................... 24
.04 Hope and Lifetime Learning Credits .................................................................................................................................. 25A
.05 Earned Income Tax Credit ..................................................................................................................................................... 32
.06 Alternative Minimum Tax Exemption for a Child Subject to the“Kiddie Tax”............................................................. 59(j)
.07 Standard Deduction ................................................................................................................................................................ 63
.08 Overall Limitation on Itemized Deductions .......................................................................................................................... 68
.09 Qualified Transportation Fringe ....................................................................................................................................... 132(f)
.10 Income from United States Savings Bonds for Taxpayers Who Pay Qualified Higher Education Expenses .................. 135
.11 Personal Exemption .............................................................................................................................................................. 151
.12 Eligible Long-Term Care Premiums......................................................................................................................... 213(d)(10)
.13 Medical Savings Accounts ................................................................................................................................................... 220
.14 Treatment of Dues Paid to Agricultural or Horticultural Organizations........................................................................ 512(d)
.15 Insubstantial Benefit Limitations for Contributions Associated with Charitable Fund-Raising Campaigns................ 513(h)
.16 Funeral Trusts ....................................................................................................................................................................... 685
.17 Expatriation to Avoid Tax .................................................................................................................................................... 877
.18 Valuation of Qualified Real Property in Decedent’s Gross Estate ................................................................................ 2032A
.19 Annual Exclusion for Gifts ....................................................................................................................................2503 & 2523
.20 Generation-Skipping Transfer Tax Exemption .................................................................................................................. 2631
.21 Luxury Automobile Excise Tax............................................................................................................................ 4001 & 4003
.22 Passenger Air Transportation Excise Tax .......................................................................................................................... 4261
.23 Reporting Exception for Certain Exempt Organizations with Nondeductible Lobbying Expenditures................. 6033(e)(3)
.24 Notice of Large Gifts Received from Foreign Persons .................................................................................................. 6039F
.25 Persons against Which a Federal Tax Lien is Not Valid .................................................................................................. 6323
.26 Property Exempt from Levy .............................................................................................................................................. 6334
.27 Interest on a Certain Portion of the Estate Tax Payable in Installments...................................................................... 6601(j)
.28 Attorney Fee Awards .......................................................................................................................................................... 7430
.29 Periodic Payments Received under Qualified Long-Term Care Insurance Contracts or
under Certain Life Insurance Contracts ......................................................................................................................7702B(d)
SECTION 4. EFFECTIVE DATE
SECTION 5. DRAFTING INFORMATION
2001–52 I.R.B623December 26, 2001

SECTION 1. PURPOSE
This revenue procedure sets forth
inflation adjusted items for 2002.
SECTION 2. CHANGES
.01 Section 201 of the Economic
Growth and Tax Relief Reconciliation Act
of 2001 (EGTRRA) amended§24 to
increase the amount of credit under
§24 that may be refundable. The value in
§24(d)(1)(B)(i) used in determining the
new potentially refundable amount is
adjusted for inflation.
.02 The amounts in§25A(b)(1)
which are used indeterminingthe
Hope Scholarship Credit and the
amounts in§25A(d)(2)(A)(ii) which are
used in determining the reduction in the
amount of the Hope Scholarship and Life-
time Learning Credits otherwise allow-
able under§25A(a) are adjusted for
inflation.
SECTION 3. 2002 ADJUSTED ITEMS
.01Tax Rate Tables. For tax years
beginning in 2002, the tax rate tables
under§1 are as follows:
TABLE 1—Section 1(a).—MARRIED INDIVIDUALS FILING JOINT RETURNS AND SURVIVING SPOUSES
If Taxable Income Is:The Tax Is:
Not Over $12,00010% of the taxable income
Over $12,000 but not over $46,700$1,200 plus 15% of excess over $12,000
Over $46,700 but not over $112,850$6,405 plus 27% of excess over $46,700
Over $112,850 but not over $171,950$24,265.50 plus 30% of excess over $112,850
Over $171,950 but not over $307,050$41,995.50 plus 35% of excess over $171,950
Over $307,050$89,280.50 plus 38.6% of excess over $307,050
TABLE 2—Section 1(b).—HEADS OF HOUSEHOLDS
If Taxable Income Is:The Tax is:
Not Over $10,00010% of the taxable income
Over $10,000 but not over $37,450$1,000 plus 15% of excess over $10,000
Over $37,450 but not over $96,700$5,117.50 plus 27% of the excess over $37,450
Over $96,700 but not over $156,600$21,115 plus 30% of the excess over $96,700
Over $156,600 but not over $307,050$39,085 plus 35% of the excess over $156,600
Over $307,050$91,742.50 plus 38.6% of the excess over
$307,050
TABLE 3—Section 1(c).—UNMARRIED INDIVIDUALS (OTHER THAN SURVIVING SPOUSES AND HEADS OF
HOUSEHOLDS).
If Taxable Income Is:The Tax Is:
Not over $6,00010% of the taxable income
Over $6,000 but not over $27,950$600 plus 15% of the excess over $6,000
Over $27,950 but not over $67,700$3,892.50 plus 27% of the excess over $27,950
Over $67,700 but not over $141,250$14,625 plus 30% of the excess over $67,700
Over $141,250 but not over $307,050$36,690 plus 35% of the excess over $141,250
Over $307,050$94,720 plus 38.6% of the excess over
$307,050
December 26, 20016242001–52 I.R.B.

TABLE 4—Section 1(d).—MARRIED INDIVIDUALS FILING SEPARATE RETURNS
If Taxable Income Is:The Tax Is:
Not Over $6,00010% of the taxable income
Over $6,000 but not over $23,350$600.00 plus 15% of the excess over $6,000
Over $23,350 but not over $56,425$3,202.50 plus 27% of the excess over $23,350
Over $56,425 but not over $85,975$12,132.75 plus 30% of the excess over
$56,425
Over $85,975 but not over $153,525$20,997.75 plus 35% of the excess over
$85,975
Over $153,525$44,640.25 plus 38.6% of the excess over
$153,525
TABLE 5—Section 1(e).—ESTATES AND TRUSTS
If Taxable Income Is:The Tax Is:
Not Over $1,85015% of the taxable income
Over $1,850 but not over $4,400$277.50 plus 27% of the excess over $1,850
Over $4,400 but not over $6,750$966.00 plus 30% of the excess over $4,400
Over $6,750 but not over $9,200$1,671.00 plus 35% of the excess over $6,750
Over $9,200$2,528.50 plus 38.6% of the excess over $9,200
.02Unearned Income of Minor Chil-
dren Taxed as if Parent’s Income (the
“Kiddie Tax”). For tax years beginning in
2002, the amount in§1(g)(4)(A)(ii)(I),
which is used to reduce the net unearned
income reported on the child’s return that
is subject to the“kiddie tax,”is $750.
(This amount is the same as the $750
standard deduction amount provided in
section 3.07(2) of this revenue proce-
dure.) The same $750 amount is also used
for purposes of§1(g)(7) (that is, deter-
mining whether a parent may elect to
include a child’s gross income in the par-
ent’s gross income and for calculating the
“kiddie tax”). For example, one of the
requirements for such a parental elec-
tion is that a child’s gross income be
more than the amount referenced in
§1(g)(4)(A)(ii)(I) but less than 10 times
such amount; thus, a child’s gross income
for 2002 must be more than $750 but less
than $7,500 to satisfy that requirement.
.03Child Tax Credit. Section 201 of
the Economic Growth and Tax Relief
Reconciliation Act of 2001 (EGTRRA)
amended§24 to increase the amount of
credit under§24 that may be refundable.
The value in§24(d)(1)(B)(i) used in
determining the new potentially refund-
able amount is adjusted for inflation. For
tax years beginning in 2002, that value is
$10,350.
.04Hope and Lifetime Learning Cred-
its.
(1) For taxable years beginning in
2002, 100 percent of qualified tuition and
related expenses not in excess of $1,000
and 50 percent of such expenses in excess
of $1,000 are taken into account in deter-
mining the amount of the Hope Scholar-
ship Credit under§25A(b)(1).
(2) For tax years beginning in 2002, a
taxpayer’s modified gross income in
excess of $41,000 ($82,000 in the case
of a joint return) is taken into account
indeterminingthereductionunder
§25A(d)(2)(A)(ii) in the amount of the
Hope Scholarship and Lifetime Learning
Creditsotherwiseallowableunder
§25A(a).
.05Earned Income Tax Credit.
(1)In general. For tax years beginning
in 2002, the following amounts are used
to determine the earned income tax credit
under§32(b). The“earned income
amount”is the amount of earned income
at or above which the maximum amount
of the earned income tax credit is
allowed. The“threshold phaseout
amount”is the amount of adjusted gross
income (or, if greater, earned income)
above which the maximum amount of the
credit begins to phase out. The“com-
pleted phaseout amount”is the amount of
adjusted gross income (or if greater,
earned income) at or above which no
credit is allowed.
2001–52 I.R.B625December 26, 2001

ItemNumber of Qualifying Children
OneTwo or MoreNone
Earned Income Amount$ 7,370$10,350$ 4,910
Maximum Amount of Credit$ 2,506$ 4,140$376
Threshold Phaseout Amount$13,520$13,520$ 6,150
Completed Phaseout Amount$29,201$33,178$11,060
Threshold Phaseout Amount
(Married Filing Jointly)$14,520$14,520$ 7,150
Completed Phaseout Amount
(Married Filing Jointly)$30,201$34,178$12,060
The Internal Revenue Service, in the
instructions for the Form 1040 series,
provides tables showing the amount of
the earned income tax credit for each type
of taxpayer.
(2)Excessive investment income.For
tax years beginning in 2002, the earned
income tax credit is denied under§32(i)
if the aggregate amount of certain invest-
ment income exceeds $2,550.
.06Alternative Minimum Tax Exemp-
tion for a Child Subject to the“Kiddie
Tax.”For tax years beginning in 2002, in
the case of a child to whom the§1(g)
“kiddie tax”applies, the exemption
amount under§55 and§59(j) for pur-
poses of the alternative minimum tax
under§55 may not exceed the sum of
(A) such child’s earned income for the
taxable year, plus (B) $5,500.
.07Standard Deduction.
(1)In general. For tax years beginning
in 2002, the standard deduction amounts
under§63(c)(2) are as follows:
Filing StatusStandard Deduction
MARRIED INDIVIDUALS FILING JOINT RETURNS AND
SURVIVING SPOUSES (§1(a))$7,850
HEADS OF HOUSEHOLDS (§1(b))$6,900
UNMARRIED INDIVIDUALS (OTHER THAN SURVIVING
SPOUSES AND HEADS OF HOUSEHOLDS) (§1(c))$4,700
MARRIED INDIVIDUALS FILING SEPARATE RETURNS
(§1(d))$3,925
(2)Dependent. For tax years begin-
ning in 2002, the standard deduction
amount under§63(c)(5) for an individual
who may be claimed as a dependent by
another taxpayer may not exceed the
greater of $750, or the sum of $250 and
the individual’s earned income.
(3)Aged and blind. For tax years
beginning in 2002, the additional standard
deduction amounts under§63(f) for the
aged and for the blind are $900 for each.
These amounts are increased to $1,150 if
the individual is also unmarried and not a
surviving spouse.
.08Overall Limitation on Itemized
Deductions. For tax years beginning in
2002, the“applicable amount”of adjusted
gross income under§68(b), above which
the amount of otherwise allowable item-
ized deductions is reduced under§68, is
$137,300 (or $68,650 for a separate
return filed by a married individual).
.09Qualified Transportation Fringe.
For tax years beginning in 2002, the
monthly limitation under§132(f)(2)(A),
regarding the aggregate fringe benefit
exclusion amount for transportation in a
commuter highway vehicle and any tran-
sit pass, is $100. The monthly limitation
under§132(f)(2)(B) regarding the fringe
benefit exclusion amount for qualified
parking is $185.
.10Income from United States Savings
Bonds for Taxpayers Who Pay Qualified
Higher Education Expenses.For tax
years beginning in 2002, the exclusion
under§135, regarding income from
United States savings bonds for taxpayers
who pay qualified higher education
expenses, begins to phase out for modi-
fied adjusted gross income above $86,400
for joint returns and $57,600 for other
returns. This exclusion completely phases
out for modified adjusted gross income of
$116,400 or more for joint returns and
$72,600 or more for other returns.
.11Personal Exemption.
(1)Exemption amount. For tax years
beginning in 2002, the personal exemp-
tion amount under§151(d) is $ 3,000.
(2)Phase out. For tax years beginning
in 2002, the personal exemption amount
begins to phase out at, and is completely
phased out after, the following adjusted
gross income amounts:
December 26, 20016262001–52 I.R.B.

Filing Status
AGI—
Beginning
Phaseout
AGI Above Which Exemption Fully
Phased Out
Code§1(a)$206,000$328,500
Code§1(b)$171,650$294,150
Code§1(c)$137,300$259,800
Code§1(d)$103,000$164,250
.12Eligible Long-Term Care Premiums. For tax years beginning in 2002, the limitations under§213(d), regarding eligible long-
term care premiums includible in the term“medical care,”are as follows:
Attained age before the close of the taxable year:Limitation on premiums:
40 or less$ 240
More than 40 but not more than 50$ 450
More than 50 but not more than 60$ 900
More than 60 but not more than 70$2,390
More than 70$2,990
.13Medical Savings Accounts.
(1)Self-only coverage. For tax years
beginning in 2002, the term“high
deductible health plan”as defined in
§220(c)(2)(A) means, in the case of self-
only coverage, a health plan which has
an annual deductible that is not less than
$1,650 and not more than $2,500, and
under which the annual out-of-pocket
expenses required to be paid (other than
for premiums) for covered benefits does
not exceed $3,300.
(2)Family coverage. For tax years
beginning in 2002, the term“high deduct-
ible health plan”means, in the case of
family coverage, a health plan which has
an annual deductible that is not less than
$3,300 and not more than $4,950, and
under which the annual out-of-pocket
expenses required to be paid (other than
for premiums) for covered benefits does
not exceed $6,050.
.14Treatment of Dues Paid to Agricul-
tural or Horticultural Organizations. For
tax years beginning in 2002, the limita-
tion under§512(d)(1), regarding the
exemption of annual dues required to be
paid by a member to an agricultural or
horticultural organization, is $120.
.15Insubstantial Benefit Limitations
for Contributions Associated with Chari-
table Fund-Raising Campaigns.
(1)Low cost article. For tax years
beginning in 2002, the unrelated business
income of certain exempt organizations
under§513(h)(2) does not include a“low
cost article”of $7.90 or less.
(2)Other insubstantial benefits. For
tax years beginning in 2002, the $5, $25,
and $50 guidelines in section 3 of Rev.
Proc. 90–12 (1990–1 C.B. 471) (as ampli-
fied and modified), for disregarding the
value of insubstantial benefits received by
a donor in return for a fully deductible
charitable contribution under§170, are
$7.90, $39.50, and $79.00, respectively.
.16Funeral Trusts. For a contract
entered intoduringcalendaryear
2002 for a“qualified funeral trust,”as
defined in§685, the trust may not accept
aggregate contributions by or for the ben-
efit of an individual in excess of $7,700.
.17Expatriation to Avoid Tax. For cal-
endar year 2002, the thresholds used
under§877(a)(2), regarding whether an
individual’s loss of United States citizen-
ship had the avoidance of United States
taxes as one of its principal purposes, are
more than $120,000 for“average annual
net income tax”and $599,000 or more for
“net worth.”
.18Valuation of Qualified Real Prop-
erty in Decedent’s Gross Estate. For an
estate of a decedent dying in calendar
year2002, if theexecutorelects to
use the special use valuation method
under§2032A for qualified real property,
the aggregate decrease in the value of
qualified real property resulting from
electing to use§2032A that is taken into
account for purposes of the estate tax may
not exceed $820,000.
.19Annual Exclusion for Gifts.
(1) For calendar year 2002, the first
$11,000 of gifts to any person (other than
gifts of future interests in property) are
not included in the total amount of tax-
able gifts under§2503 made during that
year.
(2) For calendar year 2002, the first
$110,000 of gifts to a spouse who is not a
citizen of the United States (other than
gifts of future interests in property) are
not included in the total amount of tax-
able gifts under§§2503 and 2523(i)(2)
made during that year.
.20Generation-Skipping Transfer Tax
Exemption. For calendar year 2002, the
generation-skipping transfer tax exemp-
tion under§2631, which is allowed in
determining the“inclusion ratio”defined
in§2642, is $1,100,000.
.21Luxury Automobile Excise Tax.For
calendar year 2002, the excise tax under
§§4001 and 4003 is imposed on the first
retail sale of a passenger vehicle (includ-
ing certain parts or accessories installed
within six months of the date after the
vehicle was first placed in service), to
the extent the price exceeds $40,000.
.22Passenger Air Transportation
Excise Tax. For calendar year 2002, the
2001–52 I.R.B627December 26, 2001

tax under§4261(c) on any amount paid
(whether within or without the United
States) for any transportation of any per-
son by air, if such transportation begins
or ends in the United States, generally is
$13.20. However, in the case of a domes-
tic segment beginning or ending in Alaska
or Hawaii as described in§4261(c)(3),
the tax only applies to departures and is at
the rate of $6.60.
.23Reporting Exception for Certain
Exempt Organizations with Nondeduct-
ible Lobbying Expenditures. For tax years
beginning in 2002, the annual per per-
son, family, or entity dues limitation to
qualify for the reporting exception under
§6033(e)(3) (and section 5.05 of Rev.
Proc. 98–19, 1998–1 C.B. 547), regarding
certain exempt organizations with nonde-
ductible lobbying expenditures, is $83 or
less.
.24Notice of Large Gifts Received
from Foreign Persons. For tax years
beginning in 2002, recipients of gifts
from certain foreign persons may have to
report these gifts under§6039F if the
aggregate value of gifts received in a tax-
able year exceeds $11,642.
.25Persons against Which a Federal
Tax Lien isNot Valid. Forcalendar
year 2002, afederal taxlien isnot
valid against (1)certainpurchasers
under§6323(b)(4) that purchased per-
sonal property in a casual sale for less
than $1,130 or (2) a mechanic’s lienor
under§6323(b)(7) that repaired or
improved certain residential property if
the contract price with the owner is not
more than $5,660.
.26Property Exempt from Levy. For
calendar year 2002, the value of property
exempt from levy under§6334(a)(2)
(fuel, provisions, furniture, and other
household personal effects, as well as
arms for personal use, livestock, and
poultry) may not exceed $6,780. The
value of property exempt from levy under
§6334(a)(3) (books and tools necessary
for the trade, business, or profession of
the taxpayer) may not exceed $3,390.
.27Interest on a Certain Portion of the
Estate Tax Payable in Installments. For
an estate of a decedent dying in calen-
dar year 2002, the dollar amount used
to determinethe“2–percentportion”
(for purposesof calculatinginterest
under§6601(j)) of the estate tax
extended as provided in§6166 is
$1,100,000.
.28Attorney Fee Awards.For fees
incurred in calendar year 2002, the
attorney fee award limitation under
§7430(c)(1)(B)(iii) is $150 per hour.
.29Periodic Payments Received under
Qualified Long-Term Care Insurance
Contracts or under Certain Life Insur-
ance Contracts. For calendar year 2002,
the stated dollar amount of theper diem
limitation under§7702B(d)(4), regarding
periodic payments received under a quali-
fied long-term care insurance contract or
periodic payments received under a life
insurance contract that are treated as paid
by reason of the death of a chronically ill
individual, is $210.
SECTION 4. EFFECTIVE DATE
.01General Rule. Except as provided
in section 4.02, this revenue procedure
applies to tax years beginning in 2002.
.02Calendar Year Rule. This revenue
procedure applies to transactions or
events occurring in calendar year 2002
for purposes of section 3.16 (funeral
trusts), section 3.17 (expatriation to avoid
tax), section 3.18 (valuation of qualified
real property in decedent’s gross estate),
section 3.19 (annual exclusion for gifts),
section 3.20 (generation-skipping transfer
tax exemption), section 3.21 (luxury auto-
mobile excise tax), section 3.22 (passen-
ger air transportation excise tax), section
3.25 (persons against which a federal tax
lien is not valid), section 3.26 (property
exempt from levy), section 3.27 (interest
on a certain portion of the estate tax pay-
able in installments), section 3.28 (attor-
ney fee awards), and section 3.29 (peri-
odic payments received under qualified
long-term care insurance contracts or
under certain life insurance contracts).
SECTION 5. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Richard Ennis of the Office
of Associate Chief Counsel (Income Tax
and Accounting). For further information
regarding this revenue procedure, contact
Mr. Ennis at (202) 622–7057 (not a toll-
free call).
December 26, 20016282001–52 I.R.B.

Part IV. Items of General Interest
Foundations Status of Certain
Organizations
Announcement 2001–123
The following organizations have
failed to establish or have been unable to
maintain their status as public charities or
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 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 pri-
vate foundations described in section
509(a) of the Code) are now classified as
private foundations:
4 As-Hope Psychosocial After Care
Family Services, Inc., Dearborn, MI
African American Achievers Youth
Corps, Inc., Gary, IN
African Anti-Poachins Foundation,
Brunswick, ME
African Arts Foundation,
Beverly Hills, CA
Always in Season, Inc.,
Myakka City, FL
American Friends of Ezer Lachim, Inc.,
Monsey, NY
American Friends of Qatzrin, Inc.,
New York, NY
American History Studies,
Katy, TX
American Pushington University,
Pomona, CA
American Sculpture Association,
Glenmoore, PA
ARC Foundation of Kentucky, Inc.,
Frankfort, KY
Art Spirit, Inc., Sea Cliff, NY
B A S U, San Jose, CA
Belvidere Main Street Center,
Belvidere, IL
Bernard and Sonya Singer Non Profit
Corporation, Englewood, CO
Bridgewater Bears Hockey Club, Inc.,
Budd Lake, NJ
Broadway Institute of Massage
Therapy, Inc., Hollywood, FL
Burnt Hills Hockey Association, Inc.,
Burnt Hills, NY
Center for Research on Innovation &
Society, Santa Barbara, CA
Central Arkansas School-To-Work
Council, North Little Rock, AR
Central Kitsap Medic One Foundation,
Silverdale, WA
Century One Foundation, Inc.,
Pasadena, CA
Chattanooga Lafayette Emmaus
Community, Inc., Rossville, GA
Child Abuse Awareness, Inc.,
Batesville, AR
Child Search, Moore, OK
Children’s Developmental Services, Inc.,
Riverdale, NY
Chimney Peak Development
Corporation, Jacksonville, AL
Chippewa County Foster and Adoptive
Parents Association,
Sault Ste Marie, MI
Clams-Computer Literate Advocates for
Multiple Sclerosis,
Bainbridge Island, WA
Collaborative Research for Endangered
Wildlife, Inc., Burlingame, CA
Color Box Foundation, New York, NY
Communities United Together,
LaPlace, LA
Community for Progress Association,
Kansas City, KS
Community Justice Outreach, Inc.,
Miami, FL
Cornerstone Community Devlopment
Corporation, Inc., Dallas, TX
Delta County Cancer Alliance, Inc.,
Escanaba, MI
DeVaughn Corporation, Balitmore, MD
East County Youth Soccer Association
Inc., Vancouver, WA
El Shaddai, Springfield, MO
Exercise Tiger Memorial Association,
Inc., New Bedford, MA
Families for Autism Intervention and
Resources, La Mesa, CA
Family Works, Inc., Oceanside, CA
Filipino-American Tennis Club of
McAllen, McAllen, TX
Forgotten Treasures, Inc., Denver, CO
Friends of Petoskey Public Library,
Petoskey, MI
Friends of the Library for the Blind and
Physical Handicap of the State of DE,
Inc., Dover, DE
G A N G-Girls of the Ann Norton
Gardens, Palm Beach, FL
Great Expectations Foundation, Inc.,
New Orleans, LA
Great Lakes Non-Profit Housing
Corporation, Marquette, MI
Greater Mid-South Junior Chamber of
Commerce Foundation, Inc.
Memphis, TN
Greenspace Bucks County, Inc.,
Morrisville, PA
Hall County Homeless Resource
Coalition, Inc.,
Gainesville, GA
Hammerheads Theatre, Incorporated,
New York, NY
Helping Ministry Neighborhood
Development Corporation,
Hayti, MO
Hemangioma and Vascular Birthmarks
Foundation, Inc., Latham, NY
Himalayan Instructional Ministries,
Madras, OR
House of Angels, Inc.,
Silver Spring, MD
How to Get an A in Life, Inc.,
Los Altos, CA
Institute for Global Environmental
Issues, Inc., Naples, FL
Institute of World Traditional Medicine,
Santa Monica, CA
International Cultural & Educational
Exchange Foundation, Inc.,
Falls Church, VA
Ipswich Equine Rescue Corp.,
Ipswich, MA
Jimmy’s Heart Foundation, Kihei, HI
Kansas City Area Historic Trails
Association, Shawnee Mission, KS
Kings Kids Learning Center, Inc.,
Houston, TX
Lady Monarchs of New Jersey, Inc.,
Bayonne, NJ
Lafayette County Literacy Council,
University, MS
Lancaster County Historical Society &
Museum, Whitestone, VA
Legacy Ministries, Inc., California, MO
Lighthouse - Reach Ministries,
Incorporated, Plainview, TX
2001–52 I.R.B629December 26, 2001

Little Peoples Day Care,
Philadelphia, PA
Long Island Seaport and Ecocenter, Inc.,
Port Jefferson, NY
Longfellow Area Neighborhood
Association, Inc., Roslindale, MA
Majestic Harmony, Inc., Bronx, NY
Malemute Football Booster Club,
Fairbanks, AK
Maui Military Museum, Inc.,
Makawao, HI
Medford High Alumni Association,
Medford, OK
Miami Valley Fandom for Literacy,
Dayton, OH
Mountain Meadow PTA 5 9 15,
Buckley, WA
MSL Barristers, Inc., Andover, MA
Mutual Assisted Senior Housing, Inc.,
New York, NY
National Decubitus Foundation,
Aurora, CO
National Large Cell Braille Foundation,
Incorporated, Orlando, FL
Nelson A. Rockefeller Foundation for
Public Service, Bellevue, WA
New Concept Education and Research,
Inc., San Jose, CA
New Day Foundation, Inc.,
Broken Arrow, OK
New Hope Home for Boys, Inc.,
Memphis, TN
New London Partners in Education,
New London, OH
New Vision Community Church, Inc.,
Valdosta, GA
New Vision House, Inc., Valdosta, GA
Newbury Education Foundation,
Cleveland, OH
North East School Scholarship Fund,
Inc., North East, PA
North Emergency Planning Committee,
Pearland, TX
Northwest Sarcoma Memorial
Foundation, Seattle, WA
Oakfield Historical Society,
Oakfield, ME
Operation Role Models of America, Inc.,
New York, NY
Owerri Cultural Association,
Beverly Hills, CA
Pakistan American Cultural Society, Inc.,
Tenafly, NJ
Peggy Thorns Evangelistic Association,
Charlotte, NC
Perry County Medical Association
Alliance, Inc., Hazard, KY
Phillip Ates Broadcast Group, Inc.,
Maywood, IL
Phoenix Heros Endowment Fund,
Scottsdale, AZ
Pieces of a Dream, Inc., St. Louis, MO
Play Source International, Inc.,
Lousiville, KY
Poimens Family Care, Manteca, CA
Prospect Hill Neighborhood Community
Council, Omaha, NE
Rabbit Rescue, Inc., Hollywood, FL
Railway Memorial Project,
Columbia, MT
Restore Hope Relief International,
Santa Barbara, CA
Rim Civic Orchestra, Incorporated,
Payson, AZ
Rivers of Healing Ministries,
Philadelphia, PA
Rotary Club of Winters Community
Foundation, Winters, CA
Sacramento 21 Community Partnership,
Sacramento, CA
Safari Missions International,
Beverly Hills, CA
Salinas Boxing Club, Inc., Salinas, CA
San Francisco Clidrens Museum,
San Francisco, CA
S E W Sewing Education Workstudy
Foundation, El Cerrito, CA
SGPHS Chey-Anne Booster Club,
Grand Prairie, TX
Southwest Section of the Air & Waste
Management Association,
Arlington, TX
Teen Pregnancy Outreach Development
Center Shelter, Inc., Whitesburg, GA
Theatre Asylum, Ltd., Brooklyn, NY
Tiger Foundation, Newtown Square, PA
Time Dollars Madison, Madison, IN
Tonga Peoples Development Society,
Salt Lake City, UT
Uncle Kens Kitchen, Inc.,
East Setauket, NY
Urban Black Music Project,
Incorporated, New York, NY
Wawasee Area Swim Team, Inc.,
North Webster, IN
Web Cinema Group, New York, NY
West High School Alumni Association,
Denver, CO
West Texas Expo Center, Inc.,
Midland, TX
Wichterich Ministries, Slidell, LA
Women of Georgia for Peace and Life,
Inc., Chevy Chase, MD
Youth Guidance, Plattsmouth, NE
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 Inter-
nal Revenue Service will issue a ruling or
determination letter with the revised clas-
sification as to foundation status. Grant-
ors and contributors may thereafter rely
upon such ruling or determination letter
as provided in section 1.509(a)–7ofthe
Income Tax Regulations. It is not the
practice of the Service to announce such
revised classification of foundation status
in the Internal Revenue Bulletin.
Additional Disaster Relief in
Connection With the
September 11 Terrorist
Attack for Taxpayers With
Interests in Passthrough
Entities
Announcement 2001–124
This announces additional relief in
connection with the September 11, 2001,
terrorist attack for partners, shareholders,
and beneficiaries of passthrough entities
that are affected taxpayers as defined in
Notice 2001–61 (2001–40 I.R.B. 305)
(October 1, 2001). This announcement
modifies and expands the relief granted
by Announcement 2001–117 (2001–49
I.R.B. 567). Under section 301.7508A–
1(d)(1)(vii) of the Procedure and Admin-
istration Regulations, the IRS may deter-
mine whether any person is affected by a
Presidentially declared disaster. The IRS
has determined that a taxpayer that is a
partner, shareholder, or beneficiary of a
taxpayer affected by the September 11,
2001, terrorist attack, is also an affected
taxpayer. Accordingly, partners, share-
holders, and beneficiaries of an affected
taxpayer are eligible for all the relief
granted by Notice 2001–61 and Notice
2001–68 (2001–47 I.R.B. 504). Thus, for
example, a partner that is an individual
income taxpayer with an extended due
date of October 15, 2001, for the 2000
return will have until February 12, 2002,
to file the return.
If a partner, shareholder, or beneficiary
of an affected taxpayer qualifies for relief
under this notice because an original due
date fell within the specified period, and
December 26, 20016302001–52 I.R.B.

such partner, shareholder, or beneficiary
has already obtained an extension of time
to file, the IRS will supplement such
extension with the relief granted by
Notice 2001–61 and/or Notice 2001–68.
Thus, for example, a corporate partner
with an original due date during the
specified period that has obtained the
automatic six-month extension of time to
file will be granted a six-month extension
of time to pay and an additional 120 day
postponement of time to file and time to
pay.
Taxpayers that qualify for relief under
this announcement should mark“Septem-
ber 11, 2001, Terrorist Attacks—
Passthrough Entity”in red ink on the top
of their returns or other documents filed
with the IRS.
This announcement was drafted by the
Office of Associate Chief Counsel, Proce-
dure and Administration (Administrative
Provisions and Judicial Practice Divi-
sion). For further information regarding
this notice, you may call (202) 622–4940
(not a toll-free call).
2001–52 I.R.B631December 26, 2001

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as“rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle
applied to A, and the new ruling holds
that the same principle also applies to B,
the earlier ruling is amplified. (Compare
withmodified, below).
Clarifiedis used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously
published ruling and points out an essen-
tial difference between them.
Modifiedis used where the substance
of a previously published position is
being changed. Thus, if a prior ruling
held that a principle applied to A but not
to B, and the new ruling holds that it
applies to both A and B, the prior rul-
ing is modified because it corrects a
published position. (Compare withampli-
fiedandclarified, above).
Obsoleteddescribes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used
in a ruling that lists previously published
rulings that are obsoleted because of
changes in law or regulations. A ruling
may also be obsoleted because the sub-
stance has been included in regulations
subsequently adopted.
Revokeddescribes situations where the
position in the previously published rul-
ing is not correct and the correct position
is being stated in the new ruling.
Supersededdescribes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a
period of time in separate rulings. If the
new ruling does more than restate the
substance of a prior ruling, a combination
of terms is used. For example,modified
andsupersededdescribes a situation
where the substance of a previously pub-
lished ruling is being changed in part and
is continued without change in part and it
is desired to restate the valid portion of
the previously published ruling in a new
ruling that is self contained. In this case,
the previously published ruling is first
modified and then, as modified, is super-
seded.
Supplementedis used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.
Suspendedis used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.
Abbreviations
The following abbreviations in current
use and formerly used will appear in
material published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security
Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign Corporation.
G.C.M.—Chief Counsels Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Intemal 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.
December 26, 2001i2001–52 I.R.B.

Numerical Finding List
1
Bulletins 2001–27 through 2001–51
Announcements:
2001–69, 2001–27 I.R.B.23
2001–70, 2001–27 I.R.B.23
2001–71, 2001–27 I.R.B.26
2001–72, 2001–28 I.R.B.39
2001–73, 2001–28 I.R.B.40
2001–74, 2001–28 I.R.B.40
2001–75, 2001–28 I.R.B.42
2001–76, 2001–29 I.R.B.67
2001–77, 2001–30 I.R.B.83
2001–78, 2001–30 I.R.B.87
2001–79, 2001–31 I.R.B.97
2001–80, 2001–31 I.R.B.98
2001–81, 2001–33 I.R.B.175
2001–82, 2001–32 I.R.B.123
2001–83, 2001–35 I.R.B.205
2001–84, 2001–35 I.R.B.206
2001–85, 2001–36 I.R.B.219
2001–86, 2001–35 I.R.B.207
2001–87, 2001–35 I.R.B.208
2001–88, 2001–36 I.R.B.220
2001–89, 2001–38 I.R.B.291
2001–90, 2001–35 I.R.B.208
2001–91, 2001–36 I.R.B.221
2001–92, 2001–39 I.R.B.301
2001–93, 2001–44 I.R.B.416
2001–94, 2001–39 I.R.B.303
2001–95, 2001–39 I.R.B.303
2001–96, 2001–41 I.R.B.317
2001–97, 2001–40 I.R.B.310
2001–98 2001–41 I.R.B.317
2001–99 2001–42 I.R.B.340
2001–100, 2001–41 I.R.B.317
2001–101, 2001–43 I.R.B.374
2001–102, 2001–42 I.R.B.340
2001–103, 2001–43 I.R.B.375
2001–104, 2001–43 I.R.B.376
2001–105, 2001–43 I.R.B.376
2001–106, 2001–44 I.R.B.416
2001–107, 2001–44 I.R.B.419
2001–108, 2001–44 I.R.B.419
2001–109, 2001–45 I.R.B.485
2001–110, 2001–45 I.R.B.486
2001–111, 2001–45 I.R.B.486
2001–112, 2001–46 I.R.B.494
2001–113, 2001–46 I.R.B.494
2001–114, 2001–47 I.R.B.528
2001–115, 2001–48 I.R.B.539
2001–116, 2001–48 I.R.B.539
2001–117, 2001–49 I.R.B.567
2001–118, 2001–48 I.R.B.540
2001–119, 2001–50 I.R.B.575
2001–120, 2001–50 I.R.B. 583
2001–121, 2001–50 I.R.B.584
2001–122, 2001–51 I.R.B.604
Court Decisions:
2070, 2001–31 I.R.B.90
Court Decisions—Continued
2071, 2001–44 I.R.B.385
2072, 2001–44 I.R.B.379
Notices:
2001–39, 2001–27 I.R.B.3
2001–41, 2001–27 I.R.B.2
2001–42, 2001–30 I.R.B.70
2001–43, 2001–30 I.R.B.72
2001–44, 2001–30 I.R.B.77
2001–45, 2001–33 I.R.B.129
2001–46, 2001–32 I.R.B.122
2001–47, 2001–36 I.R.B.212
2001–48, 2001–33 I.R.B.130
2001–49, 2001–34 I.R.B.188
2001–50, 2001–34 I.R.B.189
2001–51, 2001–34 I.R.B.190
2001–52, 2001–35 I.R.B.203
2001–53, 2001–37 I.R.B.225
2001–54, 2001–37 I.R.B.225
2001–55, 2001–39 I.R.B.299
2001–56, 2001–38 I.R.B.277
2001–57, 2001–38 I.R.B.279
2001–58, 2001–39 I.R.B.299
2001–59, 2001–41 I.R.B.315
2001–60, 2001–40 I.R.B.304
2001–61, 2001–40 I.R.B.305
2001–62, 2001–40 I.R.B.307
2001–63, 2001–40 I.R.B.308
2001–64, 2001–41 I.R.B.316
2001–65, 2001–43 I.R.B.369
2001–66, 2001–44 I.R.B.396
2001–67, 2001–49 I.R.B.544
2001–68, 2001–47 I.R.B.504
2001–69, 2001–46 I.R.B.491
2001–70, 2001–45 I.R.B.437
2001–71, 2001–48 I.R.B.530
2001–72, 2001–49 I.R.B.548
2001–73, 2001–49 I.R.B.549
2001–74, 2001–49 I.R.B.551
2001–75, 2001–51 I.R.B.590
2001–77, 2001–50 I.R.B.576
2001–78, 2001–50 I.R.B.576
2001–79, 2001–50 I.R.B.576
Proposed Regulations:
REG–110311–98, 2001–35 I.R.B.204
REG–106917–99, 2001–27 I.R.B.4
REG–103735–00, 2001–35 I.R.B.204
REG–103736–00, 2001–35 I.R.B.204
REG–107151–00, 2001–43 I.R.B.370
REG–100548–01, 2001–29 I.R.B.67
REG–106431–01, 2001–37 I.R.B.272
REG–125161–01, 2001–48 I.R.B.538
REG–126485–01, 2001–49 I.R.B.555
REG–137519–01, 2001–49 I.R.B.559
REG–142686–01, 2001–49 I.R.B.561
REG–142499–01, 2001–45 I.R.B.476
Railroad Retirement Quarterly Rates:
2001–27, I.R.B.1
2001–41, I.R.B.314
Revenue Procedures:
2001–39, 2001–28 I.R.B.38
2001–40, 2001–33 I.R.B.130
2001–41, 2001–33 I.R.B.173
2001–42, 2001–36 I.R.B.212
2001–43, 2001–34 I.R.B.191
2001–44, 2001–35 I.R.B.203
2001–45, 2001–37 I.R.B.227
2001–46, 2001–37 I.R.B.263
2001–47, 2001–42 I.R.B.332
2001–48, 2001–40 I.R.B.308
2001–49, 2001–39 I.R.B.300
2001–50, 2001–45 I.R.B.437
2001–51, 2001–43 I.R.B.369
2001–52, 2001–46 I.R.B.491
2001–53, 2001–47 I.R.B.506
2001–54, 2001–48 I.R.B.530
2001–55, 2001–49 I.R.B.552
2001–56, 2001–51 I.R.B.590
2001–57, 2001–50 I.R.B.577
2001–58, 2001–50 I.R.B.579
Revenue Rulings:
2001–30, 2001–29 I.R.B.46
2001–33, 2001–32 I.R.B.118
2001–34, 2001–28 I.R.B.31
2001–35, 2001–29 I.R.B.59
2001–36, 2001–32 I.R.B.119
2001–37, 2001–32 I.R.B.100
2001–38, 2001–33 I.R.B.124
2001–39, 2001–33 I.R.B.125
2001–40, 2001–38 I.R.B.276
2001–41, 2001–35 I.R.B.193
2001–42, 2001–37 I.R.B.223
2001–43, 2001–36 I.R.B.209
2001–44, 2001–37 I.R.B.223
2001–45, 2001–42 I.R.B.323
2001–46, 2001–42 I.R.B.321
2001–47, 2001–39 I.R.B.293
2001–48, 2001–42 I.R.B.324
2001–49, 2001–41 I.R.B.312
2001–50, 2001–43 I.R.B.343
2001–51, 2001–45 I.R.B.427
2001–52, 2001–45 I.R.B.434
2001–53, 2001–46 I.R.B.489
2001–54, 2001–46 I.R.B.490
2001–55, 2001–47 I.R.B.497
2001–56, 2001–47 I.R.B.500
2001–57, 2001–46 I.R.B.488
2001–58, 2001–50 I.R.B.570
2001–59, 2001–51 I.R.B.585
2001–60, 2001–51 I.R.B.587
2001–61, 2001–50 I.R.B.573
1
A cumulative list of all revenue rulings, revenue
procedures, Treasury decisions, etc., published in
Internal Revenue Bulletins 2001–1 through 2001–26 is
in Internal Revenue Bulletin 2001–27, dated July 2, 2001.
2001–52 I.R.BiiDecember 26, 2001

Social Security Contribution
and Benefit Base; Domestic
Employee Coverage Threshold:
2001–51 I.R.B.603
Treasury Decisions:
8947, 2001–28 I.R.B.36
8948, 2001–28 I.R.B.27
8949, 2001–28 I.R.B.33
8950, 2001–28 I.R.B.34
8951, 2001–29 I.R.B.63
8952, 2001–29 I.R.B.60
8953, 2001–29 I.R.B.44
8954, 2001–29 I.R.B.47
8955, 2001–32 I.R.B.101
8956, 2001–32 I.R.B.112
8957, 2001–33 I.R.B.125
8958, 2001–34 I.R.B.183
8959, 2001–34 I.R.B.185
8960, 2001–34 I.R.B.176
8961, 2001–35 I.R.B.194
8962, 2001–35 I.R.B.201
8963, 2001–35 I.R.B.197
8964, 2001–42 I.R.B.320
8965, 2001–43 I.R.B.344
8966, 2001–45 I.R.B.422
8967, 2001–50 I.R.B.568
December 26, 2001iii2001–52 I.R.B.

Finding List of Current Actions
on Previously Published Items
1
Bulletins 2001–27 through 2001–51
Announcements:
2000–48
Modified by
Notice 2001–43, 2001–30 I.R.B.72
Notices:
98–52
Modified by
Notice 2001–56, 2001–38 I.R.B.277
99–41
Modified and superseded by
Notice 2001–62, 2001–38 I.R.B.307
2001–4
Modified by
Notice 2001–43, 2001–30 I.R.B.72
2001–9
Modified by
Notice 2001–46, 2001–32 I.R.B.122
2001–15
Supplemented by
Notice 2001–51, 2001–34 I.R.B.190
2001–42
Modified by
Notice 2001–57, 2001–38 I.R.B.279
2001–70
Clarified and supplemented by
Notice 2001–74, 2001–49 I.R.B.551
Proposed Regulations:
LR–97–79
Withdrawn by
REG–100548–01, 2001–29 I.R.B.67
LR–107–84
Withdrawn by
REG–100548–01, 2001–29 I.R.B.67
REG–110311–98
Supplemented by
T.D. 8961, 2001–35 I.R.B.194
REG–106917–99
Corrected by
Ann. 2001–86, 2001–35 I.R.B.207
REG–103735–00
Supplemented by
T.D. 8961, 2001–35 I.R.B.194
REG–103736–00
Supplemented by
T.D. 8961, 2001–35 I.R.B.194
REG–107186–00
Corrected by
Ann. 2001–71, 2001–27 I.R.B.26
Proposed Regulations—Continued
REG–130477–00
Supplemented by
Ann. 2001–82, 2001–32 I.R.B.123
REG–130481–00
Supplemented by
Ann. 2001–82, 2001–32 I.R.B.123
Revenue Procedures:
83–74
Revoked by
Rev. Proc. 2001–49, 2001–39 I.R.B.300
84–84
Revoked by
Rev. Proc. 2001–49, 2001–39 I.R.B.300
93–27
Clarified by
Rev. Proc. 2001–43, 2001–34 I.R.B.191
97–13
Modified by
Rev. Proc. 2001–39, 2001–28 I.R.B.38
97–19
Modified by
Notice 2001–62, 2001–40 I.R.B.307
98–44
Superseded by
Rev. Proc. 2001–40, 2001–33 I.R.B.130
99–27
Superseded by
Rev. Proc. 2001–42, 2001–36 I.R.B.212
99–49
Modified and amplified by
Rev. Proc. 2001–46, 2001–37 I.R.B.263
Rev. Rul. 2001–60, 2001–51 I.R.B.587
2000–20
Modified by
Notice 2001–42, 2001–30 I.R.B.70
Rev. Proc. 2001–55, 2001–49 I.R.B.552
2000–27
Modified by
Rev. Proc. 2001–55, 2001–49 I.R.B.552
2000–28
Superseded by
Rev. Proc. 2001–50, 2001–45 I.R.B.437
2000–39
Corrected by
Ann. 2001–73, 2001–28 I.R.B.40
Superseded by
Rev. Proc. 2001–47, 2001–42 I.R.B.332
2000–48
Superseded by
Rev. Proc. 2001–54, 2001-48 I.R.B.530
2001–2
Modified by
Rev. Proc. 2001–41, 2001–33 I.R.B.173
Revenue Procedures—Continued
2001–3
Modified by
Rev. Proc. 2001–51, 2001–43 I.R.B.369
2001–6
Modified by
Notice 2001–42, 2001–30 I.R.B.70
Rev. Proc. 2001–55, 2001–49 I.R.B.552
Revenue Rulings:
55–290
Modified and superseded by
Rev. Rul. 2001–60, 2001–51 I.R.B.587
57–589
Obsoleted by
REG–106917–99, 2001–27 I.R.B.4
65–316
Obsoleted by
REG–106917–99, 2001–27 I.R.B.4
67–274
Amplified by
Rev. Rul. 2001–46, 2001–42 I.R.B.321
68–125
Obsoleted by
REG–106917–99, 2001–27 I.R.B.4
69–563
Obsoleted by
REG–106917–99, 2001–27 I.R.B.4
70–379
Obsoleted by
Rev. Rul. 2001–39, 2001–33 I.R.B.125
74–326
Obsoleted by
REG–106917–99, 2001–27 I.R.B.4
78–127
Modified by
Rev. Rul. 2001–40, 2001–38 I.R.B.276
78–179
Obsoleted by
REG–106917–99, 2001–27 I.R.B.4
89–42
Modified and superseded by
Rev. Rul. 2001–48, 2001–42 I.R.B.324
90–95
Distinguished by
Rev. Rul. 2001–42, 2001–42 I.R.B.321
92–19
Supplemented by
Rev. Rul. 2001–38, 2001–33 I.R.B.124
97–31
Modified and superseded by
Rev. Rul. 2001–48, 2001–42 I.R.B.324
1
A cumulative list of current actions on previously published
items in Internal Revenue Bulletins 2001–1 through 2001–26 is
in Internal Revenue Bulletin 2001–27, dated July 2, 2001.
2001–52 I.R.BivDecember 26, 2001

Treasury Decisions:
8948
Corrected by
Ann. 2001–90, 2001–35 I.R.B.208
December 26, 2001v2001–52 I.R.B.

2001–52 I.R.BDecember 26, 2001

December 26, 20012001–52 I.R.B.