us-irs-announcements-irb-2002-50-pdf•Internal Revenue Bulletin 2002-50 (PDF rendition): IRS Announcements
Internal Revenue Bulletin 2002-50 (PDF rendition): IRS Announcements
us-irs-announcements-irb-2002-50-pdfInternal Revenue Bulletin 2002-50 (PDF rendition): IRS AnnouncementsGuidance
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.
# Internal Revenue bulletin
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## HIGHLIGHTS OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
## SPECIAL ANNOUNCEMENT
### Announcement 2002-110, page 970.
The Service has extended the time to apply to participate in the
settlement initiative for Contingent Liability Transactions, the pro-
cedures for which were prescribed in Rev. Proc. 2002-67,
2002-43 I.R.B. 733. In order to allow taxpayers a longer op-
portunity to consider the settlement initiative, the settlement meth-
odology they wish to select, and to assemble the necessary
information, the Service has extended the application date from
January 2, 2003, to March 5, 2003.
## INCOME TAX
Rev. Rul. 2002-70, page 958.
Interest rates; underpayments and overpayments. The rate
of interest determined under section 6621 of the Code for the
calendar quarter beginning January 1, 2003, will be 5 percent
for overpayments (4 percent in the case of a corporation), 5 per-
cent for underpayments, and 7 percent for large corporate un-
derpayments. The rate of interest paid on the portion of a
corporate overpayment exceeding $10,000 will be 2.5 per-
cent.
### T.D. 9023, page 955.
Final regulations under section 1441 of the Code provide rules
to allow withholding agents, who are also acceptance agents, to
rely on a beneficial owner withholding certificate that does not
contain an individual taxpayer identifying number (ITIN), in lim-
ited circumstances when the IRS is not issuing ITINs. Specifi-
cally, the regulations have the effect of: (1) allowing certain
withholding agents to obtain ITINs on an expedited basis for for-
eign individuals receiving unexpected payments and claiming tax
treaty benefits with respect to those payments; and (2) allow-
ing withholding agents to make unexpected payments to for-
eign individuals, who do not possess ITINs, when the use of the
expedited process is unavailable.
Finding Lists begin on page ii.
Department of the Treasury
Internal Revenue Service
### REG-127380-02, page 969.
Proposed regulations provide guidance regarding the applica-
tion of section 367(e)(2) of the Code to certain outbound liqui-
dations. The regulations amend the anti-abuse rule of section
1.367(e)-2(d) by narrowing the scope of the rule to apply only
to outbound transfers to a foreign corporation in a complete liq-
uidation of a domestic corporation in which a principal pur-
pose of the liquidation is the avoidance of U.S. tax. A public
hearing is scheduled for March 3, 2003.
### Notice 2002-79, page 964.
Gross income; advance payments. This notice proposes a
revenue procedure that, if finalized, will modify and supersede
Rev. Proc. 71-21, 1971-2 C.B. 549, and allow taxpayers us-
ing an accrual method of accounting to defer the inclusion of ad-
vance payments in gross income for federal income tax purposes
in certain limited situations.
## EMPLOYEE PLANS
Rev. Rul. 2002-84, page 953.
Overpayment, offset and repayment. This ruling describes
three situations where there are overpayments of benefits from
a qualified plan within the meaning of section 401(a) of the Code,
the tax consequences of those overpayments, and the subse-
quent offsets by the plan or repayment to the plan.
## ADMINISTRATIVE
Announcement 2002-111, page 971.
This document contains a correction to the date of the public hear-
ing on proposed regulations (REG-143321-02, 2002-48 I.R.B.
922) under section 6043(c) of the Code relating to information
reporting of taxable stock transactions. The hearing is resched-
uled from March 5, 2003, to March 25, 2003.
Announcement 2002-112, page 971.
This document contains corrections to final regulations (T.D.
9016, 2002-40 I.R.B. 628) under section 141 of the Code re-
lating to the definition of private activity bonds applicable to tax-
exempt bonds issued by state and local governments for output
facilities.
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## The IRS Mission
Provide America's taxpayers top quality service by helping them
understand and meet their tax responsibilities and by applying
the tax law with integrity and fairness to all.
### Introduction
The Internal Revenue Bulletin is the authoritative instrument of the
Commissioner of Internal Revenue for announcing official rul-
ings and procedures of the Internal Revenue Service and for pub-
lishing Treasury Decisions, Executive Orders, Tax Conventions,
legislation, court decisions, and other items of general inter-
est. It is published weekly and may be obtained from the Super-
intendent of Documents on a subscription basis. Bulletin contents
are consolidated semiannually into Cumulative Bulletins, which
are sold on a single-copy basis.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application of
the tax laws, including all rulings that supersede, revoke, modify,
or amend any of those previously published in the Bulletin. All pub-
lished rulings apply retroactively unless otherwise indicated. Pro-
cedures relating solely to matters of internal management are
not published; however, statements of internal practices and pro-
cedures that affect the rights and duties of taxpayers are pub-
lished.
Revenue rulings represent the conclusions of the Service on the
application of the law to the pivotal facts stated in the revenue
ruling. In those based on positions taken in rulings to taxpay-
ers or technical advice to Service field offices, identifying de-
tails and information of a confidential nature are deleted to prevent
unwarranted invasions of privacy and to comply with statutory
requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be re-
lied on, used, or cited as precedents by Service personnel in the
disposition of other cases. In applying published rulings and pro-
cedures, the effect of subsequent legislation, regulations, court
decisions, rulings, and procedures must be considered, and Ser-
vice personnel and others concerned are cautioned against reach-
ing the same conclusions in other cases unless the facts and
circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
#### Part I .- 1986 Code.
This part includes rulings and decisions based on provisions of
the Internal Revenue Code of 1986.
#### Part II .- Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A, Tax
Conventions and Other Related Items, and Subpart B, Legisla-
tion and Related Committee Reports.
Part III .- Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these sub-
jects are contained in the other Parts and Subparts. Also in-
cluded in this part are Bank Secrecy Act Administrative Rulings.
Bank Secrecy Act Administrative Rulings are issued by the De-
partment of the Treasury's Office of the Assistant Secretary (En-
forcement).
#### Part IV .- Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
The first Bulletin for each month includes a cumulative index for
the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the first Bulletin of the succeeding semiannual pe-
riod, respectively.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402.
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## Part I. Rulings and Decisions Under the Internal Revenue Code of 1986
### Section 165 .- Losses
Whether under the described facts, overpayments
from qualified plans are deductible if the overpay-
ment is offset or repaid to the qualified plan. See Rev.
Rul. 2002-84, on this page.
### Section 402 .- Taxability of Beneficiary of Employees' Trust
(Also: §§ 165 and 1341.)
Overpayment; offset and repayment.
This ruling describes three situations where
there are overpayments of benefits from a
qualified plan within the meaning of sec-
tion 401(a) of the Code, the tax conse-
quences of those overpayments, and the
subsequent offsets by the plan or repay-
ment to the plan.
### Rev. Rul. 2002-84
### ISSUES
(1) Under the facts described below,
what amount is required to be treated as a
distribution in a year in which payments
made to an individual by a qualified re-
tirement plan described in § 401(a) of the
Internal Revenue Code are reduced be-
cause, in a prior year, the individual re-
ceived payments in excess of the amounts
due to the individual?
(2) Under the facts described below, is
an individual entitled to a deduction to re-
flect a payment to a qualified retirement
plan described in § 401(a) to repay the plan
for payments made by the plan to the in-
dividual in a prior year in excess of the
amounts due to the individual in that prior
year?
### FACTS
Situation (1). Employer X maintains Plan
A, a qualified defined benefit plan de-
scribed in § 401(a). Plan A does not pro-
vide for employee contributions. At the
beginning of 2001, Employee D retired and
started to receive a straight life annual an-
nuity of $36,000 from Plan A. Employee
D included $36,000 in gross income in
2001. In June 2002, it was determined that
Employee D's annuity benefit had been
miscalculated and the annuity payment for
2001 should have been $35,000. Under the
administrative procedures of Plan A, which
are in accordance with the relevant correc-
tion procedures of the Employee Plans
Compliance Resolution System ("EPCRS"),
Rev. Proc. 2002-47, 2002-29 I.R.B. 133,
erroneous payments from the plan can be
corrected by recouping the entire excess
payment made in 2001 from Employee D's
remaining benefit payments for 2002. Thus,
Employee D's annual straight life annu-
ity benefit for 2002 of $35,000 is reduced
to $33,940 to reflect the excess benefit
amounts (increased by interest) that were
paid from Plan A to Employee D during
2001.
Situation (2). Employer Y maintains Plan
B, a qualified defined benefit plan described
in § 401(a). Plan B does not provide for em-
ployee contributions. Employee E, who is
a participant in Plan B, retired in 1992 and
started to receive an annual straight life an-
nuity of $14,000 from Plan B. In Novem-
ber 2002, it was determined that Employee
E's annuity benefit had been miscalcu-
lated and that the annual payment for 1992
through 2001 should have been $13,000.
Thus, Plan B overpaid Employee E by
$1,000 per year for 10 years and Employee
E included these amounts in gross income
in the years received. Under the adminis-
trative procedures of Plan B, erroneous pay-
ments from the plan can be recouped by
reducing future payments so that the actu-
arial present value of the reduction is equal
to the erroneous overpayments plus inter-
est attributable to the overpayment based
on Plan B's interest rate factors. Plan B's
correction method is consistent with the pro-
cedures of EPCRS. The administrator of
Plan B determines that to recoup the over-
payment, future payments should be re-
duced $900 annually for life commencing
in 2002. Plan B adjusts Employee E's an-
nuity accordingly so that Employee E's an-
nual straight life annuity benefit of $13,000
is reduced for 2002 and subsequent years
to $12,100 to reflect the excess benefit
amounts (increased by interest) that were
paid from Plan B to Employee E.
Situation (3). The facts are the same as
in Situation (1), except that the benefit was
paid to Employee F in a single-sum dis-
tribution in 2001. The amount of the single-
sum distribution exceeded the amount that
was due Employee F by $2,000. Employee
F included the entire amount of the single-
sum distribution in gross income in 2001.
In 2002, Plan A's administrator discov-
ered the overpayment to Employee F. Pur-
suant to the plan's procedures, the
administrator of Plan A notified Employee
F of the overpayment and demanded re-
payment with appropriate interest. In 2002,
Employee F repaid $2,120 (the $2,000 over-
payment plus $120 interest) to Plan A.
### LAW AND ANALYSIS
Section 61(a) provides that, except as
otherwise provided, gross income means all
income from whatever source derived.
Section 402(a) provides that any amount
actually distributed to any distributee from
a qualified plan described in § 401(a) will
be taxable to the distributee in the tax-
able year of distribution under § 72 (relat-
ing to annuities).
Section 165(a) provides that there shall
be allowed as a deduction any loss sus-
tained during the taxable year that is not
compensated by insurance or otherwise.
Section 165(c) limits the deduction under
§ 165(a) for individuals to losses incurred
in a trade or business, losses incurred in
transactions entered into for profit, and ca-
sualty losses. The performance of services
as an employee is the carrying on of a trade
or business. (See Rev. Rul. 79-322, 1979-2
C.B. 76, and Rev. Rul. 82-178, 1982-2
C.B. 59.)
Section 67(a) provides that in the case
of an individual, the miscellaneous item-
ized deductions for any taxable year shall
be allowed only to the extent that the ag-
gregate of such deductions exceeds
2-percent of adjusted gross income.
Section 451(a) provides that the amount
of any item of gross income shall be in-
cluded in the taxable year in which re-
ceived by the taxpayer unless the amount
is to be properly accounted for in a differ-
ent period.
Section 1.451-1(a) of the Income Tax
Regulations provides that under the cash re-
ceipts and disbursements method of ac-
counting, an item of income is included in
gross income for the taxable year in which
such item is actually or constructively re-
ceived.
Section 1341(a) provides rules for the
computation of tax where a taxpayer is en-
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titled to a deduction in excess of $3,000 as
a result of restoring an amount included in
gross income for a prior taxable year be-
cause it appeared that the taxpayer had an
unrestricted right to such amount. The
amount of the tax imposed on the tax-
payer under § 1341 is the lesser of the tax
for the taxable year computed with the de-
duction or an amount equal to the tax for
the taxable year computed without the de-
duction but minus the decrease in tax for
the prior tax year or years after excluding
the income. Under § 67(b)(9), a deduc-
tion under § 1341 is not a miscellaneous
itemized deduction subject to the 2-percent
adjusted gross income floor of § 67(a).
Rev. Rul. 67-350, 1967-2 C.B. 58,
which addresses the income tax treatment
of a reduction in military retirement pay to
offset a previously received lump-sum re-
adjustment payment, holds that only the re-
mainder of the retired reservist's military
retirement pay is includible in the retir-
ee's gross income. Thus, the retiree in-
cluded in gross income only amounts that
he actually or constructively received based
on the principles of §§ 61 and 451.
Rev. Rul. 80-9, 1980-1 C.B. 11, holds
that a taxpayer who had amounts with-
held from his disability pay to repay a
lump-sum readjustment payment is con-
sidered as never having received the
amounts withheld. The ruling concluded that
there was no constructive receipt of the
withheld disability pay.
Rev. Rul. 82-178 holds that repayment
of amounts by a rehired employee in or-
der that certain employee benefits would be
restored to the level that they were at the
time the rehired employee was laid off is
a loss incurred under § 165(c)(1).
Rev Rul. 79-322 holds that a repay-
ment of amounts received by an employee
for sick leave that was includible in the em-
ployee's gross income in a prior taxable
year is deductible as a business loss un-
der § 165.
Sections 402(a) and 403(a) specifically
address the tax treatment of distributions
from qualified retirement plans. Under these
provisions, amounts payable under a quali-
fied retirement plan are included in gross
income of the participant in the taxable year
of distribution. The amounts are taxable to
a distributee at the time of receipt, even
though the distributee may be later obli-
gated to repay amounts attributable to a plan
overpayment in subsequent taxable years,
either by direct payment or by payment re-
duction. Consequently, in Situations (1), (2),
and (3), the amounts attributable to a plan
overpayment are distributions taxable un-
der § 402(a) in the year of receipt.
In years after the year of the plan over-
payment, under the facts presented in Situ-
ations (1) and (2), only the amounts
received by the distributee after the plan's
required reduction to recoup an earlier plan
overpayment are included in the distribu-
tee's gross income in the taxable year of
distribution. This ruling is consistent with
Rev. Ruls. 67-350 and 80-9, which held
that there was no constructive receipt of
withheld military retirement pay that was
used to offset amounts previously received
as a lump-sum readjustment pay for re-
serve officers.
Consequently, the qualified retirement
plan participants in Situations (1) and (2)
who received distributions that included
overpayments, and included the full amount
of these distributions in gross income in the
year of distribution, are in subsequent years
only required to treat as distributions tax-
able under § 402(a) amounts distributed by
the plan after offset or adjustment to cor-
rect for the prior overpayments. Because the
participants in Situations (1) and (2) are not
treated as receiving the amounts attribut-
able to the offset or adjustment, these par-
ticipants cannot take a loss deduction under
§ 165(a) as a result of such offset or ad-
justment. See Rev. Rul. 80-9. The tax re-
sult for Situations (1) and (2) is limited to
situations in which the amount of the plan
overpayment was included in the gross in-
come of the participant for the year the
overpayment was distributed to the partici-
pant and the qualified retirement plan has
demanded the adjustment or offset to re-
coup the plan overpayment.
In contrast to Situations (1) and (2), in
Situation (3), the overpayment is not re-
couped by a reduction in the amount of
benefits paid to a participant but instead is
repaid by the taxpayer directly in a single-
sum payment. For overpayments repaid to
a qualified retirement plan in the same tax-
able year as the overpayment, the amount
repaid reduces the taxable amount received
as a distribution by the participant from the
plan in the taxable year. For overpayments
repaid to a qualified retirement plan in a
taxable year or years subsequent to the year
of the overpayment, a participant would be
entitled to a deduction under § 165(a) be-
cause the amount of the plan overpay-
ment is attributable to compensation for
services rendered to the employer. The de-
duction is allowable in the year that the
single-sum repayment is paid by the tax-
payer, but only if the taxpayer itemizes his
deductions. A deduction under § 165(a) for
an individual with losses that are incurred
in a trade or business is considered a mis-
cellaneous itemized deduction and, thus, is
subject to the 2-percent floor established un-
der § 67(a) for miscellaneous itemized de-
ductions.
If the amount of the distribution in Situ-
ation (3) had instead exceeded the amount
that was due Employee F by more than
$3,000, the rules of § 1341 would apply in
determining the taxpayer's income tax li-
ability for 2002. In applying the rules of
§ 1341, the deduction is determined with-
out regard to the 2-percent floor as pro-
vided under § 67(b)(9).
### HOLDINGS
#### Issue 1:
Under Situations (1) and (2), in which
an individual's payments from a quali-
fied retirement plan are reduced in one or
more taxable years to recoup overpay-
ments made in prior taxable years and prop-
erly included in gross income in such prior
years, only the amounts received by the in-
dividual after the plan's required reduc-
tion to recoup an earlier plan overpayment
are includible in the individual's gross in-
come in the taxable year of distribution. The
individuals under Situations (1) and (2),
with respect to the offset or adjustment, are
not eligible for a deduction under § 165(a)
for a loss incurred in a trade or business.
Accordingly, in Situation (1), Employee D
includes $33,940 as a distribution from Plan
A under § 402(a) for 2002. Similarly, in
Situation (2), Employee E includes $12,100
as a distribution from Plan B under § 402(a)
for 2002 and for each subsequent year in
which a distribution is received.
#### Issue 2:
Under Situation (3), when an individual
repays in the current year an overpayment
made by a qualified retirement plan in a
previous year, the amount actually paid in
the previous year was properly included in
gross income. The amount of the repay-
ment is deductible under § 165(a). Accord-
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ingly, the $2,120 repaid to Plan A is
deductible for 2002, subject to the rules of
§ 67(a).
### DRAFTING INFORMATION
The principal author of this revenue rul-
ing is Michael Rubin of the Employee
Plans, Tax Exempt and Government Enti-
ties Division. For further information re-
garding this revenue ruling, please contact
the Employee Plans' taxpayer assistance
telephone service at 1-877-829-5500 (a
toll-free number), between the hours of 8:00
a.m. and 6:30 p.m. Eastern time, Monday
through Friday. Mr. Rubin may be reached
at 1-202-283-9888 (not a toll-free number).
### Section 1341 .- Computation of Tax Where Taxpayer Re- stores Substantial Amount Held Under Claim of Right
Whether under the described facts, an overpay-
ment from a qualified plan is deductible as a claim
of right when the overpayment from the qualified plan
is offset. See Rev. Rul. 2002-84, page 953.
### Section 1441 .- Withholding of Tax on Nonresident Aliens
26 CFR 1.1441-1: Requirement for the deduction
and withholding of tax on payments to foreign
persons.
#### T.D. 9023
### DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Parts 1 and 301
### Taxpayer Identification Number Rule Where Taxpayer Claims Treaty Rate and Is Entitled to an Unexpected Payment
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations and removal
of temporary regulations.
SUMMARY: This document contains fi-
nal regulations that provide additional guid-
ance needed to comply with the withholding
rules under section 1441 and conforming
changes to the regulations under section
6109. Specifically, these final regulations
provide rules that facilitate compliance by
withholding agents where foreign individu-
als who are claiming reduced rates of with-
holding under an income tax treaty receive
an unexpected payment from the withhold-
ing agent and do not possess the required
individual taxpayer identification num-
ber.
DATES: Effective date: These regulations
are effective November 22, 2002.
Applicability date: For dates of appli-
cability, see §§ 1.1441-6(h)(1) and
301.6109-1(g)(3).
FOR FURTHER INFORMATION
CONTACT: Jonathan A. Sambur (202)
622-3840 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
#### Background
On January 17, 2002, the IRS and Trea-
sury published a notice of proposed rule-
making by cross reference to temporary
regulations (REG-159079-01, 2002-6
I.R.B. 493) in the Federal Register (67 FR
2387), and temporary regulations in T.D.
8977, 2002-6 I.R.B. 463 (67 FR 2327), un-
der section 1441 and conforming changes
to the regulations under section 6109 of the
Internal Revenue Code (Code). Written
comments and requests for a public hear-
ing were solicited. Several comments were
received and are discussed below. No pub-
lic hearing was requested. After consider-
ation of all the comments, the proposed and
temporary regulations under sections 1441
and 6109 are adopted as final regulations
with no changes.
### Summary of Public Comments and Explanation of Revisions
A. § 1.1441-6(c) Exemption from
Requirement to Furnish a Taxpayer
Identifying Number
Section 1.1441-6(c) provides an exemp-
tion from the requirement to furnish a tax-
payer identifying number (TIN) for certain
types of income.
One commentator suggested that a for-
eign individual receiving a distribution of
a death benefit from a U.S. retirement plan
should be allowed to claim treaty ben-
efits without obtaining an individual tax-
payer identification number (ITIN).
This comment is not directly related to
these proposed regulations. Exemptions
from the requirement to furnish a TIN were
addressed in final regulations promulgated
under section 1441 (T.D. 8734, 1997-2 C.B.
109). The IRS and Treasury do not be-
lieve that there has been any change in cir-
cumstances that warrants a change of the
rules contained in § 1.1441-6(c).
B. § 1.1441-1(e)(4)(ii)(B)(1) Indefinite
Validity of a Withholding Certificate
Provided Certain Conditions are Met
Under § 1.1441-1(e)(4)(ii)(A), a Form
W-8BEN, Certificate of Foreign Status of
Beneficial Owner for United States Tax
Withholding, generally will expire either at
the end of the third calendar year follow-
ing the date the certificate was signed or
when a change in circumstances occurs that
makes any information on the Form
W-8BEN incorrect, whichever is earlier.
Section 1.1441-1(e)(4)(ii)(B)(1) permits a
Form W-8BEN to remain valid indefi-
nitely, provided the withholding agent re-
ports at least one payment annually and the
certificate contains a TIN.
One commentator requested that a Form
W-8BEN remain valid indefinitely with-
out regard to the requirement that it con-
tain a TIN. The commentator also proposed
that a Form W-8BEN remain valid indefi-
nitely, even if the withholding agent re-
ports no annual payments to the beneficial
owner.
This comment is not directly related to
these proposed regulations. The period of
validity of a beneficial owner's withhold-
ing certificate was addressed in final regu-
lations promulgated under section 1441
(T.D. 8734). The IRS and Treasury do not
believe that there has been any change in
circumstances that warrants a change of the
rules contained in § 1.1441-1(e)(4)(ii)(B)(1).
The IRS and Treasury continue to believe
that it is important for taxpayers to re-
certify status periodically when no pay-
ments are reported because withholding
agents would be unaware of any change in
the taxpayer's status.
C. § 1.1441-6(h)(2)(i) Special
Acceptance Agent Requirement
The proposed regulations provide that a
withholding agent, who is also an accep-
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2002-50 I.R.B.
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tance agent, may enter into an agreement
with the IRS that permits the acceptance
agent to request an ITIN on an expedited
basis because of the circumstances of pay-
ment or the unexpected nature of payments
required to be made by the payor (special
acceptance agent agreement). One com-
mentator requested that certifying accep-
tance agents, as described in Rev. Proc.
96-52 (1996-2 C.B. 372), be permitted to
utilize the expedited process, described in
§ 1.1441-6(h)(2), without entering into a
special acceptance agent agreement with the
IRS.
The commentator's suggestion was not
adopted. The purpose of entering into a spe-
cial acceptance agent agreement with the
IRS is to provide notice to the IRS that the
acceptance agent is seeking to utilize the
expedited process and to have the accep-
tance agent agree to follow the special pro-
cedures necessary to complete that process.
In contrast, a certifying acceptance agent
agreement permits the acceptance agent to
review and certify the applicant's ability to
qualify for an ITIN. Because the purpose
and scope of a certifying acceptance agent
agreement differ from the purpose and
scope of the special acceptance agent agree-
ment, a separate agreement permitting the
use of the expedited process must be en-
tered into between the acceptance agent and
the IRS.
D. § 1.1441-6(h)(2)(ii) Unexpected
Payment Requirement
In order to lessen the administrative bur-
den on foreign individuals receiving un-
expected payments, the proposed regulations
provide a limited exception to the require-
ment that a foreign individual provide a TIN
to the withholding agent before obtaining
a reduced rate of withholding tax under an
income tax treaty. One commentator re-
quested that the IRS should eliminate the
unexpected payment requirement of
§ 1.1441-6(h)(2)(ii) and permit the use of
the expedited process by any foreign indi-
vidual regardless of whether the payor or
payee knows of the impending payment.
The commentator's suggestion was not
adopted. The expedited process has been
initiated in limited circumstances in order
to lessen the administrative burden on for-
eign individuals receiving unexpected pay-
ments. Although the IRS is continuing to
consider increasing the availability of this
expedited process in the future, the par-
ticular administrative issue addressed in
these regulations generally does not exist
with respect to expected payments. Thus,
there is not a compelling reason to ex-
tend the expedited process at this time.
### Special Analyses
It has been determined that this Trea-
sury decision is not a significant regula-
tory action as defined in Executive Order
12866. Therefore, a regulatory assessment
is not required. It has also been determined
that section 553(b) of the Administrative
Procedure Act (5 U.S.C. chapter 5) does not
apply to these regulations. These regula-
tions impose no new collection of infor-
mation on small entities; therefore, a
Regulatory Flexibility Analysis under the
Regulatory Flexibility Act (5 U.S.C. chap-
ter 6) is not required. Pursuant to section
7805(f) of the Code, the proposed regula-
tions preceding these regulations were sub-
mitted to the Chief Counsel for Advocacy
of the Small Business Administration for
comment on its impact on small business.
### Drafting Information
The principal author of these regula-
tions is Jonathan A. Sambur, Office of the
Associate Chief Counsel (International).
However, other personnel from the IRS and
Treasury Department participated in their
development.
* * * * *
### Adoption of Amendments to the Regulations
Accordingly, 26 CFR parts 1 and 301 are
amended as follows:
PART 1-INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.1441-0 is amended by
redesignating the entries for paragraph (g)
of § 1.1441-6 as paragraph (h) and revis-
ing the entry for newly designated para-
graph (h), and adding new entries for
paragraphs (g) through (g)(5) to read as
follows:
§ 1.1441-0 Outline of regulations
provisions for section 1441.
* * * * *
(g) Special taxpayer identifying number rule
for certain foreign individuals claiming
treaty benefits.
(1) General rule.
(2) Special rule.
(3) Requirement that an ITIN be requested
during the first business day following pay-
ment.
(4) Definition of unexpected payment.
(5) Examples.
(h) Effective dates.
* * * * *
Par. 3. Section 1.1441-1 is amended by
adding paragraph (b)(7)(i)(D) to read as
follows:
§ 1.1441-1 Requirement for the
deduction and withholding of tax on
payments to foreign persons.
* * * * *
(b) * * *
(7) * * *
(i) * * *
(D) The withholding agent has com-
plied with the provisions of § 1.1441-
6(c) or (g).
* * * * *
#### § 1.1441-1T [Removed]
Par. 4. Section 1.1441-1T is removed.
Par. 5. Section 1.1441-6 is amended as
follows:
1\. The fifth sentence of paragraph (b)(1)
is amended by removing the language "and
§ 1.1441-6T(h)" and adding "and § 1.1441-
6(g)" in its place.
2\. Paragraph (g) is redesignated as para-
graph (h) and new paragraph (g) is added.
3\. Newly designated paragraph (h) sec-
tion heading is revised.
4\. Newly designated paragraph (h)(1) is
revised.
5\. Newly designated paragraph (h)(2) is
amended by removing the language "(g)(2)"
and adding "(h)(2)" in its place each place
it appears in the third and fourth sentences.
The addition and revisions read as
follows:
§ 1.1441-6 Claim of reduced
withholding under an income tax treaty.
* * * * *
(g) Special taxpayer identifying num-
ber rule for certain foreign individuals
claiming treaty benefits-(1) General rule.
Except as provided in paragraph (c) or
(g)(2) of this section, for purposes of para-
<!-- PageFooter="December 16, 2002" -->
<!-- PageFooter="2002-50 I.R.B." -->
<!-- PageBreak -->
graph (b)(1) of this section, a withhold-
ing agent may not rely on a beneficial
owner withholding certificate, described in
paragraph (b)(1) of this section, that does
not include the beneficial owner's tax-
payer identifying number (TIN).
(2) Special rule. For purposes of satis-
fying the TIN requirement of paragraph
(b)(1) of this section, a withholding agent
may rely on a beneficial owner withhold-
ing certificate, described in such para-
graph, without regard to the requirement
that the withholding certificate include the
beneficial owner's TIN, if -
(i) A withholding agent, who is also an
acceptance agent, as defined in § 301.6109-
1(d)(3)(iv) of this chapter (the payor), has
entered into an acceptance agreement that
permits the acceptance agent to request an
individual taxpayer identification number
(ITIN) on an expedited basis because of the
circumstances of payment or unexpected na-
ture of payments required to be made by
the payor;
(ii) The payor was required to make an
unexpected payment to the beneficial owner
who is a foreign individual;
(iii) An ITIN for the beneficial owner
cannot be received by the payor from the
Internal Revenue Service (IRS) because the
IRS is not issuing ITINs at the time of pay-
ment or any time prior to the time of pay-
ment when the payor has knowledge of the
unexpected payment;
(iv) The unexpected payment to the ben-
eficial owner could not be reasonably de-
layed to permit the payor to obtain an ITIN
for the beneficial owner on an expedited ba-
sis; and
(v) The payor satisfies the provisions of
paragraph (g)(3) of this section.
(3) Requirement that an ITIN be re-
quested during the first business day fol-
lowing payment. The payor must submit a
beneficial owner payee application for an
ITIN (Form W-7, Application for IRS In-
dividual Taxpayer Identification Number)
that complies with the requirements of
§ 301.6109-1(d)(3)(ii) of this chapter, and
also the certification described in
§ 301.6109-1(d)(3)(iv)(A)(4) of this chap-
ter, to the IRS during the first business day
after payment is made.
(4) Definition of unexpected payment.
For purposes of this section, an unexpected
payment is a payment that, because of the
nature of the payment or the circumstances
in which it is made, could not reasonably
have been anticipated by the payor or ben-
eficial owner during a time when the payor
or beneficial owner could obtain an ITIN
from the IRS. For purposes of this para-
graph (g)(4), a payor or beneficial owner
will not lack the requisite knowledge of the
forthcoming payment solely because the
amount of the payment is not fixed.
(5) Examples. The rules of this para-
graph (g) are illustrated by the following
examples:
Example 1. G, a citizen and resident of Country
Y, a country with which the United States has an in-
come tax treaty that exempts U.S. source gambling
winnings from U.S. tax, is visiting the United States
for the first time. During his visit, G visits Casino B,
a casino that has entered into a special acceptance
agent agreement with the IRS that permits Casino B
to request an ITIN on an expedited basis. During that
visit, on a Sunday, G wins $5000 in slot machine play
at Casino B and requests immediate payment from Ca-
sino B. ITINs are not available from the IRS on Sun-
day and would not again be available until Monday.
G, who does not have an individual taxpayer identi-
fication number, furnishes a beneficial owner with-
holding certificate, described in § 1.1441-1(e)(2), to
the Casino upon winning at the slot machine. The ben-
eficial owner withholding certificate represents that
G is a resident of Country Y (within the meaning of
the U.S. - Y tax treaty) and meets all applicable re-
quirements for claiming benefits under the U.S. - Y
tax treaty. The beneficial owner withholding certifi-
cate does not, however, contain an ITIN for G. On the
following Monday, Casino B faxes a completed Form
W-7, including the required certification, for G, to the
IRS for an expedited ITIN. Pursuant to paragraph (b)
and (g)(2) of this section, absent actual knowledge or
reason to know otherwise, Casino B, may rely on the
documentation furnished by G at the time of pay-
ment and pay the $5000 to G without withholding U.S.
tax based on the treaty exemption.
Example 2. The facts are the same as Example 1,
except G visits Casino B on Monday. G requests pay-
ment Monday afternoon. In order to pay the win-
nings to G without withholding the 30 percent tax,
Casino B must apply for and obtain an ITIN for G be-
cause an expedited ITIN is available from the IRS at
the time of the $5000 payment to G.
Example 3. The facts are the same as Example 1,
except G requests payment fifteen minutes before the
time when the IRS begins issuing ITINs. Under these
facts, it would be reasonable for Casino B to delay
payment to G. Therefore, Casino B must apply for and
obtain an ITIN for G if G wishes to claim an exemp-
tion from U.S. withholding tax under the U.S. - Y tax
treaty at the time of payment.
Example 4. P, a citizen and resident of Country Z,
is a lawyer and a well-known expert on real estate
transactions. P is scheduled to attend a three-day semi-
nar on complex real estate transactions, as a partici-
pant, at University U, a U.S. university, beginning on
a Saturday and ending on the following Monday, which
is a holiday. University U has entered into a special
acceptance agent agreement with the IRS that per-
mits University U to request an ITIN on an expe-
dited basis. Country Z is a country with which the
United States has an income tax treaty that exempts
certain income earned from the performance of in-
dependent personal services from U.S. tax. It is P's
first visit to the United States. On Saturday, prior to
the start of the seminar, Professor Q, one of the lec-
turers at the seminar, cancels his lecture. That same
day the Dean of University U offers P $5000, to re-
place Professor Q at the seminar, payable at the con-
clusion of the seminar on Monday. P agrees. P gives
her lecture Sunday afternoon. ITINs are not avail-
able from the IRS on that Saturday, Sunday, or Mon-
day. After the seminar ends on Monday, P, who does
not have an ITIN, requests payment for her teach-
ing. P furnishes a beneficial owner withholding cer-
tificate, described in § 1.1441-1(e)(2), to University
U that represents that P is a resident of Country Z
(within the meaning of the U.S. - Z tax treaty) and
meets all applicable requirements for claiming ben-
efits under the U.S. - Z tax treaty. The beneficial owner
withholding certificate does not, however, contain an
ITIN for P. On Tuesday, University U faxes a com-
pleted Form W-7, including the required certifica-
tion, for P, to the IRS for an expedited ITIN. Pursuant
to paragraph (b) and (g)(2) of this section, absent ac-
tual knowledge or reason to know otherwise, Uni-
versity U may rely on the documentation furnished
by P and pay $5000 to P without withholding U.S. tax
based on the treaty exemption.
(h) Effective dates-(1) General rule.
This section applies to payments made af-
ter December 31, 2000, except for para-
graph (g) of this section which applies to
payments made after December 31, 2001.
* * * * *
## Section 1.1441-6T [Removed]
Par. 6. Section 1.1441-6T is removed.
PART 301-PROCEDURE AND
ADMINISTRATION
Par. 7. The authority for part 301 con-
tinues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 8. In § 301.6109-1, paragraph (g)(3)
is revised to read as follows:
§ 301.6109-1 Identifying numbers.
* * * * *
(g) * * *
(3) Waiver of prohibition to disclose tax-
payer information when acceptance agent
acts. As part of its request for an IRS in-
dividual taxpayer identification number or
submission of proof of foreign status with
respect to any taxpayer identifying num-
ber, where the foreign person acts through
an acceptance agent, the foreign person will
agree to waive the limitations in section
6103 regarding the disclosure of certain tax-
payer information. However, the waiver will
apply only for purposes of permitting the
Internal Revenue Service and the accep-
tance agent to communicate with each other
regarding matters related to the assign-
<!-- PageFooter="2002-50 I.R.B." -->
<!-- PageFooter="December 16, 2002" -->
<!-- PageBreak -->
ment of a taxpayer identifying number, in-
cluding disclosure of any taxpayer
identifying number previously issued to the
foreign person, and change of foreign sta-
tus. This paragraph (g)(3) applies to pay-
ments made after December 31, 2001.
### § 301.6109-1T [Removed]
Par. 9. Section 301.6109-1T is removed.
Robert E. Wenzel,
Deputy Commissioner of
Internal Revenue.
Approved November 13, 2002.
Pamela F. Olson,
Assistant Secretary of the Treasury.
(Filed by the Office of the Federal Register on November 21,
2002, 8:45 a.m., and published in the issue of the Federal Reg-
ister for November 22, 2002, 67 F.R. 70310)
## Section 6621 .- Determina- tion of Interest Rate
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,
2003, will be 5 percent for overpayments
(4 percent in the case of a corporation), 5
percent for underpayments, and 7 percent
for large corporate underpayments. The rate
of interest paid on the portion of a corpo-
rate overpayment exceeding $10,000 will
be 2.5 percent.
### Rev. Rul. 2002-70
Section 6621 of the Internal Revenue
Code establishes the rates for interest on tax
overpayments and tax underpayments. Un-
der § 6621(a)(1), the overpayment rate be-
ginning January 1, 2003, is the sum of the
federal short-term rate plus 3 percentage
points (2 percentage points in the case of
a corporation), except the rate for the por-
tion of a corporate overpayment of tax ex-
ceeding $10,000 for a taxable period is the
sum of the federal short-term rate plus 0.5
of a percentage point for interest compu-
tations made after December 31, 1994. Un-
der § 6621(a)(2), the underpayment rate is
the sum of the federal 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 un-
derpayment rate under § 6621(a)(2) is de-
termined by substituting "5 percentage
points" for "3 percentage points." See
§ 6621(c) and § 301.6621-3 of the Regu-
lations on Procedure and Administration for
the definition of a large corporate under-
payment and for the rules for determin-
ing the applicable date. Section 6621(c) and
§ 301.6621-3 are generally effective for pe-
riods after December 31, 1990.
Section 6621(b)(1) provides that the Sec-
retary 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 dur-
ing the first calendar quarter beginning af-
ter such month.
Section 6621(b)(2)(B) provides that in
determining the addition to tax under § 6654
for failure to pay estimated tax for any tax-
able year, the federal short-term rate that ap-
plies 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 fed-
eral 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 per-
cent, the rate is increased to the next high-
est full percent).
Notice 88-59, 1988-1 C.B. 546, an-
nounced that, in determining the quarterly
interest rates to be used for overpayments
and underpayments of tax under § 6621, the
Internal Revenue Service will use the fed-
eral short-term rate based on daily com-
pounding 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 com-
pounding determined during the month of
October 2002 is 2 percent. Accordingly, an
overpayment rate of 5 percent (4 percent
in the case of a corporation) and an under-
payment rate of 5 percent are established
for the calendar quarter beginning Janu-
ary 1, 2003. The overpayment rate for the
portion of a corporate overpayment ex-
ceeding $10,000 for the calendar quarter be-
ginning January 1, 2003, is 2.5 percent. The
underpayment rate for large corporate un-
derpayments for the calendar quarter be-
ginning January 1, 2003, is 7 percent. These
rates apply to amounts bearing interest dur-
ing that calendar quarter.
The 5 percent rate also applies to esti-
mated tax underpayments for the first cal-
endar quarter in 2003 and for the first 15
days in April 2003.
Interest factors for daily compound in-
terest for annual rates of 2.5 percent, 4 per-
cent, 5 percent, and 7 percent are published
in Tables 10, 13, 15, and 19 of Rev. Proc.
95-17, 1995-1 C.B. 556, 564, 567, 569, and
573.
Annual interest rates to be compounded
daily pursuant to § 6622 that apply for prior
periods are set forth in the tables accom-
panying this revenue ruling.
### DRAFTING INFORMATION
The principal author of this revenue rul-
ing is Raymond Bailey of the Office of As-
sociate Chief Counsel (Procedure &
Administration), Administrative Provi-
sions & Judicial Practice Division. For fur-
ther information regarding this revenue
ruling, contact Mr. Bailey at (202) 622-
6226 (not a toll-free call).
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# TABLE OF INTEREST RATES PERIODS BEFORE JUL. 1, 1975 - PERIODS ENDING DEC. 31, 1986 OVERPAYMENTS AND UNDERPAYMENTS
PERIOD
RATE
In 1995-1 C.B. DAILY RATE TABLE
Before Jul. 1, 1975
6%
Table 2, pg. 557
Jul. 1, 1975-Jan. 31, 1976
9%
Table 4, pg. 559
Feb. 1, 1976-Jan. 31, 1978
7%
Table 3, pg. 558
Feb. 1, 1978-Jan. 31, 1980
6%
Table 2, pg. 557
Feb. 1, 1980-Jan. 31, 1982
12%
Table 5, pg. 560
Feb. 1, 1982-Dec. 31, 1982
20%
Table 6, pg. 560
Jan. 1, 1983-Jun. 30, 1983
16%
Table 37, pg. 591
Jul. 1, 1983-Dec. 31, 1983
11%
Table 27, pg. 581
Jan. 1, 1984-Jun. 30, 1984
11%
Table 75, pg. 629
Jul. 1, 1984-Dec. 31, 1984
11%
Table 75, pg. 629
Jan. 1, 1985-Jun. 30, 1985
13%
Table 31, pg. 585
Jul. 1, 1985-Dec. 31, 1985
11%
Table 27, pg. 581
Jan. 1, 1986-Jun. 30, 1986
10%
Table 25, pg. 579
Jul. 1, 1986-Dec. 31, 1986
9%
Table 23, pg. 577
TABLE OF INTEREST RATES FROM JAN. 1, 1987 - Dec. 31, 1998
OVERPAYMENTS
UNDERPAYMENTS
1995-1 C.B.
1995-1 C.B.
RATE
TABLE
PG
RATE
TABLE
PG
Jan. 1, 1987-Mar. 31, 1987 8%
21
575
9%
23
577
Apr. 1, 1987-Jun. 30, 1987
8%
21
575
9%
23
577
Jul. 1, 1987-Sep. 30, 1987
8%
21
575
9%
23
577
Oct. 1, 1987-Dec. 31, 1987
9%
23
577
10%
25
579
Jan. 1, 1988-Mar. 31, 1988
10%
73
627
11%
75
629
Apr. 1, 1988-Jun. 30, 1988
9%
71
625
10%
73
627
Jul. 1, 1988-Sep. 30, 1988
9%
71
625
10%
73
627
Oct. 1, 1988-Dec. 31, 1988
10%
73
627
11%
75
629
Jan. 1, 1989-Mar. 31, 1989
10%
25
579
11%
27
581
Apr. 1, 1989-Jun. 30, 1989
11%
27
581
12%
29
583
Jul. 1, 1989-Sep. 30, 1989
11%
27
581
12%
29
583
Oct. 1, 1989-Dec. 31, 1989
10%
25
579
11%
27
581
Jan. 1, 1990-Mar. 31, 1990
10%
25
579
11%
27
581
Apr. 1, 1990-Jun. 30, 1990
10%
25
579
11%
27
581
Jul. 1, 1990-Sep. 30, 1990
10%
25
579
11%
27
581
Oct. 1, 1990-Dec. 31, 1990
10%
25
579
11%
27
581
Jan. 1, 1991-Mar. 31, 1991
10%
25
579
11%
27
581
Apr. 1, 1991-Jun. 30, 1991
9%
23
577
10%
25
579
Jul. 1, 1991-Sep. 30, 1991
9%
23
577
10%
25
579
Oct. 1, 1991-Dec. 31, 1991
9%
23
577
10%
25
579
Jan. 1, 1992-Mar. 31, 1992
8%
69
623
9%
71
625
Apr. 1, 1992-Jun. 30, 1992
7%
67
621
8%
69
623
Jul. 1, 1992-Sep. 30, 1992
7%
67
621
8%
69
623
Oct. 1, 1992-Dec. 31, 1992
6%
65
619
7%
67
621
Jan. 1, 1993-Mar. 31, 1993
6%
17
571
7%
19
573
Apr. 1, 1993-Jun. 30, 1993
6%
17
571
7%
19
573
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TABLE OF INTEREST RATES FROM JAN. 1, 1987 - Dec. 31, 1998-Continued
OVERPAYMENTS
UNDERPAYMENTS
1995-1 C.B.
1995-1 C.B.
RATE
TABLE
PG
RATE
TABLE
PG
Jul. 1, 1993-Sep. 30, 1993
6%
17
571
7%
19
573
Oct. 1, 1993-Dec. 31, 1993
6%
17
571
7%
19
573
Jan. 1, 1994-Mar. 31, 1994
6%
17
571
7%
19
573
Apr. 1, 1994-Jun. 30, 1994
6%
17
571
7%
19
573
Jul. 1, 1994-Sep. 30, 1994
7%
19
573
8%
21
575
Oct. 1, 1994-Dec. 31, 1994
8%
21
575
9%
23
577
Jan. 1, 1995-Mar. 31, 1995
8%
21
575
9%
23
577
Apr. 1, 1995-Jun. 30, 1995
9%
23
577
10%
25
579
Jul. 1, 1995-Sep. 30, 1995
8%
21
575
9%
23
577
Oct. 1, 1995-Dec. 31, 1995
8%
21
575
9%
23
577
Jan. 1, 1996-Mar. 31, 1996
8%
69
623
9%
71
625
Apr. 1, 1996-Jun. 30, 1996
7%
67
621
8%
69
623
Jul. 1, 1996-Sep. 30, 1996
8%
69
623
9%
71
625
Oct. 1, 1996-Dec. 31, 1996
8%
69
623
9%
71
625
Jan. 1, 1997-Mar. 31, 1997
8%
21
575
9%
23
577
Apr. 1, 1997-Jun. 30, 1997
8%
21
575
9%
23
577
Jul. 1, 1997-Sep. 30, 1997
8%
21
575
9%
23
577
Oct. 1, 1997-Dec. 31, 1997
8%
21
575
9%
23
577
Jan. 1, 1998-Mar. 31, 1998
8%
21
575
9%
23
577
Apr. 1, 1998-Jun. 30, 1998
7%
19
573
8%
21
575
Jul. 1, 1998-Sep. 30, 1998
7%
19
573
8%
21
575
Oct. 1, 1998-Dec. 31, 1998
7%
19
573
8%
21
575
TABLE OF INTEREST RATES FROM JANUARY 1, 1999 - PRESENT NONCORPORATE OVERPAYMENTS AND UNDERPAYMENTS
1995-1 C.B.
RATE
TABLE
PAGE
Jan. 1, 1999-Mar. 31, 1999
7%
19
573
Apr. 1, 1999-Jun. 30, 1999
8%
21
575
Jul. 1, 1999-Sep. 30, 1999
8%
21
575
Oct. 1, 1999-Dec. 31, 1999
8%
21
575
Jan. 1, 2000-Mar. 31, 2000
8%
69
623
Apr. 1, 2000-Jun. 30, 2000
9%
71
625
Jul. 1, 2000-Sep. 30, 2000
9%
71
625
Oct. 1, 2000-Dec. 31, 2000
9%
71
625
Jan. 1, 2001-Mar. 31, 2001
9%
23
577
Apr. 1, 2001-Jun. 30, 2001
8%
21
575
Jul. 1, 2001-Sep. 30, 2001
7%
19
573
Oct. 1, 2001-Dec. 31, 2001
7%
19
573
Jan. 1, 2002-Mar. 31, 2002
6%
17
571
Apr. 1, 2002-Jun. 30, 2002
6%
17
571
Jul. 1, 2002-Sep. 30, 2002
6%
17
571
Oct. 1, 2002-Dec. 31, 2002
6%
17
571
Jan 1, 2003-Mar. 31, 2003
5%
15
569
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<!-- PageFooter="2002-50 I.R.B." -->
<!-- PageBreak -->
TABLE OF INTEREST RATES FROM JANUARY 1, 1999 - PRESENT CORPORATE OVERPAYMENTS AND UNDERPAYMENTS
OVERPAYMENTS
UNDERPAYMENTS
1995-1 C.B.
1995-1 C.B.
RATE
TABLE
PG
RATE
TABLE
PG
Jan. 1, 1999-Mar. 31, 1999
6%
17
571
7%
19
573
Apr. 1, 1999-Jun. 30, 1999
7%
19
573
8%
21
575
Jul. 1, 1999-Sep. 30, 1999
7%
19
573
8%
21
575
Oct. 1, 1999-Dec. 31, 1999
7%
19
573
8%
21
575
Jan. 1, 2000-Mar. 31, 2000
7%
67
621
8%
69
623
Apr. 1, 2000-Jun. 30, 2000
8%
69
623
9%
71
625
Jul. 1, 2000-Sep. 30, 2000
8%
69
623
9%
71
625
Oct. 1, 2000-Dec. 31, 2000
8%
69
623
9%
71
625
Jan. 1, 2001-Mar. 31, 2001
8%
21
575
9%
23
577
Apr. 1, 2001-Jun. 30, 2001
7%
19
573
8%
21
575
Jul. 1, 2001-Sep. 30, 2001
6%
17
571
7%
19
573
Oct. 1, 2001-Dec. 31, 2001
6%
17
571
7%
19
573
Jan. 1, 2002-Mar. 31, 2002
5%
15
569
6%
17
571
Apr. 1, 2002-Jun. 30, 2002
5%
15
569
6%
17
571
Jul. 1, 2002-Sep. 30, 2002
5%
15
569
6%
17
571
Oct. 1, 2002-Dec. 31, 2002
5%
15
569
6%
17
571
Jan. 1, 2003-Mar. 31, 2003
4%
13
567
5%
15
569
TABLE OF INTEREST RATES FOR LARGE CORPORATE UNDERPAYMENTS FROM JANUARY 1, 1991 - PRESENT
RATE
1995-1 C.B. TABLE
PG
Jan. 1, 1991-Mar. 31, 1991
13%
31
585
Apr. 1, 1991-Jun. 30, 1991
12%
29
583
Jul. 1, 1991-Sep. 30, 1991
12%
29
583
Oct. 1, 1991-Dec. 31, 1991
12%
29
583
Jan. 1, 1992-Mar. 31, 1992
11%
75
629
Apr. 1, 1992-Jun. 30, 1992
10%
73
627
Jul. 1, 1992-Sep. 30, 1992
10%
73
627
Oct. 1, 1992-Dec. 31, 1992
9%
71
625
Jan. 1, 1993-Mar. 31, 1993
9%
23
577
Apr. 1, 1993-Jun. 30, 1993
9%
23
577
Jul. 1, 1993-Sep. 30, 1993
9%
23
577
Oct. 1, 1993-Dec. 31, 1993
9%
23
577
Jan. 1, 1994-Mar. 31, 1994
9%
23
577
Apr. 1, 1994-Jun. 30, 1994
9%
23
577
Jul. 1, 1994-Sep. 30, 1994
10%
25
579
Oct. 1, 1994-Dec. 31, 1994
11%
27
581
Jan. 1, 1995-Mar. 31, 1995
11%
27
581
Apr. 1, 1995-Jun. 30, 1995
12%
29
583
Jul. 1, 1995-Sep. 30, 1995
11%
27
581
Oct. 1, 1995-Dec. 31, 1995
11%
27
581
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# TABLE OF INTEREST RATES FOR LARGE CORPORATE UNDERPAYMENTS FROM JANUARY 1, 1991 - PRESENT-Continued
TABLE OF INTEREST RATES FOR CORPORATE OVERPAYMENTS EXCEEDING $10,000 FROM JANUARY 1, 1995 - PRESENT
1995-1 C.B.
RATE
TABLE
PG
Jan. 1, 1996-Mar. 31, 1996
11%
75
629
Apr. 1, 1996-Jun. 30, 1996
10%
73
627
Jul. 1, 1996-Sep. 30, 1996
11%
75
629
Oct. 1, 1996-Dec. 31, 1996
11%
75
629
Jan 1, 1997-Mar. 31, 1997
11%
27
581
Apr. 1, 1997-Jun. 30, 1997
11%
27
581
Jul. 1, 1997-Sep. 30, 1997
11%
27
581
Oct. 1, 1997-Dec. 31, 1997
11%
27
581
Jan. 1, 1998-Mar. 31, 1998
11%
27
581
Apr. 1, 1998-Jun. 30, 1998
10%
25
579
Jul. 1, 1998-Sep. 30, 1998
10%
25
579
Oct. 1, 1998-Dec. 31, 1998
10%
25
579
Jan. 1, 1999-Mar. 31, 1999
9%
23
577
Apr. 1, 1999-Jun. 30, 1999
10%
25
579
Jul. 1, 1999-Sep. 30, 1999
10%
25
579
Oct. 1, 1999-Dec. 31, 1999
10%
25
579
Jan. 1, 2000-Mar. 31, 2000
10%
73
627
Apr. 1, 2000-Jun. 30, 2000
11%
75
629
Jul. 1, 2000-Sep. 30, 2000
11%
75
629
Oct. 1, 2000-Dec. 31, 2000
11%
75
629
Jan. 1, 2001-Mar. 31, 2001
11%
27
581
Apr. 1, 2001-Jun. 30, 2001
10%
25
579
Jul. 1, 2001-Sep. 30, 2001
9%
23
577
Oct. 1, 2001-Dec. 31, 2001
9%
23
577
Jan. 1, 2002-Mar. 31, 2002
8%
21
575
Apr. 1, 2002-Jun. 30, 2002
8%
21
575
Jul. 1, 2002-Sep. 30, 2002
8%
21
575
Oct. 1, 2002-Dec. 30, 2002
8%
21
575
Jan. 1, 2003-Mar. 31, 2003
7%
19
573
1995-1 C.B.
RATE
TABLE
PG
Jan. 1, 1995-Mar. 31, 1995
6.5%
18
572
Apr. 1, 1995-Jun. 30, 1995
7.5%
20
574
Jul. 1, 1995-Sep. 30, 1995
6.5%
18
572
Oct. 1, 1995-Dec. 31, 1995
6.5%
18
572
Jan. 1, 1996-Mar. 31, 1996
6.5%
66
620
Apr. 1, 1996-Jun. 30, 1996
5.5%
64
618
Jul. 1, 1996-Sep. 30, 1996
6.5%
66
620
Oct. 1, 1996-Dec. 31, 1996
6.5%
66
620
Jan. 1, 1997-Mar. 31, 1997
6.5%
18
572
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## TABLE OF INTEREST RATES FOR CORPORATE OVERPAYMENTS EXCEEDING $10,000 FROM JANUARY 1, 1995 - PRESENT-Continued
1995-1 C.B.
RATE
TABLE
PG
Apr. 1, 1997-Jun. 30, 1997
6.5%
18
572
Jul. 1, 1997-Sep. 30, 1997
6.5%
18
572
Oct. 1, 1997-Dec. 31, 1997
6.5%
18
572
Jan. 1, 1998-Mar. 31, 1998
6.5%
18
572
Apr. 1, 1998-Jun. 30, 1998
5.5%
16
570
Jul. 1, 1998-Sep. 30, 1998
5.5%
16
570
Oct. 1, 1998-Dec. 31, 1998
5.5%
16
570
Jan. 1, 1999-Mar. 31, 1999
4.5%
14
568
Apr. 1, 1999-Jun. 30, 1999
5.5%
16
570
Jul. 1, 1999-Sep. 30, 1999
5.5%
16
570
Oct. 1, 1999-Dec. 31, 1999
5.5%
16
570
Jan. 1, 2000-Mar. 31, 2000
5.5%
64
618
Apr. 1, 2000-Jun. 30, 2000
6.5%
66
620
Jul. 1, 2000-Sep. 30, 2000
6.5%
66
620
Oct. 1, 2000-Dec. 31, 2000
6.5%
66
620
Jan. 1, 2001-Mar. 31, 2001
6.5%
18
572
Apr. 1, 2001-Jun. 30, 2001
5.5%
16
570
Jul. 1, 2001-Sep. 30, 2001
4.5%
14
568
Oct. 1, 2001-Dec. 31, 2001
4.5%
14
568
Jan. 1, 2002-Mar. 31, 2002
3.5%
12
566
Apr. 1, 2002-Jun. 30, 2002
3.5%
12
566
Jul. 1, 2002-Sep. 30, 2002
3.5%
12
566
Oct. 1, 2002-Dec. 31, 2002
3.5%
12
566
Jan. 1, 2003-Mar. 31, 2003
2.5%
10
564
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# Part III. Administrative, Procedural, and Miscellaneous
## Advance Payments
### Notice 2002-79
This notice provides a proposed rev-
enue procedure that, if finalized, will modify
and supersede Rev. Proc. 71-21, 1971-2
C.B. 549. Pursuant to the discretion granted
the Commissioner of Internal Revenue un-
der § 446 of the Internal Revenue Code,
Rev. Proc. 71-21 allows, and this pro-
posed revenue procedure (if finalized) will
allow, taxpayers using an accrual method
of accounting to defer the inclusion in gross
income for federal income tax purposes of
advance payments in certain limited situ-
ations. This proposed revenue procedure is
intended to reduce the administrative and
tax compliance burdens on taxpayers and
to minimize disputes between the Inter-
nal Revenue Service and taxpayers regard-
ing advance payments.
In conjunction with this proposed rev-
enue procedure, the Treasury Department
and the Service plan to propose regula-
tions that will modify § 1.61-8(b) of the In-
come Tax Regulations to conform with the
proposed revenue procedure. The current
regulation states that "advance rentals" are
includible in gross income for the year of
receipt (except as provided by § 467 and the
regulations thereunder); the proposed regu-
lation will allow the Commissioner to pro-
vide rules allowing for inclusion in gross
income for a taxable year other than the tax-
able year of receipt.
The Service requests comments on the
proposed revenue procedure provided in this
notice. In particular, the Service requests
comments regarding:
· whether the proposed revenue proce-
dure should take into account the cost
of goods sold in deferring advance
payments from the sale of goods;
· a taxpayer's ability to allocate ad-
vance payments between the defer-
ral provisions in § 1.451-5 and this
revenue procedure;
· the acceleration of advance payments
pursuant to non-taxable transfers, such
as transfers under § 351 or § 721, and
the treatment of short tax years re-
sulting from § 381(a) transactions; and
· the use of statistical methodologies for
tracing advance payments if the tax-
payer cannot determine the extent to
which particular advance payments re-
ceived in a given taxable year are ac-
tually included in gross receipts for
financial reporting purposes in that
year.
All comments should be submitted by
March 24, 2003, 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 ad-
dress).
Rev. Proc. 2003-XX
SECTION 1. PURPOSE
This revenue procedure modifies and su-
persedes Rev. Proc. 71-21, 1971-2 C.B.
549, under which the Commissioner exer-
cised his discretion under § 446 of the In-
ternal Revenue Code to allow taxpayers
using an accrual method of accounting to
defer the inclusion in gross income for fed-
eral income tax purposes of certain ad-
vance payments for services in limited
situations. This revenue procedure expands
Rev. Proc. 71-21 to allow qualifying tax-
payers to defer to the next succeeding tax-
able year the inclusion in gross income for
federal income tax purposes of certain ad-
vance payments (as specified in section 4
of this revenue procedure) to the extent the
advance payments are deferred for finan-
cial reporting purposes. This revenue pro-
cedure allows this deferral even if the
advance payments are not included in gross
receipts for financial reporting purposes by,
or the income is not earned through per-
formance by, the end of the next succeed-
ing taxable year. However, in no event will
this revenue procedure allow deferral to a
taxable year later than the next succeed-
ing taxable year. This revenue procedure
neither restricts a taxpayer's ability to use
the methods provided in § 1.451-5 of the
Income Tax Regulations regarding advance
payments for goods nor limits the period
of deferral available under § 1.451-5.
SECTION 2. BACKGROUND AND
CHANGES
.01 In general, § 451 provides that the
amount of any item of gross income is in-
cluded in gross income for the taxable year
in which received by the taxpayer, un-
less, under the method of accounting used
in computing taxable income, the amount
is to be properly accounted for as of a dif-
ferent period. Section 1.451-1(a) provides
that, under an accrual method of account-
ing, income is includible in gross income
when all the events have occurred that fix
the right to receive the income and the
amount can be determined with reason-
able accuracy. All the events that fix the
right to receive income generally occur
when (1) the required performance takes
place, (2) payment is due to the taxpayer,
or (3) payment is received by the taxpayer,
whichever happens earliest. See Rev. Rul.
84-31, 1984-1 C.B. 127.
.02 Section 1.451-5 generally allows ac-
crual method taxpayers to defer the inclu-
sion in gross income for federal income tax
purposes of advance payments for goods
until the taxable year in which they are
properly accruable under the taxpayer's
method of accounting for tax purposes if
that method results in the payments being
included in gross income no later than when
they are includible in gross receipts un-
der the taxpayer's method of accounting for
financial reporting purposes.
.03 Rev. Proc. 71-21 was published to
implement an administrative decision of the
Commissioner in the exercise of his dis-
cretion under § 446 to allow accrual method
taxpayers in certain specified and limited
circumstances to defer the inclusion in gross
income for federal income tax purposes of
payments received (or amounts due and
payable) in one taxable year for services to
be performed by the end of the next suc-
ceeding taxable year. Rev. Proc. 71-21 was
designed to reconcile the tax and finan-
cial accounting treatment of payments re-
ceived for services to be performed by the
end of the next succeeding taxable year
without permitting extended deferral of the
inclusion of those payments in gross in-
come for federal income tax purposes.
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.04 Considerable controversy exists about
the scope of Rev. Proc. 71-21, especially
with regard to Forms 3115, Application for
Change in Accounting Method, filed by tax-
payers requesting to change to the method
provided in Rev. Proc. 71-21. In particu-
lar, taxpayers and the Service frequently dis-
agree about whether advance payments are
for services, some type of non-service, or
some mixture of services and non-services.
Advance payments for non-services (and of-
ten, for mixed services and non-services)
do not qualify for deferral under Rev. Proc.
71-21. Thus, the difficulty in defining "ser-
vices" under Rev. Proc. 71-21 results in
controversy over whether the Service should
grant a taxpayer's request to change to the
method provided in Rev. Proc. 71-21. In
addition to the issue of defining "services"
for purposes of Rev. Proc. 71-21, ques-
tions also arise about whether advance pay-
ments received under a series of agreements,
or under a renewable agreement, are within
the scope of Rev. Proc. 71-21. In the in-
terest of reducing controversy about these
issues, the Service has determined that it is
appropriate to expand the scope of Rev.
Proc. 71-21 to include advance payments
for certain non-services and mixed services/
non-services. Additionally, the Service has
determined that it is appropriate to ex-
pand the scope to include advance pay-
ments received in connection with an
agreement or series of agreements with a
term or terms extending beyond the end of
the next succeeding taxable year. The Ser-
vice has determined, however, that it is ap-
propriate to retain the limited one-year
deferral of Rev. Proc. 71-21 for taxpay-
ers within the scope of this revenue pro-
cedure.
### SECTION 3. SCOPE
This revenue procedure applies to tax-
payers using an accrual method of account-
ing that receive advance payments as
defined in section 4 of this revenue pro-
cedure.
### SECTION 4. DEFINITIONS
The following definitions apply solely
for purposes of this revenue procedure:
.01 Advance payment. Except as pro-
vided in section 4.02 of this revenue pro-
cedure, a payment is an "advance payment"
if:
(1) the payment is received by the tax-
payer in one taxable year;
(2) including the payment in gross in-
come for the taxable year of receipt is a per-
missible method of accounting for federal
income tax purposes (without regard to this
revenue procedure);
(3) the payment is included by the tax-
payer (in whole or in part) in gross re-
ceipts for financial reporting purposes for
a subsequent taxable year, whether or not
the inclusion is contingent upon a future act
by the taxpayer or any other party; and
(4) the payment is solely for:
(a) services (other than for service war-
ranty contracts for which the taxpayer uses
the accounting method provided in Rev.
Proc. 97-38, 1997-2 C.B. 479);
(b) the sale of goods (other than for
sales of goods for which the taxpayer uses
a deferral method provided in § 1.451-
5(b)(1)(ii));
(c) the use of intellectual property as de-
fined in section 4.03 of this revenue pro-
cedure;
(d) the occupancy of space or the use
of property if the occupancy or use is an-
cillary to the provision of services (for ex-
ample, advance payments for the use of
rooms or other quarters in a hotel, booth
space at a trade show, campsite space at a
mobile home park, and recreational or ban-
quet facilities, or other uses of property, so
long as the use is ancillary to the provi-
sion of services to the property user);
(e) guaranty or warranty contracts an-
cillary to the items described in subsec-
tions (a), (b), (c), and (d) of this section;
(f) subscriptions (other than for sub-
scriptions for which an election under § 455
is in effect), whether or not provided in a
tangible or intangible format;
(g) membership in an organization (other
than for memberships for which an elec-
tion under § 456 is in effect); or
(h) any combination of subsections (a)
through (g) of this section.
.02 Exclusions from advance payment.
The term "advance payment" does not
include:
(1) rent (except for amounts described
in section 4.01(4)(c) and (d);
(2) insurance premiums; and
(3) payments with respect to financial
instruments (for example, debt instruments,
deposits, letters of credit, notional princi-
pal contracts, options, forwards, futures, for-
eign currency contracts, credit card
agreements, financial derivatives, etc.), in-
cluding purported prepayments of inter-
est.
.03 Intellectual Property. The term "in-
tellectual property" includes copyrights, pat-
ents, trademarks, service marks, trade
names, and similar intangible property rights
(such as franchise rights and arena nam-
ing rights).
.04 Received. Income is "received" by
the taxpayer if it is actually or construc-
tively received, or if it is due and pay-
able to the taxpayer.
.05 Next Succeeding Taxable Year. The
term "next succeeding taxable year" means
the taxable year immediately following the
taxable year in which the advance pay-
ment is received by the taxpayer.
## SECTION 5. PERMISSIBLE METHODS OF ACCOUNTING FOR ADVANCE PAYMENTS
.01 Full Inclusion Method. As provided
in section 4.01(2), a taxpayer within the
scope of this revenue procedure that in-
cludes the full amount of advance pay-
ments in gross income for federal income
tax purposes in the taxable year received
is using a proper method of accounting un-
der § 1.451-1, regardless of whether the tax-
payer includes the full amount of advance
payments in gross receipts for that tax-
able year for financial reporting purposes.
.02 Deferral Method.
(1) In general. Except as otherwise pro-
vided in this revenue procedure, a tax-
payer within the scope of this revenue
procedure that uses the Deferral Method de-
scribed in this section is using a proper
method of accounting under § 1.451-1. Un-
der the Deferral Method, for federal in-
come tax purposes the taxpayer must
include the advance payment in gross in-
come for the taxable year of receipt to the
extent the advance payment is included in
gross receipts for financial reporting pur-
poses for that year. The remaining amount
of the advance payment must be included
in gross income for the next succeeding tax-
able year.
(2) Tracing advance payments. To be
eligible to use the Deferral Method, the tax-
payer must have in place a methodology for
determining that advance payments are in-
cluded in gross income by the end of the
next succeeding taxable year. In the case of
goods or services that are not traced, a tax-
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<!-- PageBreak -->
payer may generally use the methodol-
ogy used for financial reporting purposes
provided that
(a) the methodology used for finan-
cial reporting purposes provides a basis for
determining how much of the current year's
advance payments are included in gross re-
ceipts for financial reporting purposes in the
current year; and
(b) the portion of an advance payment
not included in gross income in the tax-
able year of receipt is included in gross in-
come in the next succeeding taxable year.
(3) Acceleration of advance payments.
Notwithstanding section 5.02(1) of this rev-
enue procedure, the taxpayer must include
in gross income for the taxable year of
receipt:
(a) all advance payments if, in that year,
the taxpayer either dies or ceases to exist
in a transaction other than one to which
§ 381(a) applies;
(b) advance payments with respect to
any one or more of the items listed in sec-
tion 4.01 of this revenue procedure if, and
to the extent that, the taxpayer's obliga-
tion to provide the item or items other-
wise ends in that year.
.03 Examples. In each example below,
the taxpayer uses an accrual method of ac-
counting and files its returns on a calen-
dar year basis.
(1) On November 1, 2003, A, in the business of
giving dancing lessons, receives an advance pay-
ment for a 1-year contract commencing on that date
and providing for up to 48 individual, 1-hour les-
sons. A provides eight lessons in 2003 and another 35
lessons in 2004 before the contract expires. For fi-
nancial reporting purposes, A includes 1/6 of the pay-
ment in gross receipts for 2003, and 5/6 of the payment
in gross receipts for 2004. A uses the Deferral Method.
For federal income tax purposes, A must include 1/6
of the payment in gross income for 2003, and the re-
maining 5/6 of the payment in gross income for 2004.
(2) Assume the same facts as in Example 1 ex-
cept that the advance payment is received for a 2-year
contract under which up to 96 lessons are provided.
A provides eight lessons in 2003, 48 lessons in 2004,
and 40 lessons in 2005. For financial reporting pur-
poses, A includes 1/12 of the payment in gross re-
ceipts for 2003, 6/12 of the payment in gross receipts
for 2004, and 5/12 of the payment in gross receipts
for 2005. For federal income tax purposes, A must in-
clude 1/12 of the payment in gross income for 2003,
and the remaining 11/12 of the payment in gross in-
come for 2004.
(3) On June 1, 2003, B, a landscape architecture
firm, receives an advance payment for goods and ser-
vices that, under the terms of the agreement, must be
completed by December 2004. On December 31, 2003,
B estimates that 3/4 of the work under the agree-
ment has been completed. For financial reporting pur-
poses, B includes 3/4 of the payment in gross receipts
for 2003 and 1/4 of the payment in gross receipts for
2004. B uses the Deferral Method. For federal in-
come tax purposes, B must include 3/4 of the pay-
ment in gross income for 2003, and the remaining 1/4
of the payment in gross income for 2004, regardless
of whether B is for any reason unable to complete the
job in 2004.
(4) On July 1, 2003, C, in the business of sell-
ing and repairing television sets, receives an ad-
vance payment for a 2-year contract under which C
agrees to repair or replace certain parts in the cus-
tomer's television set if those parts fail to function
properly. For financial reporting purposes, C in-
cludes 1/4 of the payment in gross receipts for 2003,
1/2 of the payment in gross receipts for 2004, and 1/4
of the payment in gross receipts for 2005. C uses the
Deferral Method. For federal income tax purposes, C
must include 1/4 of the payment in gross income for
2003 and the remaining 3/4 of the payment in gross
income for 2004.
(5) D, a video arcade operator, receives pay-
ments in 2003 for game tokens that are used by cus-
tomers to play the video games offered by D. The
tokens cannot be redeemed for cash. The tokens are
imprinted with the name of the video arcade, but they
are not individually marked for identification. For fi-
nancial reporting purposes, D completed a study that
determined that for payments received in the cur-
rent year, x percent of tokens are expected to be used
in the current year, y percent of tokens are expected
to be used in the next year, and z percent of tokens
are never expected to be used. Based on the study, D
includes in gross receipts for 2003 the percentage of
the payments for tokens that are used in that year (x
percent) as well as the z percent for tokens that are
never expected to be used; D includes the remain-
ing y percent in gross receipts for 2004. D uses the
Deferral Method. Because D does not trace which to-
kens are used in any given taxable year, D may in-
clude these payments in gross income in accordance
with its financial reporting method, provided that any
portion of the payment not included in income in the
year of receipt is included in gross income for the next
succeeding taxable year. D includes x percent and z
percent in gross income for 2003, and D includes y
percent in gross income for 2004.
(6) E, in the business of photographic process-
ing, receives advance payments for mailers and cer-
tificates that oblige E to process photographic film,
prints, or other photographic materials returned in the
mailer or with the certificate. E tracks each of the mail-
ers and certificates with unique identifying num-
bers. On July 20, 2003, E receives payments for 2
mailers; one of the mailers is submitted for film pro-
cessing and is processed by E on September 1, 2003,
and the other is submitted and processed on Febru-
ary 1, 2005. For financial reporting purposes, E in-
cludes the payment for the September 1, 2003,
processing in gross receipts for 2003 and the pay-
ment for the February 1, 2005, processing in gross re-
ceipts for 2005. E uses the Deferral Method. For
federal income tax purposes, E must include the pay-
ment for the September 1, 2003, processing in gross
income for 2003 and the payment for the February 1,
2005, processing in gross income for 2004.
(7) F, a hair styling salon, receives advance pay-
ments from selling gift certificates that may later be
redeemed at the salon for hair styling services or hair
care products at the face value of the gift certifi-
cate. The gift certificates look like standard credit cards,
and each certificate has a magnetic strip that, in con-
nection with F's computer system, identifies the bal-
ance of the gift credit. The gift certificates may not
be redeemed for cash, and they have no expiration
date. F does not have in place a methodology for de-
termining the extent to which the current year's ad-
vance payments are included in gross receipts for
financial reporting purposes for the current year. F may
not use the Deferral Method, and F must include the
advance payments in gross income for the taxable year
of receipt.
(8) G is in the business of compiling and provid-
ing business information for a particular industry in
an online format accessible over the internet. On Sep-
tember 1, 2003, G receives an advance payment from
a subscriber for 1 year of access to its online data-
base. For financial reporting purposes, G includes 1/3
of the payment in gross receipts for 2003 and the re-
maining 2/3 in gross receipts for 2004. G uses the De-
ferral Method. For federal income tax purposes, G must
include 1/3 of the payment in gross income for 2003
and the remaining 2/3 of the payment in gross in-
come for 2004.
(9) On December 1, 2003, H, in the business of
operating a chain of "shopping club" retail stores, re-
ceives advance payments for membership fees. Upon
payment of the fee, a member receives an identifi-
cation card that allows access for a 1-year period to
H's stores, which offer discounted merchandise and
services. For financial reporting purposes, H in-
cludes 1/12 of the payment in gross receipts for 2003
and 11/12 of the payment in gross receipts for 2004.
H uses the Deferral Method. For federal income tax
purposes, H must include 1/12 of the payment in gross
income for 2003, and the remaining 11/12 of the pay-
ment in gross income for 2004.
(10) I, a professional sports franchise, is a mem-
ber of a sports league that enters into contracts with
television networks for the sale of broadcasting rights
to the games played between the member teams. The
money received under the contracts is divided equally
among the member teams. On April 1, 2003, the league
enters into a 3-year broadcasting contract. I receives
three equal installment payments on October 1 of each
contract year, beginning in 2003. For financial re-
porting purposes, I includes 1/4 of the first install-
ment payment in gross receipts for 2003 and 3/4 in
gross receipts for 2004; I includes 1/4 of the second
installment in gross receipts for 2004 and 3/4 in gross
receipts for 2005; I includes 1/4 of the third install-
ment in gross receipts for 2005 and 3/4 in gross re-
ceipts for 2006. I uses the Deferral Method. Under
section 4 of this revenue procedure, each install-
ment payment constitutes an "advance payment." Thus,
for federal income tax purposes, I must include 1/4
of the first installment payment in gross income for
2003 and 3/4 in gross income for 2004; 1/4 of the sec-
ond installment in gross income for 2004 and 3/4 in
gross income for 2005; and 1/4 of the third install-
ment in gross income for 2005 and 3/4 in gross in-
come for 2006.
(11) J is a cable television provider that enters into
contracts with subscribers to provide cable services
for a monthly fee (paid prior to the service month).
For those subscribers without a "cable ready" tele-
vision set, K provides, for an additional monthly charge
(also paid prior to the service month), a cable con-
verter box with a remote control. Pursuant to the con-
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tract, J will replace or repair the cable converter box
if it proves defective during the contract period. J will
not allow a non-subscriber to rent a converter box. In
December 2003, J receives payments from subscrib-
ers for January 2004 cable service and converter box
use. For financial reporting purposes, J includes these
payments in gross receipts for 2004. J uses the De-
ferral Method. The payments for cable services are in-
cluded in gross income for 2004. Because a
subscriber's use of a converter box is ancillary to the
provision of cable services by J, and because the con-
verter box warranty is ancillary to the use of the con-
verter box, J must include the entire advance payment
in gross income for 2004.
(12) On January 1, 2003, K enters into, and re-
ceives advance payments pursuant to, a 5-year li-
cense agreement for its computer software. Under the
contract, the licensee pays K both the first-year (2003)
license fee and the fifth-year (2007) license fee upon
commencement of the agreement. The fees for the sec-
ond, third, and fourth years are payable on January
1 of each license year. For financial reporting pur-
poses, K includes the fees in gross receipts for the re-
spective license year. K uses the Deferral Method. For
federal income tax purposes, K must include the first-
year license fee in gross income for 2003, the second-
year and the fifth-year license fee in gross income for
2004, the third-year license fee in gross income for
2005, and the fourth-year license fee in gross in-
come for 2006.
(13) On July 1, 2003, L, who is in the business
of selling off-the-shelf computer software and pro-
viding computer support, receives an advance pay-
ment for a 2-year "software maintenance contract"
under which L will provide software updates if it de-
velops an update within the contract period, as well
as online and telephone customer support. For finan-
cial reporting purposes, L includes 1/4 of the pay-
ment in gross receipts for 2003, 1/2 in gross receipts
for 2004, and the remaining 1/4 in gross receipts for
2005, regardless of when L provides updates or cus-
tomer support. L uses the Deferral Method. For fed-
eral income tax purposes, L must include 1/4 of the
payment in gross income for 2003 and 3/4 in gross
income for 2004.
(14) Assume the same facts as Example 13, but
L ceases to exist, on December 1, 2003, in a trans-
action to which § 381(a) does not apply. For federal
income tax purposes, L must include the entire fee in
gross income on December 1, 2003.
## SECTION 6. AUDIT PROTECTION FOR TAXPAYERS CURRENTLY USING THE DEFERRAL METHOD
If a taxpayer uses the Deferral Method
described in section 5.02 of this revenue
procedure for advance payments (as de-
fined in section 4 of this revenue proce-
dure), the taxpayer's method of accounting
for such advance payments under the De-
ferral Method will not be raised as an is-
sue by the Service in a taxable year that
ends before [insert date of publication of
final revenue procedure]. If the taxpayer
uses the Deferral Method described in sec-
tion 5.02 of this revenue procedure, and the
treatment of advance payments (as de-
fined in section 4 of this revenue proce-
dure) under the Deferral Method is an issue
under consideration (within the meaning of
section 3.09 of Rev. Proc. 2002-9) in ex-
amination, in appeals, or before the U.S. Tax
Court in a taxable year that ends before [in-
sert date of publication of final revenue pro-
cedure], that issue will not be further
pursued by the Service.
## SECTION 7. CHANGE IN METHOD OF ACCOUNTING
A change in a taxpayer's treatment of
advance payments to either of the meth-
ods described in section 5 of this revenue
procedure is a change in method of ac-
counting to which the provisions of §§ 446
and 481, and the regulations thereunder, ap-
ply. Therefore, a taxpayer within the scope
of this revenue procedure that wants to use
one of the methods of accounting pro-
vided in section 5 of this revenue proce-
dure, and that does not currently use that
method, must follow the automatic change
in method of accounting provisions in Rev.
Proc. 2002-9, 2002-3 I.R.B. 327 (or its suc-
cessor), as modified by Rev. Proc. 2002-
19, 2002-13 I.R.B. 696, Announcement
2002-17, 2002-8 I.R.B. 561, and Rev. Proc.
2002-54, 2002-35 I.R.B. 432, with the fol-
lowing modifications:
.01 The scope limitations in section 4.02
of Rev. Proc. 2002-9 do not apply to a tax-
payer that wants to change its method for
its first or second taxable year ending on
or after [insert date of publication of fi-
nal revenue procedure] provided the tax-
payer's method of accounting for advance
payments is not an issue under consider-
ation for taxable years under examina-
tion, within the meaning of section 3.09 of
Rev. Proc. 2002-9, at the time the Form
3115 is filed with the national office;
.02 A taxpayer that wants to change its
method for its first taxable year ending on
or after [insert date of publication of fi-
nal revenue procedure], that on or before
[insert date 30 days from date of publica-
tion of final revenue procedure] files its
original federal income tax return for that
year is not required to comply with the fil-
ing requirement in section 6.02(3)(a) of Rev.
Proc. 2002-9, provided the taxpayer com-
plies with the following filing require-
ments. The taxpayer must complete and file
a Form 3115 in duplicate. The original must
be attached to an amended federal income
tax return for the taxpayer's first taxable
year ending on or after [insert date of pub-
lication of final revenue procedure]. This
amended return must be filed no later than
[insert date 180 days from date of publi-
cation of final revenue procedure]. A copy
of the Form 3115 must be filed with the na-
tional office (see section 6.02(6) of Rev.
Proc. 2002-9 for the address) no later than
when the taxpayer's amended return is filed;
and
(3) When filing the Form 3115, taxpay-
ers must complete all applicable parts of the
form and, in lieu of the label required by
section 6.02(4) of Rev. Proc. 2002-9, are
instructed to write "Change to [Full Inclu-
sion Method or Deferral Method] under
Rev. Proc. [insert rev. proc. number]" at the
top of the form.
## SECTION 8. RECORD KEEPING
Section 6001 provides that every per-
son liable for any tax imposed by the Code,
or for the collection thereof, must keep such
records, render such statements, make such
returns, and comply with such rules and
regulations as the Secretary may from time
to time prescribe. The books or records re-
quired by § 6001 must be kept at all times
available for inspection by authorized in-
ternal revenue officers or employees, and
must be retained so long as the contents
thereof may become material in the ad-
ministration of any internal revenue law.
Section 1.6001-1(e). In order to satisfy the
record keeping requirements of § 6001 and
the regulations thereunder, a taxpayer that
uses the Deferral Method must maintain ad-
equate books and records so that the amount
deferred on the federal income tax return
for any year can be verified from those
books and records.
## SECTION 9. EFFECT ON OTHER DOCUMENTS
Rev. Proc. 71-21 is modified and su-
perseded. Rev. Proc. 2002-9 is modified
and amplified to include this automatic
change in the APPENDIX. The Deferral
Method provided in this revenue proce-
dure is available to qualifying taxpayers not-
withstanding revenue rulings, revenue
procedures, notices, or announcements pub-
lished by the Service that may provide dif-
ferent rules for when advance payments
must be included in gross income. See, e.g.,
Rev. Rul. 70-445, 1970-2 C.B. 101; Rev.
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Rul. 68-44, 1968-1 C.B. 191; Rev. Rul.
65-141, 1965-1 C.B. 210; and Rev. Rul.
60-85, 1960-1 C.B. 181.
## SECTION 10. EFFECTIVE DATE
This revenue procedure is effective for
taxable years ending on or after [insert date
of publication of final revenue procedure].
## SECTION 11. DRAFTING INFORMATION
The principal author of this revenue pro-
cedure is Edwin B. Cleverdon of the Of-
fice of Associate Chief Counsel (Income
Tax and Accounting). For further informa-
tion regarding this revenue procedure, con-
tact Mr. Cleverdon at (202) 622-7900 (not
a toll-free call).
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## Part IV. Items of General Interest
Notice of Proposed
Rulemaking and Notice of
Public Hearing
## Outbound Liquidations to Foreign Corporations REG-127380-02
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemak-
ing and notice of public hearing.
SUMMARY: This document contains pro-
posed regulations that provide guidance re-
garding the application of section 367(e)(2)
to certain outbound liquidations. The regu-
lations amend the anti-abuse rule of
§ 1.367(e)-2(d) by narrowing the scope of
the rule to apply only to outbound trans-
fers to a foreign corporation in a com-
plete liquidation of a domestic corporation
in which a principal purpose of the liqui-
dation is the avoidance of U.S. tax. This
document also provides a notice of a pub-
lic hearing on these proposed regulations.
DATES: Written or electronic comments
must be received by February 18, 2003. Re-
quests to speak and outlines of topics to be
discussed at the public hearing scheduled
for March 3, 2003, at 10 a.m. must be re-
ceived by February 11, 2003.
ADDRESSES: Send submissions to:
CC:ITA:RU (REG-127380-02), room 5226,
Internal Revenue Service, P.O. Box 7604,
Ben Franklin Station, Washington, DC
20044. Submissions may be hand deliv-
ered Monday through Friday between the
hours of 8 a.m. and 5 p.m. to: CC:ITA:RU
(REG-127380-02), Courier's Desk, Inter-
nal Revenue Service, 1111 Constitution Av-
enue, NW, Washington, DC 20044.
Alternatively, taxpayers may submit com-
ments electronically directly to the IRS In-
ternet site at www.irs.gov/regs. The public
hearing will be held in room 4718, Inter-
nal Revenue Building, 1111 Constitution
Avenue, NW, Washington, DC.
FOR FURTHER INFORMATION
CONTACT: Concerning the proposed regu-
lations, Aaron A. Farmer (202) 622-3860;
concerning submissions of comments, the
hearing, and/or to be placed on the build-
ing access list to attend the hearing, Lanita
Van Dyke, (202) 622-7180 (not toll-free
numbers).
## SUPPLEMENTARY INFORMATION:
### Background
Generally, a liquidating corporation does
not recognize gain or loss under section
337(a) on a distribution of any property to
an 80-percent distributee (as defined in sec-
tion 337(c)) in a complete liquidation to
which section 332 applies. Section 367(e)(2)
provides that, in the case of any liquida-
tion to which section 332 applies, section
337(a) and (b)(1) shall not apply where the
80-percent distributee is a foreign corpo-
ration except as provided in regulations. The
purpose of section 367(e)(2) generally is to
prevent the removal of appreciated assets
from U.S. taxing jurisdiction without the
imposition of a U.S. corporate level tax. See
H.R. Conf. Rep. No. 99-841, at II-202
(1986).
On August 9, 1999, the IRS and Trea-
sury published final regulations (T.D. 8834,
1999-2 C.B. 251 [64 FR 43072]) under sec-
tion 367(e)(2) regarding distributions of
property in a complete liquidation under
section 332 by a domestic corporation to
a foreign parent corporation (outbound liq-
uidation) and by a foreign corporation to
a foreign parent corporation (foreign-to-
foreign liquidations).
With regard to foreign-to-foreign liqui-
dations, § 1.367(e)-2(c) generally pro-
vides that nonrecognition treatment applies
under section 337(a) and (b)(1) when a for-
eign corporation (foreign liquidating cor-
poration) makes a distribution of property
in complete liquidation under section 332
to a foreign corporation that meets the own-
ership requirements of section 332(b). The
regulations require gain to be recognized in
a foreign-to-foreign liquidation if the for-
eign liquidating corporation makes a dis-
tribution of property which either is used
by the foreign liquidating corporation in the
conduct of a trade or business within the
United States (a U.S. trade or business) at
the time of the distribution or which ceased
to be used in the conduct of a U.S. trade
or business within the ten-year period end-
ing on the date of distribution and would
have been subject to section 864(c)(7) had
it been disposed. The final regulations in-
clude an exception to this gain recogni-
tion rule in certain circumstances where the
property is distributed to a foreign corpo-
ration that uses such property in a U.S. trade
or business for the ten-year period follow-
ing the distribution, provided that certain
requirements are satisfied.
§ 1.367(e)-2(c)(2).
The final regulations included an anti-
abuse rule providing that the Commis-
sioner may require a foreign or domestic
liquidating corporation to recognize gain (or
treat the liquidating corporation as if it had
recognized a loss) on a liquidating distri-
bution if a principal purpose of the liqui-
dation is the avoidance of U.S. tax. The
final regulations further provide that a liq-
uidation may have a principal purpose of
tax avoidance even though the tax avoid-
ance purpose is outweighed by other pur-
poses (taken together or separately).
The preamble to the final regulations
states that the anti-abuse rule would ap-
ply, for example, if a principal purpose of
a liquidation is the distribution of a do-
mestic liquidating corporation's earnings and
profits without a U.S. withholding tax. The
preamble to the final regulations also states
that, in certain circumstances, the IRS is
also concerned about a liquidation of a do-
mestic corporation into a U.S. branch of a
foreign corporation in a manner that fa-
cilitates the avoidance of U.S. tax, includ-
ing the inappropriate use of attributes such
as net operating losses. The preamble does
not address the potential application of the
anti-abuse rule to foreign-to-foreign liqui-
dations.
### Explanation of Provisions
Since the final regulations were issued,
various commentators have expressed con-
cern that the anti-abuse rule is overly broad
because it is not limited by its express terms
to outbound liquidations. Specifically, it has
been brought to the attention of Treasury
and the IRS that uncertainty regarding the
potential application of the anti-abuse rule
is preventing taxpayers from engaging in
legitimate business transactions involving
foreign-to-foreign liquidations. Although the
preamble to the final regulations does not
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address any circumstances in which the anti-
abuse rule would apply to a foreign-to-
foreign liquidation, the rule by its express
terms could so apply. Application of this
rule to require gain recognition in a foreign-
to-foreign liquidation is not consistent with
the approach of the final regulations that re-
quire gain recognition in the case of a
foreign-to-foreign liquidation only in par-
ticular and limited circumstances. Accord-
ingly, these proposed regulations would
amend the anti-abuse rule to limit its ap-
plication only to outbound liquidations.
The proposed regulations also would
clarify what constitutes a principal pur-
pose of tax avoidance for purposes of the
anti-abuse rule. The proposed regulations
similarly would clarify the anti-abuse rule
in § 1.367(e)-2(b)(2)(iii)(C)(1).
### Effective Date
These regulations are proposed to ap-
ply to distributions occurring on or after
September 7, 1999, or to distributions in
taxable years ending after August 8, 1999,
if the taxpayer has elected to apply the fi-
nal regulations to such distributions. The
IRS intends that, prior to the publication of
these regulations in final form, the Com-
missioner will exercise its authority un-
der the anti-abuse rules in § 1.367(e)-
2(b)(2)(iii)(C)(1) and (d) in a manner that
is consistent with these proposed regula-
tions.
### Special Analyses
It has been determined that this notice
of proposed rulemaking is not a signifi-
cant regulatory action as defined in Ex-
ecutive Order 12866. Therefore, a regulatory
assessment is not required. Pursuant to sec-
tion 7805(f) of the Internal Revenue Code,
this notice of proposed rulemaking will be
submitted to the Chief Counsel for Advo-
cacy of the Small Business Administra-
tion for comment on its impact on small
business.
### Comments and Public Hearing
Before these proposed regulations are
adopted as final regulations, consideration
will be given to any written comments (a
signed original and eight (8) copies) that are
submitted timely to the IRS. Alternatively,
taxpayers may submit comments electroni-
cally directly to the IRS Internet site at
www.irs.gov/regs. The IRS and Treasury
Department request comments on the clar-
ity of the proposed rules and how they can
be made easier to understand. All com-
ments will be available for public inspec-
tion and copying.
A public hearing has been scheduled for
March 3, 2003, beginning at 10:00 a.m. in
room 4718, Internal Revenue Building, 1111
Constitution Avenue, NW, Washington, DC.
Due to building security procedures, visi-
tors must enter at the Constitution Av-
enue entrance. In addition, all visitors must
present photo identification to enter the
building. Because of access restrictions, visi-
tors will not be admitted beyond the im-
mediate entrance area more than 30 minutes
before the hearing starts. For information
about having your name placed on the
building access list to attend the hearing,
see the FOR FURTHER INFORMATION
CONTACT portion of this preamble.
The rules of 26 CFR 601.601(a)(3) ap-
ply to the hearing. Persons who wish to
present oral comments must submit writ-
ten comments and an outline of the top-
ics to be discussed and the time to be
devoted to each topic (a signed original and
eight (8) copies) by February 11, 2003. A
period of 10 minutes will be allotted to each
person for making comments. An agenda
showing the scheduling of the speakers will
be prepared after the deadline for review-
ing outlines has passed. Copies of the
agenda will be available free of charge at
the hearing.
### Drafting Information
The principal author of these proposed
regulations is Aaron A. Farmer of the Of-
fice of the Associate Chief Counsel (Inter-
national), IRS. However, other personnel
from the Treasury and the IRS partici-
pated in their development.
* * * * *
### Proposed Amendments to the Regulations
Accordingly, 26 CFR part 1 is proposed
to be amended as follows:
#### PART 1-INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * *
Par. 2. Section 1.367(e)-2, is amended
as follows:
1\. Paragraph (b)(2)(iii)(C)(1) is amended
by removing the parenthetical "(taken to-
gether or separately)" and adding "when
taken together" in its place.
2\. Paragraph (d) is revised.
The revision reads as follows:
§ 1.367(e)-2 Distributions described in
section 367(e)(2).
* * * * *
(d) Anti-abuse rule. The Commissioner
may require a domestic liquidating corpo-
ration to recognize gain on a distribution
in liquidation described in paragraph (b) of
this section (or treat the liquidating corpo-
ration as if it had recognized loss on a dis-
tribution in liquidation), if a principal
purpose of the liquidation is the avoid-
ance of U.S. tax (including, but not lim-
ited to, the distribution of a liquidating
corporation's earnings and profits with a
principal purpose of avoiding U.S. tax). A
liquidation may have a principal purpose of
tax avoidance even though the tax avoid-
ance purpose is outweighed by other pur-
poses when taken together.
* * * * *
Robert E. Wenzel,
Deputy Commissioner of
Internal Revenue.
(Filed by the Office of Federal Register on November 19,
2002, 8:45 a.m., and published in the issue of the Federal Reg-
ister for November 20, 2002, 67 F.R. 70031)
## Extension of Application Per- iod for Rev. Proc. 2002-67
### Announcement 2002-110
The Internal Revenue Service has ex-
tended the time to apply to participate in
the settlement initiative for Contingent Li-
ability Transactions, the procedures for
which were prescribed in Rev. Proc. 2002-
67, 2002-43 I.R.B. 733.
### BACKGROUND
The settlement initiative in Rev. Proc.
2002-67 prescribed two optional method-
ologies for resolving cases involving Con-
tingent Liability Transactions that are the
same as or substantially similar to those de-
scribed in Notice 2001-17, 2001-1 C.B.
730. Section 4.01 of Rev. Proc. 2002-67
provides that eligible taxpayers who want
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December 16, 2002
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to participate in one of the resolution meth-
odologies provided under the revenue pro-
cedure must mail or deliver a written
application to the Service on or before Janu-
ary 2, 2003. Taxpayers must include with
their application a form stating which reso-
lution methodology they have selected and
information about their contingent liabil-
ity transaction.
### EXTENSION OF APPLICATION PERIOD
The Internal Revenue Service has re-
ceived a number of questions regarding this
initiative and intends to issue public re-
sponses to the questions posed. In order to
permit taxpayers time to consider the re-
sponses, in conjunction with considering the
settlement initiative, and for assembling the
necessary information, the Internal Rev-
enue Service has extended the applica-
tion deadline for the settlement initiative
from January 2, 2003, to March 5, 2003.
### CONTACT INFORMATION
For information regarding this announce-
ment, call Jo Ann Prager, Manager, at (202)
283-8445 (not a toll-free call). Ms. Prager
may also be reached by fax at (202) 283-
8406 or electronically at the following email
address: otsa@irs.gov. Please include "Rev-
enue Procedure 2002-67" in the subject line
of any electronic communication.
## Information Reporting Relating to Taxable Stock Transactions; Hearing
### Announcement 2002-111
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Change of date for public
hearing on proposed rulemaking.
SUMMARY: This document changes the
date of a public hearing on proposed regu-
lations (REG-143321-02, 2002-48 I.R.B.
922) relating to information reporting re-
lating to taxable stock transactions.
DATES: The public hearing originally
scheduled for Wednesday, March 5, 2003,
at 10 a.m., in room 4718, is rescheduled for
Tuesday, March 25, 2003, at 10 a.m., in
room 4718. Written or electronic outlines
of oral comments must be received by Tues-
day, March 4, 2003.
ADDRESSES: The public hearing is be-
ing held in room 4718 of the Internal Rev-
enue Service Building, 1111 Constitution
Avenue, NW, Washington, DC. Due to
building security procedures, visitors must
enter Main entrance, located at Constitu-
tion Avenue, NW. In addition, all visitors
must present photo identification to enter
the building.
Mail outlines to: CC:ITA:RU (REG-
143321-02), room 5226, Internal Rev-
enue Service, POB 7604, Ben Franklin
Station, Washington, DC 20044. Submis-
sions may be hand delivered Monday
through Friday between the hours of 8 a.m.
and 5 p.m. to: CC:ITA:RU (REG-143321-
02), Courier's Desk, Internal Revenue Ser-
vice, 1111 Constitution Avenue, NW,
Washington, DC. Alternatively, taxpayers
may submit electronic outlines of oral com-
ments directly to the IRS Internet site at
www.irs.gov/regs.
FOR FURTHER INFORMATION
CONTACT: Concerning submissions of
comments, the hearing, and/or to be placed
on the building access list to attend the hear-
ing, Treena Garrett at (202) 622-7180 (not
a toll-free number).
SUPPLEMENTARY INFORMATION:
A notice of proposed rulemaking by
cross-reference to temporary regulations and
notice of public hearing (REG-143321-
02), that was published in the Federal Reg-
ister on Monday, November 18, 2002 (67
FR 69496), announced that a public hear-
ing on proposed regulations relating to in-
formation reporting relating to taxable stock
transactions under sections 6043(c) and
6045 of the Internal Revenue Code would
be held on Wednesday, March 5, 2003, be-
ginning at 10 a.m. in room 4718 of the In-
ternal Revenue Building, 1111 Constitution
Avenue, NW, Washington, DC.
The date of the public hearing has
changed. The hearing is scheduled for Tues-
day, March 25, 2003, beginning at 10 a.m.
in room 4718, Internal Revenue Service
Building, 1111 Constitution Avenue, NW,
Washington, DC. We must receive out-
lines of oral comments by Tuesday, March
4, 2003.
Because of the controlled access restric-
tions, attendees are not admitted beyond the
lobby on the Internal Revenue Service
Building until 9:30 a.m. The IRS will pre-
pare an agenda showing the scheduling of
the speakers after the outlines are received
from the persons testifying and make cop-
ies available free of charge at the hear-
ing.
Cynthia E. Grigsby,
Chief, Regulations Unit,
Associate Chief Counsel
(Income Tax and Accounting).
(Filed by the Office of the Federal Register on November 26,
2002, 8:45 a.m., and published in the issue of the Federal Reg-
ister for November 27, 2002, 67 F.R. 70891)
## Obligations of States and Political Subdivisions; Correction
Announcement 2002-112
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Correction to final regulations.
SUMMARY: This document contains cor-
rections to final regulations (T.D. 9016,
2002-40 I.R.B. 628) that were published in
the Federal Register on Monday, Septem-
ber 23, 2002 (67 FR 59756) relating to the
definition of private activity bonds appli-
cable to tax-exempt bonds issued by state
and local governments for output facili-
ties.
DATES: This correction is effective
November 22, 2002.
FOR FURTHER INFORMATION
CONTACT: Rose M. Weber (202) 622-
3880 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
### Background
The final regulations that are the sub-
ject of these corrections is under section 141
of the Internal Revenue Code.
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Need for Correction As published, the final regulations con-
planation of Provisions", first line, the
umn, the language "U.S.C. 791a through
language "through 821(c) (or by a state au- thority" is corrected to read "through 825r (or by a state authority". § 1.141-7 [Corrected]
821(c) (does not" is corrected to read "U.S.C. 791a through 825r) (or by a state regulatory authority under comparable pro- visions of state law) does not".
tain errors that may prove to be mislead- ing and are in need of clarification.
Correction of Publication
2. On page 59761, column 2, § 1.141-
Cynthia E. Grigsby,
Accordingly, the publication of final regulations (T.D. 9016), that were the sub- ject of FR Doc. 02-24137, is corrected as
7(g)(1)(ii)(B), line 5, the language "Act (16
Chief, Regulations Unit,
U.S.C. 791a through 821c) (or by" is cor- rected to read "Act (16 U.S.C. 791a through
Associate Chief Counsel (Income Tax and Accounting).
follows:
825r) (or by".
(Filed by the Office of the Federal Register on November 26,
1. On page 59758, column 2, in the pre-
3. On page 59761, column 3, § 1.141- 7(g)(3), fifth line from the top of the col-
2002, 8:45 a.m., and published in the issue of the Federal Reg- ister for November 27, 2002, 67 F.R. 70845)
amble under the paragraph heading "Ex-
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# 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:
Amplified describes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle
applied to A, and the new ruling holds
that the same principle also applies to B,
the earlier ruling is amplified. (Compare
with modified, below).
Clarified is used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.
Distinguished describes a situation
where a ruling mentions a previously
published ruling and points out an essen-
tial difference between them.
Modified is used where the substance
of a previously published position is
being changed. Thus, if a prior ruling
held that a principle applied to A but not
to B, and the new ruling holds that it
applies to both A and B, the prior ruling
is modified because it corrects a pub-
lished position. (Compare with amplified
and clarified, above).
Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used
in a ruling that lists previously published
rulings that are obsoleted because of
changes in law or regulations. A ruling
may also be obsoleted because the sub-
stance has been included in regulations
subsequently adopted.
Revoked describes situations where the
position in the previously published rul-
ing is not correct and the correct position
is being stated in the new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a
period of time in separate rulings. If the
new ruling does more than restate the
substance of a prior ruling, a combination
of terms is used. For example, modified
and superseded describes a situation
where the substance of a previously pub-
lished ruling is being changed in part and
is continued without change in part and it
is desired to restate the valid portion of
the previously published ruling in a new
ruling that is self contained. In this case,
the previously published ruling is first
modified and then, as modified, is super-
seded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.
Suspended is used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.
# Abbreviations
The following abbreviations in current
use and formerly used will appear in
material published in the Bulletin.
A-Individual.
Acq .- Acquiescence.
B-Individual.
FISC-Foreign International Sales Company.
FPH-Foreign Personal Holding Company.
F.R .- Federal Register.
FUTA-Federal Unemployment Tax Act.
FX-Foreign Corporation.
G.C.M .- Chief Counsel's Memorandum.
GE-Grantee.
GP-General Partner.
COOP-Cooperative.
GR-Grantor.
Ct.D .- Court Decision.
IC-Insurance Company.
CY-County.
I.R.B .- Internal Revenue Bulletin.
D-Decedent.
LE-Lessee.
TP-Taxpayer.
DC-Dummy Corporation.
LP-Limited Partner.
LR-Lessor.
TT-Trustee.
U.S.C .- United States Code.
DISC-Domestic International Sales Corporation.
DR-Donor.
O Organization.
Y-Corporation.
E-Estate.
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.
TR-Trust.
DE-Donee.
Del. Order-Delegation Order.
M-Minor.
Nonacq .- Nonacquiescence.
X-Corporation.
Z-Corporation.
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.
BE-Beneficiary.
BK-Bank.
B.T.A .- Board of Tax Appeals.
C-Individual.
C.B .- Cumulative Bulletin.
CFR-Code of Federal Regulations.
CI-City.
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<!-- PageBreak -->
Numerical Finding List1
Notices:
Proposed Regulations-Continued:
Bulletin 2002-26 through 2002-49
2002-42, 2002-27 I.R.B. 36
REG-106359-02, 2002-34 I.R.B. 405
2002-43, 2002-27 I.R.B. 38
REG-122564-02, 2002-26 I.R.B. 25
Announcements:
2002-44, 2002-27 I.R.B. 39
REG-123305-02, 2002-26 I.R.B. 26
2002-45, 2002-28, I.R.B. 93
REG-124256-02, 2002-33 I.R.B. 383
2002-59, 2002-26 I.R.B. 28
2002-46, 2002-28 I.R.B. 96
REG-124667-02, 2002-44 I.R.B. 791
2002-60, 2002-26 I.R.B. 28
2002-47, 2002-28 I.R.B. 97
REG-131478-02, 2002-47 I.R.B. 892
2002-61, 2002-27 I.R.B. 72
2002-48, 2002-29 I.R.B. 130
REG-133254-02, 2002-34 I.R.B. 412
2002-62, 2002-27 I.R.B. 72
2002-49, 2002-29 I.R.B. 130
REG-134026-02, 2002-40 I.R.B. 684
2002-63, 2002-27 I.R.B. 72
2002-50, 2002-28 I.R.B. 98
REG-141832-02, 2002-48 I.R.B. 921
2002-64, 2002-27 I.R.B. 72
2002-51, 2002-29 I.R.B. 131
REG-143321-02, 2002-48 I.R.B. 922
2002-65, 2002-29 I.R.B. 182
2002-52, 2002-30 I.R.B. 187
2002-66, 2002-29 I.R.B. 183
2002-53, 2002-30 I.R.B. 187
Revenue Procedures:
2002-67, 2002-30 I.R.B. 237
2002-54, 2002-30 I.R.B. 189
2002-43, 2002-28 I.R.B. 99
2002-68, 2002-31 I.R.B. 283
2002-55, 2002-36 I.R.B. 481
2002-44, 2002-26 I.R.B. 10
2002-69, 2002-31 I.R.B. 283
2002-56, 2002-32 I.R.B. 319
2002-45, 2002-27 I.R.B. 40
2002-70, 2002-31 I.R.B. 284
2002-57, 2002-33 I.R.B. 379
2002-46, 2002-28 I.R.B. 105
2002-71, 2002-32 I.R.B. 323
2002-58, 2002-35 I.R.B. 432
2002-47, 2002-29 I.R.B. 133
2002-72, 2002-32 I.R.B. 323
2002-59, 2002-36 I.R.B. 481
2002-48, 2002-37 I.R.B. 531
2002-73, 2002-33 I.R.B. 387
2002-60, 2002-36 I.R.B. 482
2002-49, 2002-29 I.R.B. 172
2002-74, 2000-33 I.R.B. 387
2002-61, 2002-38 I.R.B. 563
2002-50, 2002-29 I.R.B. 173
2002-75, 2002-34 I.R.B. 416
2002-62, 2002-39 I.R.B. 574
2002-51, 2002-29 I.R.B. 175
2002-76, 2002-35 I.R.B. 471
2002-63, 2002-40 I.R.B. 644
2002-52, 2002-31 I.R.B. 242
2002-77, 2002-35 I.R.B. 471
2002-64, 2002-41 I.R.B. 690
2002-53, 2002-31 I.R.B. 253
2002-78, 2002-36 I.R.B. 514
2002-65, 2002-41 I.R.B. 690
2002-54, 2002-35 I.R.B. 432
2002-79, 2002-36 I.R.B. 515
2002-66, 2002-42 I.R.B. 716
2002-55, 2002-35 I.R.B. 435
2002-80, 2002-36 I.R.B. 515
2002-67, 2002-42 I.R.B. 716
2002-56, 2002-36 I.R.B. 483
2002-81, 2002-37 I.R.B. 533
2002-68, 2002-43 I.R.B. 730
2002-57, 2002-39 I.R.B. 575
2002-82, 2002-37 I.R.B. 533
2002-69, 2002-43 I.R.B. 730
2002-58, 2002-40 I.R.B. 644
2002-83, 2002-38 I.R.B. 564
2002-70, 2002-44 I.R.B. 765
2002-59, 2002-39 I.R.B. 615
2002-84, 2002-37 I.R.B. 533
2002-71, 2002-45 I.R.B. 830
2002-60, 2002-40 I.R.B. 645
2002-85, 2002-39 I.R.B. 624
2002-72, 2002-46 I.R.B. 843
2002-61, 2002-39 I.R.B. 616
2002-86, 2002-39 I.R.B. 624
2002-73, 2002-46 I.R.B. 844
2002-62, 2002-40 I.R.B. 683
2002-87, 2002-39 I.R.B. 624
2002-74, 2002-47 I.R.B. 884
2002-63, 2002-41 I.R.B. 691
2002-88, 2002-38 I.R.B. 564
2002-75, 2002-47 I.R.B. 884
2002-64, 2002-42 I.R.B. 718
2002-89, 2002-39 I.R.B. 626
2002-76, 2002-48 I.R.B. 917
2002-65, 2002-41 I.R.B. 700
2002-90, 2002-40 I.R.B. 684
2002-78, 2002-48 I.R.B. 919
2002-66, 2002-42 I.R.B. 725
2002-91, 2002-40 I.R.B. 685
2002-67, 2002-43 I.R.B. 733
2002-92, 2002-41 I.R.B. 709
Proposed Regulations:
2002-68, 2002-43 I.R.B. 753
2002-93, 2002-41 I.R.B. 709
2002-69, 2002-45 I.R.B. 831
2002-94, 2002-42 I.R.B. 728
REG-209116-89, 2002-47 I.R.B. 889
2002-70, 2002-46 I.R.B. 845
2002-95, 2002-42 I.R.B. 728
REG-248110-96, 2002-26 I.R.B. 19
2002-71, 2002-48 I.R.B. 850
2002-96, 2002-43 I.R.B. 756
REG-251003-96, 2002-49 I.R.B. 935
I.R.B. 931
2002-97, 2002-43 I.R.B. 757
REG-110311-98, 2002-28 I.R.B. 109
2002-72, 2002-49
2002-98, 2002-43 I.R.B. 758
REG-103823-99, 2002-27 I.R.B. 44
2002-73, 2002-49 I.R.B. 932
2002-99, 2002-43 I.R.B. 758
REG-103829-99, 2002-27 I.R.B. 59
Revenue Rulings:
2002-100, 2002-44 I.R.B. 799
REG-103735-00, 2002-28 I.R.B. 109
2002-101, 2002-44 I.R.B. 800
REG-103735-00, 2002-45 I.R.B. 832
2002-38, 2002-26 I.R.B. 4
2002-102, 2002-44 I.R.B. 802
REG-103736-00, 2002-45 I.R.B. 834
2002-39, 2002-27 I.R.B. 33
2002-103, 2002-45 I.R.B. 836
REG-106457-00, 2002-26 I.R.B. 23
2002-40, 2002-27 I.R.B. 30
2002-104, 2002-45 I.R.B. 836
REG-106871-00, 2002-30 I.R.B. 190
2002-41, 2002-28 I.R.B. 75
2002-105, 2002-46 I.R.B. 872
REG-106876-00, 2002-34 I.R.B. 392
2002-42, 2002-28 I.R.B. 76
2002-106, 2002-46 I.R.B. 872
REG-106879-00, 2002-34 I.R.B. 402
2002-43, 2002-28 I.R.B. 85
2002-107, 2002-48 I.R.B. 923
REG-107524-00, 2002-28 I.R.B. 110
2002-44, 2002-28 I.R.B. 84
2002-108, 2002-49 I.R.B. 952
REG-112306-00, 2002-44 I.R.B. 767
2002-45, 2002-29 I.R.B. 116
2002-109, 2002-49 I.R.B. 952
REG-115285-01, 2002-27 I.R.B. 62
2002-46, 2002-29 I.R.B. 117
REG-115781-01, 2002-33 I.R.B. 380
2002-47, 2002-29 I.R.B. 119
Court Decisions:
REG-116644-01, 2002-31 I.R.B. 268
2002-48, 2002-31 I.R.B. 239
REG-123345-01, 2002-32 I.R.B. 321
2002-49, 2002-32 I.R.B. 288
2075, 2002-38 I.R.B. 548
REG-126024-01, 2002-27 I.R.B. 64
2002-50, 2002-32 I.R.B. 292
2076, 2002-47 I.R.B. 875
REG-136311-01, 2002-36 I.R.B. 485
2002-51, 2002-33 I.R.B. 327
REG-150313-01, 2002-44 I.R.B. 777
2002-52, 2002-34 I.R.B. 388
REG-164754-01, 2002-30 I.R.B. 212
2002-53, 2002-35 I.R.B. 427
REG-165868-01, 2002-31 I.R.B. 270
2002-54, 2002-37 I.R.B. 527
REG-103777-02, 2002-47 I.R.B. 889
2002-55, 2002-37 I.R.B. 529
1 A cumulative list of all revenue rulings, revenue
procedures, Treasury decisions, etc., published in
Internal Revenue Bulletins 2002-1 through 2002-25 is
in Internal Revenue Bulletin 2002-26, dated July 1, 2002.
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Revenue Rulings-Continued:
2002-56, 2002-37 I.R.B. 526
2002-57, 2002-37 I.R.B. 526
2002-58, 2002-38 I.R.B. 541
2002-59, 2002-38 I.R.B. 557
2002-60, 2002-40 I.R.B. 641
2002-61, 2002-40 I.R.B. 639
2002-62, 2002-42 I.R.B. 710
2002-63, 2002-45 I.R.B. 803
2002-64, 2002-41 I.R.B. 688
2002-65, 2002-43 I.R.B. 729
2002-66, 2002-45 I.R.B. 812
2002-67, 2002-47 I.R.B. 873
2002-68, 2002-45 I.R.B. 808
2002-69, 2002-44 I.R.B. 760
2002-71, 2002-44 I.R.B. 763
2002-72, 2002-44 I.R.B. 759
2002-73, 2002-45 I.R.B. 805
2002-74, 2002-45 I.R.B. 814
2002-75, 2002-45 I.R.B. 812
2002-76, 2002-46 I.R.B. 840
2002-77, 2002-45 I.R.B. 806
2002-78, 2002-48 I.R.B. 915
2002-79, 2002-48 I.R.B. 908
2002-80, 2002-49 I.R.B. 925
2002-81, 2002-49 I.R.B. 928
2002-83, 2002-49 I.R.B. 927
Social Security Contribution and
Benefit Base; Domestic Employee
Coverage Threshold:
2002-46, I.R.B. 871
Treasury Decisions:
8997, 2002-26 I.R.B. 6
8998, 2002-26 I.R.B. 1
8999, 2002-28 I.R.B. 78
9000, 2002-28 I.R.B. 87
9001, 2002-29 I.R.B. 128
9002, 2002-29 I.R.B. 120
9003, 2002-32 I.R.B. 294
9004, 2002-33 I.R.B. 331
9005, 2002-32 I.R.B. 290
9006, 2002-32 I.R.B. 315
9007, 2002-33 I.R.B. 349
9008, 2002-33 I.R.B. 335
9009, 2002-33 I.R.B. 328
9010, 2002-33 I.R.B. 341
9011, 2002-33 I.R.B. 356
9012, 2002-34 I.R.B. 389
9013, 2002-38 I.R.B. 542
9014, 2002-35 I.R.B. 429
9015, 2002-40 I.R.B. 642
9016, 2002-40 I.R.B. 628
9017, 2002-45 I.R.B. 815
9018, 2002-45 I.R.B. 823
9019, 2002-47 I.R.B. 874
9020, 2002-48 I.R.B. 907
9022, 2002-48 I.R.B. 909
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Finding List of Current Actions
on Previously Published Items1
Bulletin 2002-26 through 2002-49
Announcements:
98-99
Superseded by
Rev. Proc. 2002-44, 2002-26 I.R.B. 10
2000-4
Modified by
Ann. 2002-60, 2002-26 I.R.B. 28
2001-9
Superseded by
Rev. Proc. 2002-44, 2002-26 I.R.B. 10
Notices:
89-25
Modified by
Rev. Rul. 2002-62, 2002-42 I.R.B. 710
97-26
Modified and superseded by
Notice 2002-62, 2002-39 I.R.B. 574
2001-6
Superseded by
Notice 2002-63, 2002-40 I.R.B. 644
2001-37
Modified by
Rev. Proc. 2002-73, 2002-49 I.R.B. 932
2001-62
Modified and superseded by
Notice 2002-62, 2002-39 I.R.B. 574
2002-92
Corrected by
Ann. 2002-103, 2002-45 I.R.B. 836
## Proposed Regulations:
EE-79-89
Withdrawn by
REG-209116-89, 2002-47 I.R.B. 889
REG-208280-86
Withdrawn by
REG-136311-01, 2002-36 I.R.B. 485
REG-209114-90
Corrected by
Ann. 2002-65, 2002-29 I.R.B. 182
REG-209813-96
Withdrawn by
REG-106871-00, 2002-30 I.R.B. 190
REG-103823-99
Corrected by
Ann. 2002-67, 2002-30 I.R.B. 237
Ann. 2002-79, 2002-36 I.R.B. 515
REG-103829-99
Corrected by
Ann. 2002-82, 2002-37 I.R.B. 533
Ann. 2002-95, 2002-42 I.R.B. 728
Proposed Regulations-Continued:
Revenue Procedures-Continued:
REG-105885-99
91-23
Corrected by
Modified and superseded by
Ann. 2002-67, 2002-30 I.R.B. 237
Rev. Proc. 2002-52, 2002-31 I.R.B. 242
REG-105369-00
91-26
Clarified by
Modified and superseded by
Notice 2002-52, 2002-30 I.R.B. 187
Rev. Proc. 2002-52, 2002-31 I.R.B. 242
Corrected by
Ann. 2002-67, 2002-30 I.R.B. 237
95-18 Superseded by
REG-106879-00
Rev. Proc. 2002-51, 2002-29 I.R.B. 175
Corrected by
Ann. 2002-100, 2002-44 I.R.B. 799
96-13
Modified and superseded by
REG-118861-00
Rev. Proc. 2002-52, 2002-31 I.R.B. 242
Corrected by
Ann. 2002-67, 2002-30 I.R.B. 237
96-14
REG-126100-00
Modified and superseded by Rev. Proc. 2002-52, 2002-31 I.R.B. 242
Withdrawn by
REG-133254-02, 2002-34 I.R.B. 412
96-53
REG-136193-01
Amplified by
Corrected by
Rev. Proc. 2002-52, 2002-31 I.R.B. 242
Ann. 2002-67, 2002-30 I.R.B. 237
2000-20 Modified by
REG-136311-01
Corrected by
Rev. Proc. 2002-73, 2002-49 I.R.B. 932
Ann. 2002-94, 2002-42 I.R.B. 728
2001-12
Ann. 2002-102, 2002-44 I.R.B. 802
Obsoleted by
REG-161424-01
T.D. 9004, 2002-33 I.R.B. 331
Corrected by
2001-15
Ann. 2002-67, 2002-30 I.R.B. 237
Superseded by
REG-165706-01
Rev. Proc. 2002-64, 2002-42 I.R.B. 718
Corrected by
2001-17
Ann. 2002-67, 2002-30 I.R.B. 237
Modified and superseded by
REG-165868-01
Rev. Proc. 2002-47, 2002-29 I.R.B. 133
Corrected by
2001-26
Ann. 2002-93, 2002-41 I.R.B. 709
Superseded by
REG-102740-02
Rev. Proc. 2002-53, 2002-31 I.R.B. 253
Corrected by
2001-45
Ann. 2002-67, 2002-30 I.R.B. 237
Superseded by
REG-106359-02
Rev. Proc. 2002-60, 2002-40 I.R.B. 645
Corrected by
2001-46
Ann. 2002-81, 2002-37 I.R.B. 533
Modified and amplified by
REG-108697-02
Rev. Proc. 2002-65, 2002-41 I.R.B. 700
Corrected by
2001-47
Ann. 2002-84, 2002-37 I.R.B. 533
Superseded by
REG-123305-02
Rev. Proc. 2002-63, 2002-41 I.R.B. 691
Corrected by
2001-50 Superseded by
Ann. 2002-69, 2002-31 I.R.B. 283
Revenue Procedures:
Rev. Proc. 2002-57, 2002-39 I.R.B. 575
66-50
2001-52
Modified, amplified, and superseded by
Updated by
Notice 2002-75, 2002-47 I.R.B. 884
Rev. Proc. 2002-66, 2002-42 I.R.B. 725
81-40
2001-53
Modified and superseded by
Superseded by
Notice 2002-75, 2002-47 I.R.B. 884
Rev. Proc. 2002-71, 2002-46 I.R.B. 850
88-10
2001-54
Superseded by
Superseded by
Rev. Proc. 2002-48, 2002-37 I.R.B. 531
Rev. Proc. 2002-61, 2002-39 I.R.B. 616
1 A cumulative list of current actions on previously published
items in Internal Revenue Bulletins 2002-1 through 2002-25 is
in Internal Revenue Bulletin 2002-26, dated July 1, 2002.
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<!-- PageBreak -->
Revenue Procedures-Continued:
Revenue Rulings-Continued:
Treasury Decisions:
2002-6
69-259
8869
Modified by
Modified and superseded by
Corrected by
Rev. Proc. 2002-73, 2002-49 I.R.B. 932
Rev. Rul. 2002-50, 2002-32 I.R.B. 292
Ann. 2002-106, 2002-46 I.R.B. 872
2002-9
69-595
8925
Modified and amplified by
Obsoleted in part by
Corrected by
Rev. Proc. 2002-46, 2002-28 I.R.B. 105 Rev. Proc. 2002-65, 2002-41 I.R.B. 700
T.D. 9010, 2002-33 I.R.B. 341
Ann. 2002-89, 2002-39 I.R.B. 626
Rev. Rul. 2002-73, 2002-45 I.R.B. 805
70-608
8997
Amplified, clarified, and modified by
Obsoleted in part by
Corrected by
Rev. Proc. 2002-54, 2002-35 I.R.B. 432
T.D. 9010, 2002-33 I.R.B. 341
Ann. 2002-68, 2002-31 I.R.B. 283
2002-13
73-232
8999
Modified by
Obsoleted by
Corrected by
Rev. Proc. 2002-45, 2002-27 I.R.B. 40
T.D. 9010, 2002-33 I.R.B. 341
Ann. 2002-71, 2002-32 I.R.B. 323
2002-15
76-225
9013
Modified and superseded by
Revoked by
Corrected by
Rev. Proc. 2002-59, 2002-39 I.R.B. 615
REG-115781-01, 2002-33 I.R.B. 380
Ann. 2002-83, 2002-38 I.R.B. 564
2002-16
77-53
Modified and superseded by
Obsoleted by
Rev. Proc. 2002-68, 2002-43 I.R.B. 753
T.D. 9010, 2002-33 I.R.B. 341
2002-19
85-50
Amplified and clarified by
Obsoleted by
Rev. Proc. 2002-54, 2002-35 I.R.B. 432
T.D. 2002-33 I.R.B. 341
2002-35
92-17
Modified by
Amplified by
Rev. Proc. 2002-73, 2002-49 I.R.B. 932
Rev. Rul. 2002-49, 2002-32 I.R.B. 288
2002-37
92-75
Clarified and modified by
Clarified by
Notice 2002-72, 2002-46 I.R.B. 843
Rev. Proc. 2002-52, 2002-31 I.R.B. 242
2002-38
93-70
Clarified and modified by
Obsoleted by
Notice 2002-72, 2002-46 I.R.B. 843
T.D. 9010, 2002-33 I.R.B. 341
2002-39
Clarified and modified by
94-76
Notice 2002-72, 2002-46 I.R.B. 843
Amplified by Rev. Rul. 2002-42, 2002-28 I.R.B. 76
Revenue Rulings:
99-14
54-571
Modified and superseded by
Obsoleted by
Rev. Rul. 2002-69 2002-44 I.R.B. 760
T.D. 9010, 2002-33 I.R.B. 341
2001-62
55-534
Modified by
Distinguished by
Rev. Proc. 2002-73, 2002-49 I.R.B. 932
Rev. Rul. 2002-60, 2002-40 I.R.B. 641
2001-64
55-606
Supplemented and superseded by
Obsoleted by
Rev. Rul. 2002-78, 2002-48 I.R.B. 915
T.D. 9010, 2002-33 I.R.B. 341
2001-65
59-328
Supplemented and superseded by
Obsoleted by
Rev. Rul. 2002-79, 2002-48 I.R.B. 908
T.D. 9010, 2002-33 I.R.B. 341
2002-3
64-36
Amplified by
Obsoleted by
Rev. Rul. 2002-80, 2002-49 I.R.B. 925
T.D. 9010, 2002-33 I.R.B. 341
2002-27
65-129
Modified by
Obsoleted by
Rev. Proc. 2002-73, 2002-49 I.R.B. 932
T.D. 9010, 2002-33 I.R.B. 341
2002-46 Modified by
67-197
Rev. Rul. 2002-73, 2002-45 I.R.B. 805
Obsoleted by T.D. 9010, 2002-33 I.R.B. 341
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