Internal Revenue Bulletin 2003-15 (PDF rendition): IRS Announcements

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

HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
SPECIAL ANNOUNCEMENT
Announcement 2003–19, page 723.
This document contains the annual report to the public concern-
ing Advance Pricing Agreements (APAs) and the experience of
the APA Program during calendar year 2002. This document does
not provide guidance regarding the application of the arm’s length
standard; rather, it reports on the structure and activities of the
APA program.
INCOME TAX
Rev. Rul. 2003–37, page 717.
Capital expenditures; rotable spare parts. This ruling in-
forms taxpayers that the Service will followHewlett Packard,
Inc., v. United States,71 F.3d 398 (Fed. Cir. 1995),rev’g Apollo
Computer, Inc. and Subsidiaries v. United States,32 Fed. CI.
334 (1994, andHoneywell, Inc. and Subsidiaries v. Com-
missioner, T.C. Memo 1992–453,aff’d,27 F.3d 571 (8th Cir.
1994). Accordingly, taxpayers may treat rotable spare parts as
depreciable assets if the taxpayer’s facts are substantially simi-
lar toHewlett PackardandHoneywell.
EXEMPT ORGANIZATIONS
Announcement 2003–20, page 750.
A list is provided of organizations now classified as private foun-
dations.
ADMINISTRATIVE
Announcement 2003–17, page 722.
The Service announces that an updated edition of Publication 538,
Accounting Periods and Methods(revised March 2003), is now
available. This publication provides information on how to deter-
mine the appropriate accounting period and accounting method
for your business.
Bulletin No. 2003–15
April 14, 2003
Announcements of Disbarments and Suspensions begin on page 718.
Finding Lists begin on page ii.

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.
April 14, 20032003–15 I.R.B.

Part I. Rulings and Decisions Under the Internal Revenue Code of 1986
Section 263.—Capital
Expenditures
26 CFR 1.263(a)–1: Capital expenditures.
(Also §§ 471; 1.471–1 and §§ 167; 167(a)–1.)
Capital expenditures; rotable spare
parts. This ruling informs taxpayers that
the Service will followHewlett Packard,
Inc., v. United States, 71 F.3d 398 (Fed.
Cir. 1995),rev’g Apollo Computer, Inc.
and Subsidiaries v. United States,32
Fed. Cl. 334 (1994, andHoneywell, Inc.
and Subsidiaries v. Commissioner, T.C.
Memo 1992–453,aff’d, 27 F.3d 571 (8
th
Cir. 1994). Accordingly, taxpayers may
treat rotable spare parts as depreciable
assetsifthetaxpayer’sfactsare
substantially similar toHewlett Packard
andHoneywell.
Rev. Rul. 2003–37
The Internal Revenue Service will fol-
lowHewlett Packard, Inc. v. United States,
71 F.3d 398 (Fed. Cir. 1995),rev’g Apollo
Computer, Inc. and Subsidiaries v. United
States, 32 Fed. Cl. 334 (1994), andHon-
eywell, Inc. and Subsidiaries v. Commis-
sioner, T.C. Memo. 1992–453,aff’d,27
F.3d 571 (8
th
Cir. 1994). Accordingly, tax-
payers may treat rotable spare parts as de-
preciable assets if the taxpayer’s facts are
substantially similar toHewlett Packardand
Honeywell.
InHewlett Packard, the taxpayer manu-
factured and sold computers and related
products, and provided maintenance and re-
pair services under its product warranties
and maintenance agreements. Most of the
taxpayer’s computer maintenance busi-
ness was conducted pursuant to standard-
ized maintenance agreements that obligated
the taxpayer to provide all parts and la-
bor, product upgrades, preventive mainte-
nance, and telephone assistance necessary
to keep a customer’s computer operational
for the duration of the contract (usually one
year) in exchange for a predetermined fee.
In conducting its computer maintenance
business, the taxpayer operated a separate
repair facility and sent technicians to its cus-
tomers’ locations. The taxpayer maintained
a pool of “rotable spare parts” obtained
from its manufacturing facility. The tax-
payer’s repair technicians would use this
supply of rotable spare parts to diagnose
problems in the customer’s equipment. A
customer’s part that had been identified as
the probable cause of the malfunction was
replaced with the identical functioning part
from the taxpayer’s rotable spare parts pool.
The malfunctioning part removed from the
customer’s equipment would then be re-
paired and returned to the taxpayer’s rotable
spare parts pool for continued use in the
maintenance business. The taxpayer fol-
lowed this practice of exchanging its rotable
spare parts for parts in a customer’s com-
puter to avoid rendering the computer in-
operative while the original part was
repaired.
On its federal income tax returns for the
years at issue, the taxpayer treated its pool
of rotable spare parts as a capitalized fixed
asset, which it depreciated and on which it
took investment tax credits. The Service dis-
allowed the depreciation deductions and in-
vestment tax credits on the ground that the
taxpayer was required to characterize its
pool of rotable spare parts as property held
primarily for sale in the ordinary course of
business that should be included in inven-
tory.
The Court of Federal Claims entered
judgment in favor of the Service. The court
concluded that a sale had occurred when-
ever the taxpayer exchanged one of its
rotable spare parts with a customer’s part.
However, the Court of Appeals for the Fed-
eral Circuit reversed, holding that the tax-
payer’s pool of rotable spare parts was a
capital asset used to provide services to cus-
tomers under its computer maintenance con-
tracts. The Appeals Court disagreed with
both the characterization of the exchange
of rotable spare parts as a sale and the char-
acterization of the parts as inventory.
Similarly, inHoneywell, the Tax Court
held that a pool of rotable spare parts was
not held for sale and that the taxpayer was
not required to treat the individual parts as
inventory. The court stated that the pool of
rotable spare parts was necessary to the op-
eration of the taxpayer’s maintenance ser-
vice business and was similar to an asset
used in its trade or business within the
meaning of § 167 of the Internal Revenue
Code to earn revenue from its maintenance
agreements. The Court of Appeals for the
Eighth Circuit affirmed the Tax Court’s de-
cision.
The Service has concluded, based on the
above cases, that a taxpayer may treat
rotable spare parts as depreciable assets if
the taxpayer’s facts are substantially simi-
lar to those of the above cases. The Ser-
vice intends to issue a revenue procedure
under which qualifying taxpayers may ap-
ply to obtain automatic consent to change
to a method of accounting consistent with
Hewlett PackardandHoneywell. The Ser-
vice intends to issue the revenue proce-
dure in time for taxpayers to make the
change for taxable years ending on or af-
ter December 31, 2002.
With respect to taxpayers who sell parts
from their rotable spare parts pools, the Ser-
vice requests comments on the maximum
amount of rotable spare parts sales that
should be permitted from a rotable spare
parts pool that is treated as a depreciable
asset under the rationale ofHewlett Pack-
ardandHoneywelland how such amount
should be measured (e.g., sales price of
parts sold as a percentage of total rev-
enues for the taxpayer’s computer main-
tenance business). The Service also requests
comments on any other issues that should
be addressed in the revenue procedure.
Comments should be submitted by May 23,
2003, either to:
Internal Revenue Service
P.O. Box 7604
Washington, DC 20044
Attn: CC:PA:RU (ITA:1)
Room 5553
or electronically at:Notice.Comments@
irscounsel.treas.gov(the Service’s com-
ments e-mail address). All comments are
available for public inspection and
copying.
Drafting Information
The principal author of this revenue rul-
ing is Gwen Turner of the Office of Asso-
ciate Chief Counsel (Income Tax and
Accounting). For further information re-
garding this revenue ruling, contact
Ms. Turner at (202) 622–5020 (not a toll-
free call).
2003–15 I.R.B.717April 14, 2003

Part IV. Items of General Interest
Announcement of Disciplinary Actions Involving Attorneys,
Certified Public Accountants, Enrolled Agents, and Enrolled
Actuaries—Suspensions, Censures, Disbarments, and Resignations
Announcement 2003–15
Under Title 31, Code of Federal Regu-
lations, Part 10, attorneys, certified pub-
lic accountants, enrolled agents, and enrolled
actuaries may not accept assistance from,
or assist, any person who is under disbar-
ment or suspension from practice before the
Internal Revenue Service if the assistance
relates to a matter constituting practice be-
fore the Internal Revenue Service and may
not knowingly aid or abet another person
to practice before the Internal Revenue Ser-
vice during a period of suspension, disbar-
ment, or ineligibility of such other person.
To enable attorneys, certified public ac-
countants, enrolled agents, and enrolled ac-
tuaries to identify persons to whom these
restrictions apply, the Director, Office of
Professional Responsibility will announce
in the Internal Revenue Bulletin their
names, their city and state, their profes-
sional designation, the effective date of dis-
ciplinary action, and the period of
suspension. This announcement will ap-
pear in the weekly Bulletin at the earliest
practicable date after such action and will
continue to appear in the weekly Bulle-
tins for five successive weeks.
Suspensions From Practice Before the Internal Revenue
Service After Notice and an Opportunity for a Proceeding
Under Title 31, Code of Federal Regu-
lations, Part 10, after notice and an oppor-
tunity for a proceeding before an
administrative law judge, the following in-
dividuals have been placed under suspen-
sion from practice before the Internal
Revenue Service:
NameAddressDesignationEffective Date
Cramer, GeorgeChicago, ILCPAJanuary 18, 2003
to
January 17, 2005
Disbarments From Practice Before the Internal Revenue
Service After Notice and an Opportunity for a Proceeding
Under Title 31, Code of Federal Regu-
lations, Part 10, after notice and an oppor-
tunity for a proceeding before an
administrative law judge, the following in-
dividuals have been disbarred from prac-
tice before the Internal Revenue Service:
NameAddressDesignationEffective Date
Whalley, Christopher J.Ellsworth, MEAttorneyJuly 28, 2002
Chapin, Frank L.Sandpoint, IDEnrolled AgentAugust 13, 2002
Engstrand Jr., Edward E.Minneapolis, MNCPANovember 2, 2002
Fisher, JoannaPortland, OREnrolled AgentNovember 15, 2002
Consent Suspensions From Practice Before the Internal
Revenue Service
Under Title 31, Code of Federal Regu-
lations, Part 10, an attorney, certified pub-
lic accountant, enrolled agent, or enrolled
actuary, in order to avoid institution or con-
clusion of a proceeding for his or her dis-
barment or suspension from practice before
the Internal Revenue Service, may offer his
or her consent to suspension from such
practice. The Director, Office of Profes-
April 14, 20037182003–15 I.R.B.

sional Responsibility, in his discretion, may
suspend an attorney, certified public ac-
countant, enrolled agent or enrolled actu-
ary in accordance with the consent offered.
The following individuals have been
placed under consent suspension from prac-
tice before the Internal Revenue Service:
NameAddressDesignationDate of Suspension
Kuhajda, BenPlainfield, ILCPAAugust 26, 2002
to
August 24, 2005
Vaughn, James A.Albuquerque, NMCPAOctober 1, 2002
to
September 29, 2004
McBroom, ByronManteca, CACPAOctober 21, 2002
to
October 19, 2006
Jacobs, RobertPhiladelphia, PAAttorneyOctober 21, 2002
to
April 20, 2006
Kwak, JongBeverly Hills, CAAttorneyOctober 22, 2002
to
October 20, 2003
Smith, Frank L.Brooksville, FLAttorneyNovember 1, 2002
to
October 30, 2005
Schwartz, Kenneth J.Woodland Hills, CAAttorneyNovember 1, 2002
to
February 27, 2006
Agulnick, Barry W.New York, NYAttorneyNovember 1, 2002
to
April 29, 2004
O’Connor, Thomas P.Palos Park, ILCPANovember 1, 2002
to
October 20, 2003
Brand, Joe A.Dundee, OHCPANovember 18, 2002
to
November 16, 2004
Battino, StevenPlainview, NYCPANovember 25, 2002
to
May 23, 2004
Chipman, KenFarmington, NMEnrolled AgentDecember 1, 2002
to
November 29, 2003
2003–15 I.R.B.719April 14, 2003

NameAddressDesignationDate of Suspension
Kirgis, Grant A.Rochester, MNCPADecember 1, 2002
to
May 30, 2003
Welch, FrankStamford, CTCPAIndefinite
from
January 31, 2003
Pickens, ValerieSeattle, WACPAJanuary 1, 2003
to
December 30, 2004
Kidd, Roger F.Philadelphia, PAAttorneyJanuary 20, 2003
to
April 18, 2003
Sullivan, RaymondSonoma, CAAttorneyMarch 15, 2003
to
November 14, 2003
Expedited Suspensions From Practice Before the Internal
Revenue Service
Under Title 31, Code of Federal Regu-
lations, Part 10, the Director, Office of Pro-
fessional Responsibility, is authorized to
immediately suspend from practice be-
fore the Internal Revenue Service any prac-
titioner who, within five years from the date
the expedited proceeding is instituted (1) has
had a license to practice as an attorney, cer-
tified public accountant, or actuary sus-
pended or revoked for cause or (2) has been
convicted of certain crimes.
The following individuals have been
placed under suspension from practice be-
fore the Internal Revenue Service by vir-
tue of the expedited proceeding provisions:
NameAddressDesignationDate of Suspension
Pirro, Anthony G.South Salem, NYCPAIndefinite
from
June 26, 2002
Scott, RogerBuffalo, NYAttorneyIndefinite
from
August 12, 2002
Patrick, GeorgeCheshire, CTCPAIndefinite
from
September 9, 2002
Rochon, Jason B.Lafayette, LAAttorneyIndefinite
from
September 9, 2002
Voccola, EdwardHingham, MAAttorneyIndefinite
from
October 18, 2002
April 14, 20037202003–15 I.R.B.

NameAddressDesignationDate of Suspension
Linn, Charles B.Croton-on-Hudson, NYAttorneyIndefinite
from
October 18, 2002
Lum, Eugene K.H.Long Beach, CAAttorneyIndefinite
from
October 18, 2002
Gwilliam, PeterLynn, MACPAIndefinite
from
October 28, 2002
Herlehy, Jon L.McHenry, ILCPAIndefinite
from
October 28, 2002
Herndon, HenryPikeville, NCCPAIndefinite
from
November 1, 2002
McCurry, ToddDurham, NCAttorneyIndefinite
from
November 25, 2002
Adams, James L.Breckenridge, COAttorneyIndefinite
from
November 25, 2002
Cloer, StewartPlano, TXAttorneyIndefinite
from
December 13, 2002
Caruso, RobertSaddle River, NJCPAIndefinite
from
December 16, 2002
Duru, Ike E.Atlanta, GAAttorneyIndefinite
from
January 10, 2003
Pelletier, Richard A.Bolton, CTCPAIndefinite
from
January 10, 2003
Austin, JackSteamboat Springs, COCPAIndefinite
from
January 10, 2003
Gibson, Brian M.Monroe, NYAttorneyIndefinite
from
January 10, 2003
2003–15 I.R.B.721April 14, 2003

NameAddressDesignationDate of Suspension
Jackson, RobertMt. Juliet, TNAttorneyIndefinite
from
January 10, 2003
Tenzer, James L.East Meadow, NYAttorneyIndefinite
from
February 4, 2003
Resignations of Enrolled Agents
Under Title 31, Code of Federal Regu-
lations, Part 10, an enrolled agent, in or-
der to avoid the institution or conclusion of
a proceeding for his or her disbarment or
suspension from practice before the Inter-
nal Revenue Service, may offer his or her
resignation as an enrolled agent. The Di-
rector, Office of Professional Responsibil-
ity, in his discretion, may accept the offered
resignation.
The Director, Office of Professional Re-
sponsibility, has accepted offers of resig-
nation as an enrolled agent from the
following individuals:
NameAddressDate of Resignation
Korman, LindaLas Vegas, NVJanuary 23, 2003
New Revision of Publication
538,Accounting Periods and
Methods
Announcement 2003–17
Publication 538, revised March 2003, is
now available from the Internal Revenue
Service. It replaces the April 2001 revi-
sion.
This publication provides information on
how to determine the appropriate account-
ing period and accounting method for your
business. It also provides information on
how to change your accounting period and
accounting method.
You can get a copy of this publication
by calling 1–800–TA X–FORM (1–800–
829–3676) or by writing to the IRS Forms
Distribution Center nearest you. Check your
income tax package for the address. The
publication is also available on the IRS In-
ternet web site atwww.irs.gov.
April 14, 20037222003–15 I.R.B.

Announcement and Report Concerning Advance Pricing Agreements
Announcement 2003–19
March 31, 2003
This Announcement is issued pursuant to§521(b) of Pub. L. 106–170, the Ticket to Work and Work Incentives Improvement Act
of 1999, requiring that the Secretary of the Treasury annually report to the public concerning Advance Pricing Agreements (APAs)
and the APA Program. The first report covered calendar years 1991 through 1999. Subsequent reports covered calendar years 2000
and 2001. This fourth report describes the experience of the APA Program during calendar year 2002 consistent with the mandate
of§521(b). This document does not provide guidance regarding the application of the arm’s length standard; rather, it reports on
the structure and activities of the APA program.
Mindy Piatoff
Acting Director, Advance Pricing Agreement Program
Background
Internal Revenue Code (IRC)§482 provides that the Secretary may distribute, apportion, or allocate gross income, deductions, cred-
its, or allowances between or among two or more commonly controlled businesses if necessary to reflect clearly the income of such
businesses. Under the regulations, the standard to be applied in determining the true taxable income of a controlled business is that
of a business dealing at arm’s length with an unrelated business. The arm’s length standard also has been adopted by the interna-
tional community and is incorporated into the transfer pricing guidelines issued by the Organization for Economic Cooperation and
Development (OECD). OECD, TRANSFER PRICING GUIDELINES FOR MULTINATIONAL ENTERPRISES AND TAX AD-
MINISTRATORS (1995). Transfer pricing issues by their nature are highly factual and have traditionally been one of the largest
issues identified by the IRS in its audits of multinational corporations. The APA Program is designed to resolve actual or potential
transfer pricing disputes in a principled, cooperative manner, as an alternative to the traditional examination process. An APA is a
binding contract between the IRS and a taxpayer by which the IRS agrees not to seek a transfer pricing adjustment under IRC§482
for a covered transaction if the taxpayer files its tax return for a covered year consistent with the agreed transfer pricing method
(TPM). In year 2002, the IRS and taxpayers executed 85 APAs and amended 9 APAs.
Since 1991, with the issuance of Rev. Proc. 91–22, 1991–1 C.B. 526, the IRS has offered taxpayers through the APA Program the
opportunity to reach an agreement in advance of filing a tax return on the appropriate TPM to be applied to related party transac-
tions. In 1996, the IRS issued internal procedures for processing APA requests. Chief Counsel Directives Manual (CCDM),¶¶42.10.10
–42.10.16 (November 15, 1996). Also in 1996, the IRS updated Rev. Proc. 91–22 with the release of Rev. Proc. 96–53, 1996–2
C.B. 375. The APA Program continues to operate under the provisions of Rev. Proc. 96–53, which provides taxpayers with instruc-
tions of how to apply for an APA, and what to expect in the processing of the case. In addition, in 1998, the IRS published Notice
98–65, 1998–2 C.B. 803, which set forth streamlined APA procedures for Small Business Taxpayers (SBTs). That Notice also ex-
panded the availability of the lowest APA user fee in an effort to attract taxpayers who may not have the resources to do the so-
phisticated economic studies normally required in APA submissions.
Advance Pricing Agreements
An APA generally combines an agreement between a taxpayer and the IRS on an appropriate TPM for the transactions at issue (Cov-
ered Transactions) with an agreement between the U.S. and one or more foreign tax authorities (under the authority of the mutual
agreement process of our income tax treaties) that the TPM is correct. With such a“bilateral”APA, the taxpayer ordinarily is as-
sured that the income associated with the Covered Transactions will not be subject to double taxation by the IRS and the foreign
tax authority. It is the policy of the United States, as reflected in§7 of Rev. Proc. 96–53 to encourage taxpayers that enter the APA
program to seek bilateral or multilateral APAs when competent authority procedures are available with respect to the foreign coun-
try or countries involved. However, the IRS may execute an APA with a taxpayer without reaching a competent authority agree-
ment (a“unilateral”APA).
A unilateral APA is an agreement between a taxpayer and the IRS establishing an approved TPM for U.S. tax purposes. A unilat-
eral APA binds the taxpayer and the IRS, but obviously does not prevent foreign tax administrations from taking different posi-
tions on the appropriate TPM for a transaction. As stated in Rev. Proc. 96–53, should a transaction covered by a unilateral APA be
subject to double taxation as the result of an adjustment by a foreign tax administration, the taxpayer may seek relief by request-
ing that the U.S. Competent Authority consider initiating a mutual agreement proceeding, provided there is an applicable income
tax treaty in force with the other country.
When a unilateral APA involves taxpayers operating in a country that is a treaty partner, information relevant to the APA (includ-
ing a copy of the APA and APA annual reports) may be provided to the treaty partner under normal rules and principles governing
the exchange of information under income tax treaties.
2003–15 I.R.B.723April 14, 2003

The APA Program
APAs are negotiated with the taxpayer by an IRS team headed by an APA team leader. As of December 31, 2002, the APA pro-
gram had 17 team leaders. The team leader is responsible for organizing the IRS APA team. The IRS APA team arranges meetings
with the taxpayer, secures whatever information is necessary from the taxpayer to analyze the taxpayer’s related party transactions
and the available facts under the arm’s length standard of IRC§482 and the regulations thereunder (Treas. Reg.), and negotiates
with the taxpayer.
The APA team generally includes an economist, an international examiner, LMSB field counsel, and, in a bilateral case, a U.S. Com-
petent Authority analyst who leads the discussions with the treaty partner. The economist may be from the APA Program or the IRS
field organization. As of December 31, 2002, the APA Program had 7 economists. The APA team may also include an LMSB In-
ternational Technical Advisor, other LMSB exam personnel, and an Appeals officer.
The APA Process
The APA process is voluntary. Taxpayers submit an application for an APA, together with a user fee as set forth in Rev. Proc. 96–
53. The APA process can be broken into five phases: (1) application; (2) due diligence; (3) analysis; (4) discussion and agreement;
and (5) drafting, review, and execution.
(1)Application
In many APA cases, the taxpayer’s application is preceded by a pre-file conference with the APA staff in which the taxpayer can
solicit the informal views of the APA Program. Pre-file conferences can occur on an anonymous basis, although a taxpayer must
disclose its identity when it applies for an APA. Taxpayers must file the appropriate user fee on or before the due date of the tax
return for the first taxable year that the taxpayer proposes to be covered by the APA. Many taxpayers file a user fee first and then
follow up with a full application later. The procedures for pre-file conferences, user fees, and delayed applications can be found in
Rev. Proc. 96–53.
The APA application can be a relatively modest document for a small business taxpayer. Notice 98–65 describes the special APA
procedures for small businesses. For most taxpayers, however, the APA application is a substantial document filling several bind-
ers. The APA Program makes every effort to reach agreement on the basis of the information provided in the taxpayer’s applica-
tion.
The application is assigned to an APA team leader who is responsible for the case. The APA team leader’s first responsibility is to
organize the APA team. This involves contacting the appropriate LMSB International Territory Manager to secure the assignment
of an international examiner to the APA case and the LMSB Counsel’s office to secure a field counsel lawyer. In a bilateral case,
the U.S. Competent Authority will assign a U.S. Competent Authority analyst to the team. In a large APA case, the international
examiner may invite his or her manager and other LMSB personnel familiar with the taxpayer to join the team. When the APA may
affect taxable years in Appeals, the appropriate appellate conferee will be invited to join the team. In all cases, the team leader con-
tacts the Manager, LMSB International Technical Advisors, to determine whether to include a technical advisor on the team. The
IRS APA team will generally include a technical advisor if the APA request concerns cost-sharing, intangibles or services. The APA
team leader then distributes copies of the APA application to all team members and sets up an opening conference with the tax-
payer. The APA office strives to hold this opening conference within 45 days of the assignment of the case to a team leader. At the
opening conference, the APA team leader proposes a case plan designed to complete the recommended U.S. negotiating position
for a bilateral APA within 9 months from the date the full application was filed and to complete a unilateral APA within 12 months
from the application date. In 2002, the median for completing negotiating positions was 12.0 months (average 13.7), and the me-
dian for completing unilateral APAs was 15.9 months (average 20.2).
(2)Due Diligence
The APA team must satisfy itself that the relevant facts submitted by the taxpayer are complete and accurate. This due diligence
aspect of the APA is vital to the process. It is because of this due diligence that the IRS can reach advance agreements with tax-
payers in the highly factual setting of transfer pricing. Due diligence can proceed in a number of ways. Typically, the taxpayer and
the APA team will agree to dates for future meetings during the opening conference. In advance of the opening conference, the APA
team leader will submit a list of questions to the taxpayer for discussion. The opening conference may result in a second set of ques-
tions. These questions are developed by the APA team and provided to the taxpayer through the APA team leader. It is important
to note that this due diligence is not an audit and is focused on the transfer pricing issues associated with the transactions in the
taxpayer’s application, or such other transactions that the taxpayer and the IRS may agree to add.
(3)Analysis
A significant part of the analytical work associated with an APA is done typically by the APA or IRS field economist assigned to
the case. The analysis may result in the need for additional information. Once the IRS APA team has completed its due diligence
April 14, 20037242003–15 I.R.B.

and analysis, it begins negotiations with the taxpayer over the various aspects of the APA including the selection of comparable trans-
actions, asset intensity and other adjustments, the TPM, which transactions to cover, the appropriate critical assumptions, the APA
term, and other key issues. The APA team leader will discuss particularly difficult issues with his or her managers, but generally
the APA team leader is empowered to negotiate the APA.
(4)Discussion and Agreement
This phase differs for bilateral and unilateral cases. In a bilateral case, the discussions proceed in two parts and involve two IRS
offices—the APA Program and the U.S. Competent Authority. In the first part, the APA team will attempt to reach a consensus
with the taxpayer regarding the recommended position that the U.S. Competent Authority should take in negotiations with its treaty
partner. This recommended U.S. negotiating position is a paper drafted by the APA team leader and signed by the APA Director that
provides the APA Program’s view of the best TPM for the covered transaction, taking into account IRC§482 and the regulations
thereunder, the relevant tax treaty, and the U.S. Competent Authority’s experience with the treaty partner.
The experience of the APA office and the U.S. Competent Authority is that APA negotiations are likely to proceed more rapidly with
a foreign competent authority if the taxpayer fully supports the U.S. negotiating position. Consequently, the APA Office works to-
gether with the taxpayer in developing the recommended U.S. negotiating position. On occasion, the APA team will agree to dis-
agree with a taxpayer. In these cases, the APA office will send a recommended U.S. negotiating position to the U.S. Competent Authority
that includes elements with which the taxpayer does not agree. This disagreement is noted in the paper. The APA team leader also
solicits the views of the field members of the APA team, and, in the vast majority of APA cases, the international examiner, LMSB
field counsel, and other IRS field team members concur in the position prepared by the APA team leader.
Once the APA Program completes the recommended U.S. negotiating position, the APA process shifts from the APA Program to the
U.S. Competent Authority. The U.S. Competent Authority analyst assigned to the APA takes the recommended U.S. negotiating po-
sition and prepares the final U.S. negotiating position, which is then transmitted to the foreign competent authority. The negotia-
tions with the foreign competent authority are conducted by the U.S. Competent Authority analyst, most often in face-to-face negotiating
sessions conducted periodically throughout the year. At the request of the U.S. Competent Authority analyst, the APA team leader
may continue to assist the negotiations.
In unilateral APA cases, the discussions proceed solely between the APA Program and the taxpayer. In a unilateral case, the tax-
payer and the APA Program must reach agreement to conclude an APA. Like the bilateral cases, the APA team leader almost al-
ways will achieve a consensus with the IRS field personnel assigned to the APA team regarding the final APA. The APA Program
has a procedure in which the IRS field personnel are solicited formally for their concurrence in the final APA. This concurrence,
or any items in disagreement, is noted in a cover memorandum prepared by the APA team leader that accompanies the final APA
sent forward for review and execution.
(5)Drafting, Review, and Execution
Once the IRS and the taxpayer reach agreement, the drafting of the final APA generally takes little time because the APA Program
has developed standard language that is incorporated into every APA. The current version of this language is found in Attachment
A. APAs are reviewed by the Branch Chief and the APA Director. In addition, the team leader prepares a summary memorandum
for the Associate Chief Counsel (International) (ACC(I)). On March 1, 2001, the ACC(I) delegated to the APA Director the author-
ity to execute APAs on behalf of the IRS.SeeChief Counsel Notice CC–2001–016. The APA is executed for the taxpayer by an
appropriate corporate officer.
Model APA at Attachment A
[§521(b)(2)(B)]
Attachment A contains the current version of the model APA language. As part of its continuing effort to improve its work prod-
uct, the APA Program has revised the model language to reflect the program’s collective experience with substantive and drafting
issues.
The Current APA Office Structure, Composition, and Operation
In 2002, the APA Office consisted of four branches with Branches 1 and 3 staffed with APA team leaders and Branch 2 staffed with
economists and a paralegal.
1
Branch 4, the APA West Coast branch, opened an additional office in Laguna Niguel and moved its
headquarters there. Its staffing is indicated in the chart below.
1
Branch 3 includes one team leader with the principal responsibility for annual report review and Branch 2 includes one economist who spends approximately 35% of his time reviewing annual reports.
2003–15 I.R.B.725April 14, 2003

Overall, the APA staff decreased from 38 to 34 as a result of attrition and transfers to other Chief Counsel functions. The number
of APA team leaders decreased from 22 to 17, while the number of economists remained constant at 7. Despite the decrease in the
number of APA team leaders, the combination of the APA Program’s extensive training and smaller caseloads per APA team leader
increased productivity and the currency of the APA inventory.
As of December 31, 2002, the APA staff was as follows:
Director’s Office
1 Acting Director (also Chief, Branch 1)
1 Special Counsel to the Director
1 Secretary to the Director
Branch 1
1 Branch Chief
1 Secretary
8 Team Leaders
Branch 2
1 Branch Chief
1 Paralegal
7 Economists
Branch 3
1 Branch Chief
1 Secretary
7 Team Leaders
Branch 4
1 Branch Chief
(Laguna Niguel)
1 Secretary
(San Francisco)
2 Team Leaders
(San Francisco)
APA Training
In 2002, the APA Office continued to emphasize training as a high priority, dedicating two half-days each month to full staff train-
ing sessions. These training sessions regarded APA-related current developments, new APA office practices and procedures, and in-
ternational tax law issues. Updated APA New Hire Training materials were published and provided to the APA staff, and to the public
through the APA internet site on the IRS Digital Daily (www.irs.gov).
APA Program Statistical Data
[§521(b)(2)(C) and (E)]
The statistical information required under§521(b)(2)(C) is contained in Tables 1 and 9 below; the information required under
§521(b)(2)(E) is contained in Tables 2 and 3 below:
Table 1: APA Applications, Executed APAs, and Pending APAs
UnilateralBilateralMultilateral
Year
Total
Cumulative
Total
APA applications filed during
year 2002
5057107676
APAs executed
•Year 2002
•1991–2001
27
179
58
2
1637
85
349
434
APA renewals executed during
year 2002
9122191
Revised or Amended APAs
executed during year 2002
3
72921
Pending requests for APAs48155203
Pending requests
for new APAs
39111150
Pending requests for
renewal APAs
94453
APAs canceled or revoked
4
0005
APAs withdrawn
5
7192680
2
2
Approximately half of the 58 bilateral APAs executed in 2002 regarded companies carrying on limited business activities. These APAs were negotiatedbased on a bilateral competent authority agreement that estab-
lished streamlined resolution guidelines.
3
In 2002, the APA Office and taxpayers agreed to amend nine APAs (seven unilateral and two bilateral). In six of these, the taxpayer reorganized its business. In three, the changes reflected technical corrections or
modifications to minor aspects of the APA.
4
In the history of the APA Program, five APAs have been canceled and no APAs have been revoked.
5
Reasons for withdrawals included jurisdictional issues, inventory corrections, taxpayer reorganizations, and changes in facts and circumstances.
April 14, 20037262003–15 I.R.B.

TABLE 2: MONTHS TO COMPLETE APAs
Months to Complete Advance Pricing Agreements in Year 2002
Combined Unilateral, Bilateral, Multilateral: Average25.0
Combined Unilateral, Bilateral, Multilateral: Median23.4
Unilateral NewUnilateral RenewalUnilateral Combined
Average21.0Average19.1Average20.2
Median15.9Median16.4Median15.9
Bilateral/Multilateral NewBilateral/Multilateral
Renewal
Bilateral/Multilateral
Combined
6
Average24.6Average36.7Average27.3
Median20.6Median34.4Median25.3
TABLE 3: APA COMPLETION TIME – MONTHS PER APA
7
MonthsNumber of
APAs
MonthsNumber of
APAs
MonthsNumber of
APAs
MonthsNumber of
APAs
1
1
21
4
41
0
61
0
2
0
22
0
42
1
62
1
3
1
23
4
43
0
63
2
4
2
24
0
44
0
64
0
5
5
25
3
45
1
65
0
6
4
26
2
46
1
66
0
7
5
27
1
47
1
67
0
8
5
28
3
48
0
68
0
9
1
29
3
49
1
69
0
10
3
30
0
50
1
70
0
11
1
31
0
51
1
71
0
12
1
32
1
52
0
72
0
13
0
33
0
53
0
73
1
14
2
34
3
54
0
74
0
15
0
35
1
55
0
75
0
16
2
36
2
56
3
76
0
17
0
37
2
57
0
77
0
18
1
38
1
58
0
78
1
19
0
39
1
59
0
79
0
20
4
40
1
60
0
80
0
TABLE 4: RECOMMENDED NEGOTIATING POSITIONS
Recommended Negotiating Positions Completed in Year 200285
6
The average time required to conclude a bilateral APA has historically been split roughly equally between the APA and U.S. Competent Authority Offices.
7
Most of the APAs completed in six months or less related to companies carrying on limited business activities. These APAs were negotiated based on a bilateral competent authority agree-
ment that established streamlined resolution guidelines.
2003–15 I.R.B.727April 14, 2003

TABLE 5: MONTHS TO COMPLETE RECOMMENDED NEGOTIATING POSITIONS
NewRenewalCombined
Average12.3Average18.2Average13.7
Median11.5Median21.0Median12.0
TABLE 6: RECOMMENDED NEGOTIATING POSITIONS COMPLETION TIME–
MONTHS PER APA
8
MonthsNumberMonthsNumberMonthsNumberMonthsNumber
1
0
11
2
21
4
31
1
2
2
12
7
22
2
32
0
3
2
13
4
23
2
33
0
4
1
14
4
24
5
34
0
5
13
15
2
25
1
35
0
6
3
16
0
26
0
36
0
7
3
17
0
27
1
37
1
8
4
18
6
28
2
38
0
9
5
19
4
29
0
39
0
10
2
20
1
30
1
40
0
TABLE 7: SMALL BUSINESS TAXPAYER APAs
9
Small Business Taxpayer APAs Completed in Year 20026
Renewals3
New3
Unilateral5
Bilateral1
TABLE 8: MONTHS TO COMPLETE SMALL BUSINESS TAXPAYER APAs
NewRenewalCombined
Average12.2Average8.1Average10.2
Median8.4Median6.5Median7.7
8
A large number of the negotiating positions completed in six months or less related to companies carrying on limited business activities. These negotiating positions were associated with
a bilateral competent authority agreement that established streamlined resolution guidelines.
9
Small Business Taxpayer APAs are processed under the special procedures set forth in Notice 98–65.
April 14, 20037282003–15 I.R.B.

TABLE 9: INDUSTRIES COVERED
Industry Involved–NAICS Codes
10
Number
Computer and electronic product manufacturing–33419–21
Electronic equipment, appliance and component manufacturing–33516–18
Miscellaneous manufacturing–3397–9
Transportation equipment manufacturing–3367–9
Apparel manufacturing–3154–6
Wholesale trade, durable goods–4214–6
Wholesale trade, nondurable goods–4224–6
Machinery manufacturing–3331–3
Clothing and clothing accessories stores–4481–3
Motor vehicle and parts dealers–4411–3
Air transportation–4811–3
Mining (except oil and gas)–2111–3
Food manufacturing–3111–3
Beverage and tobacco manufacturing–3121–3
Paper manufacturing–3221–3
Chemical manufacturing–3251–3
Nonmetallic mineral product manufacturing–3271–3
Primary metal manufacturing–3311–3
Food and beverage stores–4451–3
Sporting goods, hobby, book and music stores–4511–3
Broadcasting and telecommunications–5131–3
Securities, commodity contracts and other intermediary and related activities–5231–3
Publishing industries–5111–3
Trades or Businesses
[§521(b)(2)(D)(i)]
The nature of the relationships between the related organizations, trades, or businesses covered by APAs executed in Year 2002 is
set forth in Table 10 below:
TABLE 10: NATURE OF RELATIONSHIPS BETWEEN RELATED ENTITIES
RelationshipNumber of APAs
Foreign Parent–U.S. Subsidiary (-ies)49
U.S. Parent–Foreign Subsidiary (-ies)33
Partnership2
Other1
Covered Transactions
[§521(b)(2)(D)(ii)]
The controlled transactions covered by APAs executed in Year 2002 are set forth in Table 11 and Table 12 below:
10
The categories in this table are drawn from the North American Industry Classification System (NAICS), which has replaced the U.S. Standard Industrial Classification (SIC) system.
NAICS was developed jointly by the U.S., Canada, and Mexico to provide new comparability in statistics about business activity across North America.
2003–15 I.R.B.729April 14, 2003

TABLE 11: TYPES OF COVERED TRANSACTIONS
Transaction TypeNumber
Sale of tangible property into the US37
Performance of services by Non-US entity35
Performance of services by US entity26
Sale of tangible property from the US18
Use of intangible property by Non-US entity11
Use of intangible property by US entity5
Other6
TABLE 12: TYPES OF SERVICES INCLUDED IN COVERED TRANSACTIONS
Intercompany Services Involved in the Covered TransactionsNumber
Manufacturing services
11
30
Distribution13
Technical support services12
Sales support10
Logistical support9
Administrative9
Marketing9
Product support8
Management7
Research and development6
Accounting5
Contract research & development4
Testing and installation services4
Warranty services4
Headquarters costs4
Assembly3
Communication service3
Legal3
Repair3
Billing services2
Purchasing2
Business Functions Performed and Risks Assumed
[§521(b)(2)(D)(ii)]
The general descriptions of the business functions performed and risks assumed by the organizations, trades, or businesses whose
results are tested in the covered transactions in the APAs executed in Year 2002 are set forth in Tables 13 and 14 below:
11
Business activities addressed by a bilateral competent authority agreement that established streamlined guidelines for resolution.
April 14, 20037302003–15 I.R.B.

TABLE 13: FUNCTIONS PERFORMED BY THE TESTED PARTY
Functions performedNumber
Distribution functions55
Product assembly and/or packaging52
Marketing functions40
Managerial, legal, accounting, finance, personnel, and other support services37
Manufacturing35
Product testing and quality control27
Technical training and tech support for sales staff (including sub-distributors)26
Purchasing and materials management24
Transportation and warehousing23
Research and development22
Product service (repairs, etc.)21
Product design and engineering18
Licensing of intangibles13
Process engineering10
Consulting services10
Customer service2
Mining and extraction2
TABLE 14: RISKS ASSUMED BY THE TESTED PARTY
Risks AssumedNumber
Market risks, including fluctuations in costs, demand, pricing, & inventory63
General business risks (e.g., related to ownership of PP&E)62
Credit and collection risks45
Financial risks, including interest rates & currency38
Product liability risks19
R&D risks18
Discussion
The vast majority of APAs have covered transactions that involve numerous business functions and risks. For instance, with re-
spect to functions, companies that manufacture products have typically conducted research and development, engaged in product
design and engineering, manufactured the product, marketed and distributed the product, and performed support functions such as
legal, finance, and human resources services. Regarding risks, companies have been subject to market risks, R&D risks, financial
risks, credit and collection risks, product liability risks, and general business risks. In the APA evaluation process a significant amount
of time and effort is devoted to understanding how the functions and risks are allocated amongst the controlled group of compa-
nies that are party to the covered transactions.
In its APA submission, the taxpayer must provide a functional analysis. The functional analysis identifies the economic activities
performed, the assets employed, the economic costs incurred, and the risks assumed by each of the controlled parties. The impor-
tance of the functional analysis derives from the fact that economic theory posits that there is a positive relationship between risk
and expected return and that different functions provide different value and have different opportunity costs associated with them.
It is important that the functional analysis go beyond simply categorizing the tested party as, say, a distributor. It should provide
more specific information since, in the example of distributors, not all distributors undertake similar functions and risks.
Thus, the functional analysis is critical in determining the TPM (including the selection of comparables). Although functional com-
parability is an essential factor in evaluating the reliability of the TPM (including the selection of comparables), the APA evalua-
tion process also involves consideration of economic conditions such as the economic condition of the particular industry.
In evaluating the functional analysis, the APA program considers contractual terms between the controlled parties and the consis-
tency of the conduct of the parties with respect to the allocation of risk. In accord with the section 482 regulations, the APA pro-
gram also gives consideration to the ability of controlled parties to fund losses that might be expected to occur as the result of the
2003–15 I.R.B.731April 14, 2003

assumption of risk. Another relevant factor considered in evaluating the functional analysis is the extent to which each controlled
party exercises managerial or operational control over the business activities that directly influence the amount of income or loss
realized. The section 482 regulations posit that parties at arm’s length will ordinarily bear a greater share of those risks over which
they have relatively more control.
Related Organizations, Trades, or Businesses Whose Prices
or Results are Tested to Determine Compliance with APA Transfer Pricing Methods
[§521(b)(2)(D)(iii)]
The related organizations, trades, or businesses whose prices or results are tested to determine compliance with TPMs prescribed
in APAs executed in Year 2002 are set forth in Table 15 below:
TABLE 15: RELATED ORGANIZATIONS, TRADES,
OR BUSINESSES WHOSE PRICES OR RESULTS ARE TESTED
Type of OrganizationNumber
Non-US provider of services34
Multiple tested parties
12
30
US distributor26
US provider of services21
US manufacturer11
Non-US distributor5
Non-US manufacturer2
Non-US licensee of intangible property2
Other7
Transfer Pricing Methods and the Circumstances Leading to the Use of Those Methods
[§521(b)(2)(D)(iv)]
The TPMs used in APAs executed in Year 2002 are set forth in Tables 16–20 below:
TABLE 16: TRANSFER PRICING METHODS USED FOR
TRANSFERS OF TANGIBLE AND INTANGIBLE PROPERTY
TPM usedNumber
13
Residual profit split14
CPM: PLI is operating margin10
CPM: PLI is Berry Ratio10
CUT (intangibles only)8
Resale Price Method (tangibles only)8
CPM: PLI is markup on total costs6
Unspecified method6
CPM: PLI is Gross margin5
Cost Plus Method (tangibles only)5
CPM: PLI is other4
CUP (tangibles only)–based on published market data3
CUP (tangibles only)–not based on published market data2
Other3
12
“Multiple tested parties”includes covered transactions that utilize profit splits, CUPs, and CUTs.
13
Profit Level Indicators (“PLIs”) used with the Comparable Profit Method of Treas. Reg.§1.482–5, and as used in these TPM tables, are as follows: (1) operating margin (ratio of op-
erating profit to sales); (2) Berry ratio (gross profit to operating expenses); (3) markup on total costs (comparative markup on total costs); and (4)gross margin (ratio of gross profit to
sales).
April 14, 20037322003–15 I.R.B.

TABLE 17: TRANSFER PRICING METHODS USED FOR SERVICES
TPM usedNumber
Cost plus a markup37
Cost with no markup9
CPM: PLI is markup on total costs7
CPM: PLI is other4
CPM: PLI is Berry Ratio2
CPM: PLI is operating margin2
Other5
Discussion
The TPMs used in APAs completed during Year 2002 were based on the section 482 regulations. Under Treas. Reg.§1.482–3, the
arm’s length amount for controlled transfers of tangible property may be determined using the Comparable Uncontrolled Price (CUP)
method, the Resale Price Method, the Cost Plus Method, the Comparable Profits Method (CPM), or the Profit Split method. Under
Treas. Reg.§1.482–4, the arm’s length amount for controlled transfers of intangible property may be determined using the Com-
parable Uncontrolled Transaction (CUT) method, CPM, or the Profit Split Method. An“Unspecified Method”may be used for both
tangible and intangible property if it provides a more reliable result than the enumerated methods under the best method rule of Treas.
Reg.§1.482–1(c). For transfers involving the provision of services, Treas. Reg.§1.482–2(b) provides that services performed for
the benefit of another member of a controlled group should bear an arm’s length charge, either deemed to be equal to the cost of
providing the services (when non-integral) or which should be an amount that would have been charged between independent par-
ties.
In addition, Treas. Reg.§1.482–2(a) provides rules concerning the proper treatment of loans or advances, and Treas. Reg.§1.482–7
provides rules for qualified cost sharing arrangements under which the parties agree to share the costs of development of intan-
gibles in proportion to their shares of reasonably anticipated benefits. APAs involving cost sharing arrangements generally address
both the method of allocating costs among the parties as well as determining the appropriate amount of the“buy-in”payment due
for the transfer of intangibles to the controlled participants.
In reviewing the TPMs applicable to transfers of tangible and intangible property reflected in Table 16, the majority of the APAs
followed the specified methods. However, there are several distinguishing points that should be made. The Regulations note that
for transfers of tangible property, the Comparable Uncontrolled Price (CUP) method will generally be the most direct and reliable
measure of an arm’s length price for the controlled transaction if sufficiently reliable comparable transactions can be identified. Treas.
Reg.§1.482–3(b)(2)(ii)(A). It was the experience of the APA Program in Year 2002 that in the cases that come into the APA Pro-
gram, sufficiently reliable CUP transactions are difficult to find. In APAs executed in Year 2002, there were five covered transac-
tions that used the CUP method; three looked to published market data and two used internal data on transactions between the taxpayer
and unrelated parties.
Similar to the CUP method, for transfers of intangible property, the CUT method will generally provide the most reliable measure
of an arm’s length result if sufficiently reliable comparables may be found. Treas. Reg.§1.482–4(c)(2)(ii). It has generally been
difficult to identify external comparables, and APAs using the CUT method tend to rely on internal transactions between the tax-
payer and unrelated parties. In Year 2002, there were eight covered transactions that utilized the CUT TPM.
The Cost Plus Method (tangibles only) and Resale Price Method were applied in Year 2002 in five and eight APAs respectively.
See Treas. Reg.§1.482–3(c), (d).
The CPM is frequently applied in APAs. This is because reliable public data on comparable business activities of independent com-
panies may be more readily available than potential CUP data, and comparability of resources employed, functions, risks, and other
relevant considerations is more likely to exist than comparability of product. The CPM also tends to be less sensitive than other meth-
ods to differences in accounting practices between the tested party and comparable companies,e.g., classification of expenses as
cost of goods sold or operating expenses. Treas. Reg.§1.482–3(c)(3)(iii)(B), and–3(d)(3)(iii)(B). In addition, the degree of func-
tional comparability required to obtain a reliable result under the CPM is generally less than required under the Resale Price or Cost
Plus methods, because differences in functions performed often are reflected in operating expenses, and thus taxpayers performing
different functions may have very different gross profit margins but earn similar levels of operating profit. Treas. Reg.§1.482–
5(c)(2).
Table 16 reflects 35 uses of the CPM (with varying PLIs) in covered transactions involving tangible or intangible property. The CPM
was also used in some APAs concurrently with other methods.
2003–15 I.R.B.733April 14, 2003

The CPM has proven to be versatile in part because of the various PLIs that can be used in connection with the method. Reaching
agreement on the appropriate PLI has been the subject of much discussion in many of the cases, and it depends heavily on the facts
and circumstances. Some APAs have called for different PLIs to apply to different parts of the covered transactions or with one PLI
used as a check against the primary PLI.
The CPM also was used regularly with services as the covered transactions in APAs executed in Year 2002. There were a total of
fifteen services covered transactions using the CPM method with various PLIs according to the specific facts of the taxpayers in-
volved. Table 17 reflects the methods used to determine the arm’s length results for APAs involving services transactions.
In Year 2002, there were fourteen APAs involving tangible or intangible property that used the residual profit split, Treas. Reg.§1.482–
6(c)(3). In residual profit split cases, routine contributions by the controlled parties are allocated routine market returns, and the re-
sidual income is allocated among the controlled taxpayers based upon the relative value of their contributions of intangible property
to the relevant business activity.
Critical Assumptions
[§521(b)(2)(D)(v)]
Critical Assumptions used in APAs executed in Year 2002 are described in Table 18 below:
TABLE 18: CRITICAL ASSUMPTIONS
Critical Assumptions involving the following:Number of APAs
Material changes to the business84
Material changes to tax and/or financial accounting practices83
Assets will remain substantially same31
Consistency requirements, etc., for manufacturing services30
Catastrophic events11
Changes in affiliated companies5
Major regulatory changes5
Other financial ratio5
Major contract remains in force5
Material sales fluctuations4
Marketing conditions substantially same3
Currency fluctuations2
Changes in other duties or tariffs2
New import/export non-tariff barriers2
Other7
Discussion
APAs include critical assumptions upon which their respective TPMs depend. A critical assumption is any fact (whether or not within
the control of the taxpayer) related to the taxpayer, a third party, an industry, or business and economic conditions, the continued
existence of which is material to the taxpayer’s proposed TPM. Critical assumptions might include, for example, a particular mode
of conducting business operations, a particular corporate or business structure, or a range of expected business volume. Rev. Proc.
96–53,§5.07. Failure to meet a critical assumption may render an APA inappropriate or unworkable.
A critical assumption may change (and/or fail to materialize) due to uncontrollable changes in economic circumstances, such as a
fundamental and dramatic change in the economic conditions of a particular industry. In addition, a critical assumption may change
(and/or fail to materialize) due to a taxpayer’s actions that are initiated for good faith business reasons, such as a change in busi-
ness strategy, mode of conducting operations, or the cessation or transfer of a business segment or entity covered by the APA.
If a critical assumption has not been met, the APA may be revised by agreement of the parties. If such agreement cannot be achieved,
the APA may be canceled. If a critical assumption has not been met, it requires taxpayer’s notice to and discussion with the Ser-
vice, and, in the case of a bilateral APA, competent authority consideration. Rev. Proc. 96–53,§11.07.
April 14, 20037342003–15 I.R.B.

Sources of Comparables, Selection Criteria, and the Nature of Adjustments
to Comparables and Tested Parties
[§521(b)(2)(D)(v), (vi), and (vii)]
The sources of comparables, selection criteria, and rationale used in determining the selection criteria for APAs executed in Year
2002 are described in Tables 19 through 21 below. Various formulas for making adjustments to comparables are included as At-
tachment B.
TABLE 19: SOURCES OF COMPARABLES
Comparable SourcesNumber of Times
This Source Used
Compustat81
Disclosure50
Moody’s12
Trade publication5
Mergent2
Bureau Van Dijk’s JADE (Japan)2
Other9
TABLE 20: COMPARABLE SELECTION CRITERIA
Selection Criteria ConsideredNumber of Times
This
Criterion Used
Comparable functions90
Comparable risks65
Comparable industry64
Comparable products57
Comparable intangables27
Comparable contractual terms4
TABLE 21: ADJUSTMENTS TO COMPARABLES OR TESTED PARTIES
AdjustmentNumber of Times
This
Adjustment Used
Balance sheet adjustments—
Receivables40
Inventory38
Payables38
Property, plant, equipment12
Non-interest bearing liabilities2
Other3
Accounting adjustments—
LIFO to FIFO inventory accounting
14
51
Accounting reclassifications (e.g., from COGS to operating expenses)9
Depreciation5
Other2
14
The majority of these LIFO to FIFO inventory accounting adjustments regard business activities addressed by a bilateral competent authority agreement that established streamlined reso-
lution guidelines.
2003–15 I.R.B.735April 14, 2003

TABLE 21: ADJUSTMENTS TO COMPARABLES OR TESTED PARTIES—Continued
AdjustmentNumber of Times
This
Adjustment Used
Profit level indicator adjustments (used to“back into”one PLI from another)—
Operating expense2
Other2
Miscellaneous adjustments—
Goodwill value or amortization23
Foreign exchange10
Other8
Discussion
At the core of most APAs are comparables. The APA program works closely with taxpayers to find the best and most reliable com-
parables for each covered transaction. In some cases, CUPs or CUTs can be identified. In other cases, comparable business activi-
ties of independent companies are utilized in applying the CPM or residual profit split methods. Generally, in the APA Program’s
experience since 1991, CUPs and CUTs have been most often derived from the internal transactions of the taxpayer.
For profit-based methods in which comparable business activities or functions of independent companies are sought, the APA Pro-
gram typically has applied a three-part process. First, a pool of potential comparables has been identified through broad searches.
From this pool, companies having transactions that are clearly not comparable to those of the tested party have been eliminated through
the use of quantitative and qualitative analyses,i.e., quantitative screens and business descriptions. Then, based on a review of avail-
able descriptive and financial data, a set of comparable transactions or business activities of independent companies has been fi-
nalized. The comparability of the finalized set has then been enhanced through the application of adjustments.
Sources of Comparables
Comparables used in APAs can be U.S. or foreign. This depends on the relevant market, the type of transaction being evaluated,
and the results of the functional and risk analyses. In general, comparables have been located by searching a variety of databases
that provide data on U.S. publicly traded companies and on a combination of public and private non-U.S. companies. Table 19 shows
the various databases and other sources used in selecting comparables for the APAs executed in Year 2002.
Although comparables were most often identified from the databases cited in Table 19, in some cases comparables were found from
other sources, such as comparables derived internally from taxpayer transactions with third parties.
Selecting Comparables
Initial pools of potential comparables generally are derived from the databases using a combination of industry and keyword iden-
tifiers. Then, the pool is refined using a variety of selection criteria specific to the transaction or business activity being tested and
the TPM being used.
The listed databases allow for searches by industrial classification, by keywords, or by both. These searches can yield a number of
companies whose business activities may or may not be comparable to those of the entity being tested. Therefore, comparables based
solely on industry classification or keyword searches are rarely used in APAs. Instead, the pool of comparables is examined closely,
and companies are selected based on a combination of screens, business descriptions, and other information found in the compa-
nies’Annual Reports to shareholders and filings with the U.S. Securities and Exchange Commission (SEC).
Business activities are required to meet certain basic comparability criteria to be considered comparables. Functions, risks, eco-
nomic conditions, and the property (product or intangible) and services associated with the transaction must be comparable. Deter-
mining comparability can be difficult—the goal has been to use comparability criteria restrictive enough to eliminate business activities
that are not comparable, but yet not so restrictive as to have no comparables remaining. The APA Program normally has begun with
relatively strict comparability criteria and then has relaxed them slightly if necessary to derive a pool of reliable comparables. A
determination on the appropriate size of the comparables set, as well as the business activities that comprise the set, is highly fact
specific and depends on the reliability of the results.
April 14, 20037362003–15 I.R.B.

In addition, the APA Program, consistent with the section 482 regulations, generally has looked at the results of comparables over
a multi-year period. Sometimes this has been three years, but it has been more or less, depending on the circumstances of the con-
trolled transaction. Using a shorter period might result in the inclusion of comparables in different stages of economic develop-
ment or use of atypical years of a comparable subject to cyclical fluctuations in business conditions.
Many covered transactions have been tested with comparables that have been chosen using additional criteria and/or screens. These
include sales level criteria and tests for financial distress and product comparability. These common selection criteria and screens
have been used to increase the overall comparability of a group of companies and as a basis for further research. The sales level
screen, for example, has been used to remove companies that, due to their size, might face fundamentally different economic con-
ditions from those of the transaction or business activities being tested. In addition, APA analyses have incorporated selection cri-
teria related to removing companies experiencing“financial distress”due to concerns that companies in financial distress often have
experienced unusual circumstances that would render them not comparable to the business activity being tested. These criteria include:
an unfavorable auditor’s opinion, bankruptcy, and in certain circumstances, operating losses in a given number of years.
An additional important class of selection criteria is the development and ownership of intangible property. In some cases in which
the business activity being tested is a manufacturer, several criteria have been used to ensure, for example, that if the controlled en-
tity does not own significant manufacturing intangibles or conduct research and development (R&D), then neither will the compa-
rables. These selection criteria have included determining the importance of patents to a company or screening for R&D expenditures
as a percentage of sales. Again, quantitative screens related to identifying comparables with significant intangible property gener-
ally have been used in conjunction with an understanding of the comparable derived from publicly available business information.
Selection criteria relating to asset comparability and operating expense comparability have also been used at times. A screen of prop-
erty, plant, and equipment (PP&E) as a percentage of sales or assets, combined with a reading of a company’s SEC filings, has been
used to help ensure that distributors (generally lower PP&E) were not compared with manufacturers (generally higher PP&E), re-
gardless of their industry classification. Similarly, a test involving the ratio of operating expenses to sales has helped to determine
whether a company undertakes a significant marketing and distribution function.
Table 22 shows the number of times various screens were used in APAs executed in Year 2002:
TABLE 22: COMPARABILITY SCREENS
Comparability Screen UsedNumber of Times Used
Comparability screens used
—
Sales20
R&D/ sales18
Foreign sales/ total sales10
SG&A/ sales10
Non-startup or start-up4
PP&E/ sales4
PP&E/ total assets3
Operating expenses/ sales2
Financial distress
—
Losses in one or more years23
Bankruptcy22
Unfavorable auditor’s opinion12
Adjusting Comparables
After the comparables have been selected, the regulations require that“[i]f there are material differences between the controlled and
uncontrolled transactions, adjustments must be made if the effect of such differences on prices or profits can be ascertained with
sufficient accuracy to improve the reliability of the results.”Treas. Reg.§1.482–1(d)(2). In almost all cases involving income-
statement-based PLIs, certain“asset intensity”or“balance sheet”adjustments for factors that have generally agreed-upon effects
on profits are calculated. In addition, in specific cases, additional adjustments are performed to improve reliability.
The most common balance sheet adjustments used in APAs are adjustments for differences in accounts receivable, inventories, and
accounts payable. The APA Program generally has required adjustments for receivables, inventory, and payables based on the prin-
ciple that there is an opportunity cost for holding assets. For these assets it is generally assumed that the cost is a short-term debt
interest rate.
2003–15 I.R.B.737April 14, 2003

To compare the profits of two business activities with different relative levels of receivables, inventory, or payables, the APA Pro-
gram estimates the carrying costs of each item and adjusts profits accordingly. Although different formulas have been used in spe-
cific APA cases, Attachment B presents one set of formulas used in many APAs. Underlying these formulas are the notions that (1)
balance sheet items should be expressed as mid-year averages, (2) formulas should try to avoid using data items that are being tested
by the TPM (for example, if sales are controlled, then the denominator of the balance sheet ratio should not be sales), (3) a short-
term interest rate should be used, and (4) an interest factor should recognize the average holding period of the relevant asset.
The APA Program also requires that data be compared on a consistent accounting basis. For example, although financial state-
ments may be prepared on a first-in first-out (FIFO) basis, cross-company comparisons are less meaningful if one or more of the
comparables use LIFO inventory accounting methods. This adjustment directly affects costs of goods sold and inventories, and there-
fore affects both profitability measures and inventory adjustments.
Still important in some cases is the adjustment for differences in relative levels of PP&E between a tested business activity and the
comparables. Ideally, comparables and the business activity being tested will have fairly similar relative levels of PP&E, since ma-
jor differences can be a sign of fundamentally different functions and risks. Typically, the PP&E adjustment is made using a me-
dium term interest rate.
Additional adjustments used less frequently include those for differences in other balance sheet items, operating expenses, R&D,
or currency risk. Accounting adjustments, such as reclassifying items from cost of goods sold to operating expenses, for example,
are also made when warranted to increase reliability. Often, data is not available for both the controlled and uncontrolled transac-
tions in sufficient detail to allow for these types of adjustments.
The adjustments made to comparables or tested parties in APAs executed in Year 2002 are reflected in table 21 above.
Nature of Ranges and Adjustment Mechanisms
[§521(b)(2)(D)(viii)–(ix)]
The types of ranges and adjustment mechanisms used in APAs executed in Year 2002 are described in Table 23 and 24 below.
TABLE 23: TYPES OF RANGES
Type of RangeNumber
15
Interquartile range39
Specific point within CPM range10
Specific point (royalty)7
Floor (i.e., result must be no less than x)4
Specific point (CUP)2
Other10
TABLE 24: ADJUSTMENTS WHEN OUTSIDE OF THE RANGE
Adjustment mechanismNumber
Taxpayer makes an adjustment: to closest edge32
Taxpayer makes an adjustment: to specified point20
Taxpayer makes an adjustment: to median10
Other5
Discussion
Treas. Reg.§1.482–1(e)(1) states that sometimes a pricing method will yield“a single result that is the most reliable measure of
an arm’s length result.”Sometimes, however, a method may yield“a range of reliable results,”called the“arm’s length range.”A
taxpayer whose results fall within the arm’s length range will not be subject to adjustment.
Under Treas. Reg.§1.482–1(e)(2)(i), such a range is normally derived by considering a set of more than one comparable uncon-
trolled transaction of similar comparability and reliability. If these comparables are of very high quality, as defined in the Regula-
tions, then under Treas. Reg.§1.482–1(e)(2)(iii)(A), the arm’s length range includes the results of all of the comparables (from the
least to the greatest). However, the APA Program has only rarely identified cases meeting the requirements for the full range. If the
15
Numbers do not include TPMs with cost or cost-plus methodologies.
April 14, 20037382003–15 I.R.B.

comparables are of lesser quality, then under Treas. Reg.§1.482–1(e)(2)(iii)(B),“the reliability of the analysis must be increased,
when it is possible to do so, by adjusting the range through application of a valid statistical method to the results of all of the un-
controlled comparables.”One such method, the“interquartile range,”is ordinarily acceptable, although a different statistical method
“may be applied if it provides a more reliable measure.”The“interquartile range”is defined as, roughly, the range from the 25th
to the 75th percentile of the comparables’results. See Treas. Reg.§1.482–1(e)(2)(iii)(C). The interquartile range was used 39 times
in Year 2002.
Nineteen covered transactions reflected on Table 23 specified a single, specific result, or“point.”Ten of these covered transactions
involved a CPM in which the taxpayer agreed to a specific result. Some APAs specify not a point or a range, instead using a“floor”
that requires the tested party’s result be greater than or equal to some particular value. Four APAs executed in Year 2002 used a
floor.
Some APAs look to a tested party’s results over a period of years (multi-year averaging) to determine whether a taxpayer has com-
plied with the APA. In 2002, rolling multi-year averaging was used for twelve covered transactions. Eleven of those used three-
year averages, and the other one used a five-year average. Cumulative multi-year averages were used for two covered transactions.
Of those two transactions, one used a five-year average, and one used a seven-year average. Additionally, nine covered transac-
tions used term averages.
Adjustments
Under Treas. Reg.§1.482–1(e)(3), if a taxpayer’s results fall outside the arm’s length range, the Service may adjust the result“to
any point within the arm’s length range.”Accordingly, an APA may permit or require a taxpayer and its related parties to make an
adjustment after the year’s end to put the year’s results within the range, or at the point specified by the APA. Similarly, to enforce
the terms of an APA, the Service may make such an adjustment. When the APA specifies a range, the adjustment is sometimes to
the closest edge of the range, and sometimes to another point such as the median of the interquartile range. Depending on the facts
of each case, such automatic adjustments are not always permitted. APAs may specify that in such a case there will be a negotia-
tion between the competent authorities involved to determine whether and to what extent an adjustment should be made. APAs may
permit automatic adjustments unless the result is far outside the range specified in the APA. Thus APAs provide flexibility and ef-
ficiency, permitting adjustments when normal business fluctuations and uncertainties push the result somewhat outside the range.
In order to conform the taxpayer’s books to these tax adjustments, the APA usually permits a“compensating adjustment”as long
as certain requirements are met. Such compensating adjustments may be paid between the related parties with no interest, and the
amount transferred will not be considered for purposes of penalties for failure to pay estimated tax. See§11.02 Rev. Proc. 96–53.
APA Term Rollback Lengths
[§521(b)(2)(D)(x)]
The various term lengths for APAs executed in Year 2002 are set forth in Table 25 below:
TABLE 25: TERMS OF APAs
APA Term in YearsNumber of APAs
13
21
35
411
550
67
74
82
91
101
Number of rollback years to which an APA TPM was applied in Year 2002 is set forth in Table 26 below:
2003–15 I.R.B.739April 14, 2003

TABLE 26: NUMBER OF YEARS COVERED BY ROLLBACK OF APA TPM
Number of Rollback YearsNumber of APAs
11
23
35
42
5 or more4
Nature of Documentation Required
[§521(b)(2)(D)(xi)]
APAs executed in Year 2002 required that taxpayers provide various documents with their annual reports. These documents are de-
scribed in Table 27 below:
TABLE 27: NATURE OF DOCUMENTATION REQUIRED
DocumentationNumber of Times
This Documentation
Required
16
Description of, reason for, and financial analysis of, any Compensating Adjustments with
respect to APA Year, including means by which any Compensating Adjustment has been or
will be satisfied
85
Statement identifying all material differences between Taxpayer’s business operations during
APA Year and description of Taxpayer’s business operations contained in Taxpayer’s request
for APA, or if there have been no such material differences, a statement to that effect
84
Statement identifying all material changes in Taxpayer’s accounting methods and
classifications, and methods of estimation, from those described or used in Taxpayer’s
request for APA, or if there have been none, statement to that effect
84
Financial analysis demonstrating Taxpayer’s compliance with TPM84
Description of any failure to meet Critical Assumptions or, if there have been none, a
statement to that effect
84
Financial statements as prepared in accordance with US GAAP73
Certified public accountant’s opinion that financial statements present fairly financial position
of Taxpayer and the results of its operations, in accordance with US GAAP
73
Organizational chart60
Financial statements as prepared in accordance with a foreign GAAP30
Various work papers30
Certified public accountant’s opinion that financial statements present fairly financial position
of Taxpayer and the results of its operations, in accordance with a foreign GAAP
24
Book to tax reconciliations10
Certified public accountant’s review of financial statements4
United States income tax return3
Schedule of costs and expenses (e.g., intercompany allocations)3
Other23
16
The first seven categories of documentation listed in this table were drawn from the standard APA language used in 2002. The facts and circumstances ofsome APAs may eliminate the
need for some standard documentation requirements.
April 14, 20037402003–15 I.R.B.

Approaches for Sharing of Currency or Other Risks
[§521(b)(2)(D)(xii)]
During Year 2002, there were 38 tested parties that faced financial risks, including interest rate and currency risks. Eleven APAs
provide specific approaches for dealing with currency risk, including adjustment mechanisms and critical assumptions.
Efforts to Ensure Compliance with APAs
[§521(b)(2)(F)]
As described in Rev. Proc. 96–53, section 11, APA taxpayers are required to file annual reports to demonstrate compliance with the
terms and conditions of the APA. The filing and review of annual reports is a critical part of the APA process. Through annual re-
port review, the APA program monitors taxpayer compliance with the APA on a contemporaneous basis. Annual report review pro-
vides current information on the success or problems associated with the various TPMs adopted in the APA process.
All reports received by the APA Office are tracked by one designated APA team leader who also has the primary responsibility for
annual report review. One of the economists also spends a significant amount of time reviewing annual reports. Other APA team
leaders also assist in this review, especially when the team leader who negotiated the case is available, since that person will al-
ready be familiar with the relevant facts and terms of the agreement. Once received by the APA Office, the annual report is sent
out to the district personnel with exam jurisdiction over the taxpayer.
The statistics for the review of APA annual reports are reflected in Table 28 below. As of December 31, 2002, there were 101 pend-
ing annual reports. In Year 2002, there were 330 reports closed.
TABLE 28: STATISTICS OF ANNUAL REPORTS
Number of APA annual reports pending as of December 31, 2002101
Number of APA annual reports closed in Year 2002330
17
Number of APA annual reports requiring adjustment in Year 20025
Number of taxpayers involved in adjustments2
Number of APA annual reports required to be filed in Year 2002199
Number of APA annual reports actually filed in Year 2002189
Number of APA annual report cases over one year old37
17
This number differs from previously published figures because of annual reports closed but not yet entered on the system used to compile those statistics.
2003–15 I.R.B.741April 14, 2003

ATTACHMENT A
ADVANCE PRICING AGREEMENT
between
[Insert Taxpayer’s Name
]
and
THE INTERNAL REVENUE SERVICE
PARTIES
The Parties to this Advance Pricing Agreement (APA) are the Internal Revenue Service (IRS) and [Insert Taxpayer’s Name], EIN
_______ (Taxpayer).
RECITALS
Taxpayer’s principal place of business is [City, State]. [Insert general description of taxpayer and other relevant parties.]
This APA contains the Parties’agreement on the best method for determining arm’s-length prices of the Covered Transactions
under I.R.C. section 482, any applicable tax treaties, and the Treasury Regulations.
Unless otherwise specified, terms in the plural include the singular and vice versa. Appendix D contains definitions for capital-
ized terms not elsewhere defined in this APA.
{If renewal add} [Taxpayer and IRS previously entered into an APA covering taxable years ending ___________ to ________,
executed on ____________.]
AGREEMENT
The Parties agree as follows:
1.Covered Transactions. This APA applies to the Covered Transactions, as defined in Appendix A.
2.Transfer Pricing Method. Appendix A sets forth the Transfer Pricing Method (TPM) for the Covered Transactions.
3.Term. This APA applies to Taxpayer’s taxable years ending _______ through _______ (APA Term).
4.Operation.
a. Revenue Procedure 96–53 governs the interpretation, legal effect, and administration of this APA.
b. Nonfactual oral and written representations, within the meaning of sections 10.04 and 10.05 of Revenue Procedure 96–53 (in-
cluding any proposals to use particular TPMs), made in conjunction with this request constitute statements made in compromise ne-
gotiations within the meaning of Rule 408 of the Federal Rules of Evidence.
5.Compliance.
a. For each taxable year covered by this APA (APA Year), if Taxpayer complies with the terms and conditions of this APA, then
the IRS will not make or propose any allocation or adjustment under I.R.C. section 482 to the Covered Transactions.
b. If Taxpayer does not comply, then the IRS may:
i. enforce the terms and conditions of this APA and make or propose allocations or adjustments under I.R.C. section 482
consistent with this APA;
ii. cancel or revoke this APA under section 11.05 or 11.06 of Revenue Procedure 96–53; or
iii. revise this APA, if the Parties agree.
c. Taxpayer must timely file an Annual Report for each APA Year in accordance with Appendix C and section 11.01 of Revenue
Procedure 96–53. The IRS may request additional information reasonably necessary to clarify or complete the Annual Report. Tax-
payer will provide all requested information within 30 days. Additional time may be allowed for good cause.
d. The IRS will determine whether Taxpayer has complied with this APA based on Taxpayer’s U.S. Returns, Financial State-
ments, and other APA Records, for the APA Term and any other year necessary to verify compliance. For Taxpayer to comply with
this APA, an independent certified public accountant must{use the following or an alternative}render an opinion that the Taxpay-
er’s Financial Statements present fairly, in all material respects, Taxpayer’s financial position under U.S. GAAP.
e. In accordance with section 11.04 of Revenue Procedure 96–53, Taxpayer will (1) maintain its APA Records, and (2) make them
available to IRS in connection with an examination under section 11.03. Compliance with this subparagraph constitutes compli-
ance with the record-maintenance provisions of I.R.C. sections 6038A and 6038C for the Covered Transactions for any taxable year
during the APA Term.
April 14, 20037422003–15 I.R.B.

f. If Taxpayer’s actual transactions do not result in compliance with the TPM, Taxpayer:
i. Must report its taxable income in an amount that is consistent with the TPM and all other requirements of this APA on
its timely filed U.S. Return. However, for any APA Year, if Taxpayer’s timely filed U.S. Return is filed no later than 60
days after the effective date of this APA, then Taxpayer may instead report its taxable income in an amount that is con-
sistent with the TPM and all other requirements of this APA on an amended U.S. Return filed no later than 120 days after
the effective date of this APA.
ii. May make compensating adjustments under Revenue Procedure 96–53, section 11.02, subject to any modifications or
restrictions in Appendix A or elsewhere in this APA.
g.{Insert when U.S. Group or Foreign Group contains more than one member}. [This APA addresses the arm’s-length nature
of prices charged or received in the aggregate between Taxpayer[s] and Foreign Participants. Except as explicitly provided, this APA
does not address and does not bind the IRS with respect to prices charged or received, or the relative amounts of income or loss
realized, by particular legal entities that are members of U.S. Group or that are members of Foreign Group.]
h. The True Taxable Income within the meaning of Treasury Regulations section 1.482–1(a)(1) of a member of an affiliated group
filing a U.S. consolidated return will be determined under the I.R.C. section 1502 Treasury Regulations.
i.{Optional for US Parent Signatories}To the extent that Taxpayer’s compliance with this APA depends on certain acts of For-
eign Group members, Taxpayer will ensure that each Foreign Group member will perform such acts.
6.Critical Assumptions. This APA’s critical assumptions, within the meaning of Revenue Procedure 96–53, section 5.07, appear in
Appendix B. Revenue Procedure 96–53, section 11.07, governs if any critical assumption has not been met.
7.Disclosure. This APA, and any background information related to this APA or the APA Request, are: (1) considered“return in-
formation”under I.R.C. section 6103(b)(2)(C); and (2) not subject to public inspection as a“written determination”under I.R.C.
section 6110(b)(1). Section 521(b) of Pub. L. 106–170 provides that the Secretary of the Treasury must prepare a report for public
disclosure that includes certain specifically designated information concerning all APAs, including this APA, in a form that does not
reveal taxpayers’identities, trade secrets, and proprietary or confidential business or financial information.
8.Disputes. If a dispute arises concerning the interpretation of this APA, the Parties will seek a resolution by the IRS Associate Chief
Counsel (International), to the extent reasonably practicable, before seeking alternative remedies. If any dispute arises that is not
related to interpreting this APA, the Parties will seek to resolve the dispute in a manner consistent with Revenue Procedure 96–53,
section 11.03(4).
9.Materiality. In this APA the terms“material”and“materially”will be interpreted consistently with the definition of“material facts”
in Revenue Procedure 96–53, section 11.05(1).
10.Section Captions. This APA’s section captions, which appear initalics, are for convenience and reference only. The captions
do not affect in any way the interpretation or application of this APA.
11.Entire Agreement and Severability. This APA is the complete statement of the Parties’agreement. The Parties will sever, de-
lete, or reform any invalid or unenforceable provision in this APA to approximate the Parties’intent as nearly as possible.
12.Successor in Interest. This contract binds, and inures to the benefit of, any successor in interest to Taxpayer.
13.Notice. Any notices required by this APA or Revenue Procedure 96–53 must be in writing. Taxpayer will send notices to the
IRS at the address and in the manner set forth in Revenue Procedure 96–53, section 5.13(2). The IRS will send notices to:
Taxpayer Corporation
Attn: Jane Doe, Sr. Vice President (Taxes)
1000 Any Road
Any City, USA 10000
(phone: __________)
14.Effective date and Counterparts. This APA is effective starting on the date, or later date of the dates, upon which all Parties ex-
ecute this APA. The Parties may execute this APA in counterparts, with each counterpart constituting an original.
2003–15 I.R.B.743April 14, 2003

WITNESS,
The Parties have executed this APA on the dates below.
[Taxpayer Name in all caps]
By:________________________________________
Jane Doe
Sr. Vice President (Taxes)
Date:_______, 20 ____
IRS
By:________________________________________
Mindy Piatoff
Acting Director, Advance Pricing Agreement Program
Date:_______, 20 ____
April 14, 20037442003–15 I.R.B.

APPENDIX A
COVERED TRANSACTIONS AND TRANSFER PRICING METHOD (TPM)
1.Covered Transactions.
[Define the Covered Transactions.]
2.TPM.
{Note: If appropriate, adapt language from the following examples.}
•CUP Method
The TPM is the comparable uncontrolled price (CUP) method. The price charged for ___________ must equal between __________
and ___________ (the Arm’s Length Range). Taxpayer must realize, recognize, and report results on its U.S. Returns that clearly
reflect such pricing.
•Resale Price Method (RPM)
The TPM is the resale price method (RPM). Taxpayer must realize, recognize, and report results on its U.S. Returns that clearly
reflect a gross margin (defined as gross profit divided by sales revenue as those terms are defined in Treasury Regulations sections
1.482–5(d)(1) and (2)) of between _____% and _____% (the Arm’s Length Range) for the Covered Transactions.
•Cost Plus Method
The TPM is the cost plus method. Taxpayer must realize, recognize, and report results on its U.S. Returns that clearly reflect a
ratio of gross profit to production costs (within the meaning of Treasury Regulations sections 1.482–3(d)(1) and (2)) of between
_____% and _____% (the Arm’s Length Range) for the Covered Transactions.
•CPM with Berry Ratio PLI
The TPM is the comparable profits method (CPM). Taxpayer must realize, recognize, and report results on its U.S. Returns
that clearly reflect a gross profit to operating expenses ratio (as those terms are defined in Treasury Regulations sections 1.482–
5(d)(2) and (3)) of between ________ and ________ (the Arm’s Length Range) for the Covered Transactions.
•CPM using an Operating Margin PLI
The TPM is the comparable profits method (CPM). The profit level indicator is an operating margin. Taxpayer’s reported op-
erating profit (within the meaning of Treasury Regulations sections 1.482–5(d)(5)) must clearly reflect an operating margin (de-
fined as the ratio of operating profit to sales revenue as those terms are defined in Treasury Regulations section 1.482–5(d)(1) and
(4)) of between ________% and _______% (the Arm’s Length Range) for the Covered Transactions.
•CPM using a Three-year Rolling Average Operating Margin PLI
The TPM is the comparable profits method (CPM). The profit level indicator is an operating margin. Taxpayer’s Three-Year
Rolling Average operating margin is defined as follows for any APA Year: the sum of Taxpayer’s reported operating profit (within
the meaning of Treasury Regulations section 1.482–5(d)(5)) for that APA Year and the two preceding years, divided by the sum of
Taxpayer’s sales revenue (within the meaning of Treasury Regulations section 1.482–5(d)(1)) for that APA Year and the two pre-
ceding years. Taxpayer’s Three-Year Rolling Average operating margin must be between ________% and ________% (the Arm’s
Length Range).
•Residual Profit Split Method
The TPM is the residual profit split method. Taxpayer must realize, recognize, and report results on its U.S. Returns that clearly
reflect the following: [insert description of profit-split mechanism].
[Insert additional provisions as needed.]
3.Adjustments
{For use with a CPM}
For each APA Year, if Taxpayer’s year-end [Three-Year Rolling Average]{specify PLI used}for the Covered Transactions is not
in compliance with the TPM, Taxpayer will make an adjustment that brings its [Three-Year Rolling Average]{specify PLI used}to
{if the TPM specifies a point value, use that; if the TPM specifies an Arm’s Length Range, use the nearest edge of the Arm’s Length
Range or a point such as the median within the Arm’s Length Range}.
[Insert additional provisions as needed.]
2003–15 I.R.B.745April 14, 2003

APPENDIX B
CRITICAL ASSUMPTIONS
This APA’s critical assumptions are:
1. The business activities, functions performed, risks assumed, assets employed, and financial and tax accounting methods and
classifications [and methods of estimation] of Taxpayer in relation to the Covered Transactions will remain materially the same as
described or used in Taxpayer’s APA Request. A mere change in business results will not be a material change.
[Insert additional provisions as needed.]
APPENDIX C
APA RECORDS AND ANNUAL REPORT
APA RECORDS
The APA Records will consist of:
1. All documents listed below for inclusion in the Annual Report, as well as all documents, notes, work papers, records, or other
writings that support the information provided in such documents.
2. [Insert here other records as required.]
ANNUAL REPORT
The Annual Report will include a cover sheet and a table of contents. The cover sheet will specify:
i. the Parties to the APA
ii. the APA Term (defined in section 3 of this APA)
iii. the APA’s effective date (defined in section 14 of this APA)
iv. whether the APA is a renewal, and if so the term of the prior APA
v. whether the APA has been amended, and if so the amendment’s effective date
vi. any information needed to distinguish the APA at issue from any other APAs involving the same parties
vii. any changes to the Taxpayer notice information in section 13 of this APA
The table of contents and the Annual Report will be organized as listed below. Taxpayer must include the following items in its An-
nual Report for each APA Year.
1. Statements that fully identify, describe, analyze, and explain:
a. All material differences between any of Taxpayer’s business operations (including functions, risks, markets, contractual terms,
economic conditions, property or services, and assets employed) during the APA Year and the description of the business opera-
tions contained in the APA Request. If there have been no material differences, the Annual Report will include a statement to that
effect.
b. All material changes in Taxpayer’s accounting methods and classifications, and methods of estimation, from those described
or used in Taxpayer’s request for this APA. If there have been no such material changes, the Annual Report will include a state-
ment to that effect.
c. Any failure to meet any critical assumption. If there have been no failures, the Annual Report will include a statement to that
effect.
d. Any change to any entity classification for federal income tax purposes (including any change that causes an entity to be dis-
regarded for federal income tax purposes) of any Worldwide Group member that is a party to the Covered Transactions or is oth-
erwise relevant to the TPM.
e. Any changes to Taxpayer’s financial accounting methods that were made to conform to U.S. GAAP changes and that affect
the Covered Transactions.
f. The amount, reason for, and financial analysis of any compensating adjustments under paragraph 5(f)(2) of this APA for the
APA Year, including but not limited to:
i. the amounts paid or received by each affected entity;
April 14, 20037462003–15 I.R.B.

ii. the character (such as capital, ordinary, income, expense) and country source of the funds transferred, and the specific
affected line item(s) of any affected U.S. Return; and
iii. the date(s) and means by which the payments are or will be made.
g. The amounts, description, reason for, and financial analysis of any book-tax differences relevant to the TPM for the APA Year,
as reflected on Schedule M–1 of the U.S. Return for the APA Year.
2. The Financial Statements, and any necessary account detail to show compliance with the TPM, with a copy of each independent
certified public accountant’s opinion required by paragraph 5(d) of this APA.
3. A financial analysis that reflects Taxpayer’s TPM calculations for the APA Year. The calculations must reconcile with and refer-
ence the Financial Statements in sufficient account detail to allow the IRS to determine whether Taxpayer has complied with the
TPM.
4. An organizational chart for the Worldwide Group, revised annually to reflect all ownership or structural changes of entities that
are parties to the Covered Transactions or are otherwise relevant to the TPM.
2003–15 I.R.B.747April 14, 2003

APPENDIX D
DEFINITIONS
The following definitions control for all purposes of this APA. The definitions appear alphabetically below:
TermDefinition
Annual ReportA report within the meaning of Revenue Procedure 96–53, section 11.
APAThis Advance Pricing Agreement, which is an“advance pricing agreement”within the
meaning of Revenue Procedure 96–53, section 1.
APA RecordsThe records specified in Appendix C.
APA RequestTaxpayer’s request for this APA dated _________, including any amendments or
supplemental or additional information thereto.
Covered TransactionThis term is defined in Appendix A.
Financial StatementsThe financial statements prepared in accordance with U.S. GAAP and stated in U.S.
dollars.
Foreign GroupWorldwide Group members that are not U.S. persons.
Foreign Participants[name the foreign entities involved in Covered Transactions].
I.R.C.The Internal Revenue Code of 1986, 26 U.S.C., as amended.
Pub. L. 106–170The Ticket to Work and Work Incentives Improvement Act of 1999.
Revenue Procedure 96–53Rev. Proc. 96–53, 1996–2 C.B. 375.
Transfer Pricing Method (TPM)A transfer pricing method within the meaning of Treasury Regulations section 1.482–
1(b) and Revenue Procedure 96–53, section 3.02.
U.S. GAAPU.S. generally-accepted accounting principles.
U.S. GroupWorldwide Group members that are U.S. persons.
U.S. ReturnFor each taxable year, the“returns with respect to income taxes under subtitle A”that
Taxpayer must“make”in accordance with I.R.C. section 6012. {Or substitute for
partnership:For each taxable year, the“return”that Taxpayer must“make”in accor-
dance with I.R.C. section 6031.}
Worldwide GroupTaxpayer and all organizations, trades, businesses, entities, or branches (whether or not
incorporated, organized in the United States, or affiliated) owned or controlled directly
or indirectly by the same interests.
April 14, 20037482003–15 I.R.B.

ATTACHMENT B
FORMULAS FOR BALANCE SHEET ADJUSTMENTS
Definitions of Variables:
AP=average accounts payable
AR=average trade accounts receivable, net of allowance for bad debt
cogs=cost of goods sold
INV=average inventory, stated on FIFO basis
opex=operating expenses (general, sales, administrative, and depreciation expenses)
PPE=property, plant, and equipment, net of accumulated depreciation
sales=net sales
tc=total cost (cogs + opex, as defined above)
h=average accounts payable or trade accounts receivable holding period, stated as a fraction of a year
i=interest rate
t=entity being tested
c=comparable
Equations:
If Cost of Goods Sold is controlled (generally, sales in denominator of PLI):
Receivables Adjustment (“RA”):RA = {[(AR
t
/ sales
t
) x sales
c
]-AR
c
} x {i/[1+(i x h
c
)]}
Payables Adjustment (“PA”):PA = {[(AP
t
/ sales
t
) x sales
c
]-AP
c
} x {i/[1+(i x h
c
)]}
Inventory Adjustment (“IA”):IA = {[(INV
t
/ sales
t
) x sales
c
] - INV
c
}xi
PP&E Adjustment (“PPEA”):PPEA = {[(PPE
t
/ sales
t
) x sales
c
] - PPE
c
}xi
If Sales are controlled (generally, costs in the denominator of PLI):
18
Receivables Adjustment (“RA”):RA = {[(AR
t
/tc
t
)xtc
c
]-AR
c
} x {i/[1+(i x h
c
)]}
Payables Adjustment (“PA”):PA = {[(AP
t
/tc
t
)xtc
c
]-AP
c
} x {i/[1+(i x h
c
)]}
Inventory Adjustment (“IA”):IA = {[(INV
t
/tc
t
)xtc
c
] - INV
c
}xi
PP&E Adjustment (“PPEA”):PPEA = {[(PPE
t
/tc
t
)xtc
c
] - PPE
c
}x i
Then Adjust Comparables as Follows:
adjusted sales
c
=sales
c
+RA
adjusted cogs
c
=cogs
c
+PA-IA
adjusted opex
c
=opex
c
- PPEA
18
Depending on the specific facts, the equations below may use total costs (“tc”) or cost of goods sold (“cogs”).
2003–15 I.R.B.749April 14, 2003

Foundations Status of Certain
Organizations
Announcement 2003–20
The following organizations have failed
to establish or have been unable to main-
tain their status as public charities or as op-
erating foundations. Accordingly, grantors
and contributors may not, after this date,
rely on previous rulings or designations in
the Cumulative List of Organizations (Pub-
lication 78), or on the presumption aris-
ing from the filing of notices under section
508(b) of the Code. This listing doesnot
indicate that the organizations have lost their
status as organizations described in sec-
tion 501(c)(3), eligible to receive deduct-
ible contributions.
Former Public Charities.The follow-
ing organizations (which have been treated
as organizations that are not private foun-
dations described in section 509(a) of the
Code) are now classified as private
foundations:
Aim for College Foundation, Inc.,
Hopedale, MA
American & Brazilian Association, Inc.,
Allston, MA
American Brotherhood for the Russian
Disabled, Inc., Staten Island, NY
American Committee on Jerusalem,
Washington, DC
American Friends of Beit Reuven, Inc.,
Brooklyn, NY
American Friends of Modzitz, Inc.,
Brooklyn, NY
American Friends of Ramat Eshkol,
New York, NY
American Systems Educational Institute,
San Francisco, CA
Angel City, Inc., Bozeman, MT
Angela L. Robins Better Living
Foundation, San Diego, CA
Angels for Aliana Micheli Foundation,
Aurora, IL
Answering Nurses Services Registry,
Inc., Philadelphia, PA
Antioch/Carol City Community
Development Corporation, Miami, FL
Applied Research Institute, Renton, WA
Aquatic Realm International Research
and Preservation Society, Inc.,
Greenville, SC
ASA Productions, Inc.,
Hastings-On-Hudson, NY
Aspen Junior VBC, Inc., Aspen, CO
Association for Corporate Education,
Inc., Dallas, TX
B. J. Johnsons Modern School of Self
Defense, Inc., Jamaica, NY
Backroads Theater, Inc., New York, NY
Baitul Jannah Masjid & Community
Center, Inc., Brooklyn, NY
Bangladesh Buddhist Society of
America, Inc., Woodside, NY
Bay Area Foster Family Institute, Inc.,
El Sobrante, CA
Bayside Lions Services, Inc., Bacliff, TX
Bee Enterprise Educational Services,
Inc., Pahoa, HI
Being Reunited With Opportunity, Inc.,
Baltimore, MD
Beis Medrash Toras Chayyim,
New York, NY
Bellows Free Academy Endowment
Fund, Inc., St. Albans, VT
Benton County Foundation for Better
Education, Camden, TN
Berkshire Institute, Inc., Boston, MA
Bible Brethren Fellowship, Inc.,
Seffner, FL
Big Brothers Big Sisters of Nueces
County, Corpus Christi, TX
Big Cat Foundation, Inc., Cincinnati, OH
Black & Gold Allsport Booster Club,
Hesperia, CA
Black Dance Company, Rockford, IL
Blue River Elementary PTO,
Stilwell, KS
Bradley Hospital Foundation Trusts,
Providence, RI
Bridgeway Foundation, Inc.,
Fort Walton Beach, FL
Bright Light Community Services
Dr. Herbert Bright, Plainfield, NJ
Britain Meets the Bay,
San Francisco, CA
Broken Bread, Inc., Baltimore, MD
Browns Education and Recovery Center
Bear, Houston, TX
Burbick Foundation, Cleveland, OH
Business Assistance Service, Inc.,
Glen Oaks, NY
California Space Grant Foundation,
Redwood City, CA
Camp Ashreinu, Inc., Brooklyn, NY
Canosia Area Recreational Equipment
Corp., Duluth, MN
Carry the Message, Inc., Glencoe, IL
Center for Research in Epidemiology
and Endocrine Disorders, Inc.,
Shaker Heights, OH
Central Coast Youth Soccer League,
Hollister, CA
Central Florida Partnership for Non
Violence, Inc., Orlando, FL
Central Illinois Hockey League, Inc.,
Decatur, IL
Childrens Center of South Carolina,
Columbia, SC
Childrens Connection,
Lake Havasu City, AZ
Christian Generation Center of Hope,
Inc., St. Petersburg, FL
Christian Help Service Ministries, Inc.,
Riverdale, GA
Christmas In April - Mobile, Mobile, AL
Christopher Radko Foundation for
Children, Inc., Elmsford, NY
Citizens for Buckeye Basin Parks, Inc.,
Toledo, OH
Coalition of Concerned Individuals,
Detroit, MI
Colegio De Estudios Tecnicos
Profesionales Para La Salad,
College Station, TX
Colorado Elementary Schools Network,
Pueblo West, CO
Colorado Head Start Association,
Colorado Springs, CO
Columbus Roadrunners, Columbus, OH
Committee for Preservation of Eretz
Hakodesh, New York, NY
Community Enrichment & Legal
Services, Inc., Van Nuys, CA
Community Foundation for Behavioral
Health, Los Angeles, CA
Community Health Resource,
Incorporated, Luthersville, GA
Community Services, Inc., Term,
Fort Smith, AR
Community Video Media &
Communication, Brooklyn, NY
Computer Literacy Project, Inc.,
Glendale, WI
Contemporary Annual, New York, NY
Coram Deo Ministries, Ketchum, ID
CRIME, Inc., Phoenix, AZ
Culture Corps, Inc., Boulder, CO
Defense Studies Foundation,
Alexandria, LA
Delaware Multicultural and Civic
Organization, Dover, DE
Derek Kennard Foundation,
San Diego, CA
Diane M. Burbick Gifted Education
Endowment, Cleveland, OH
Dignity, Inc., An Adolescent Female
Learning Center, Denver, CO
District Institutes for Growth, Inc.,
Washington, DC
April 14, 20037502003–15 I.R.B.

Dr. Paul Miller Foundation, Inc.,
Denver, CO
Dracut Police Association, Inc.,
Dracut, MA
Dreamstone, Inc., Ann Arbor, MI
Eastern Massachusetts Assoc. of
Interscholastic Football Office, Inc.,
Brockton, NY
Education Art & Music Corporation,
Los Angeles, CA
Education for Humanity USA, Inc.,
Rochester, NY
Edu-Kidz Foundation,
Virginia Beach, VA
Elgin Economic Action & Development
Group, Elgin, IL
Elijah Haven Crisis Intervention Center,
Inc., LaGrange, IN
Elkhorn Valley Dive Rescue, Inc.,
Norfolk, NE
Empower, Inc., Spartanburg, SC
Environmental Awareness Control 2000,
E. St. Louis, IL
ETC Horse Rescue, Inc., Ocala, FL
Eternal Life Ministries, Spring, TX
Excitement Productions,
Minneapolis, MN
Faithful Deliverance Development, Inc.,
Miami, FL
Falls County Crime Stoppers, Inc.,
Marlin, TX
First Night Bridgewater-Raritan-
Somerville, Inc., Somerville, NJ
First Night Mt. Lebanon, Pittsburgh, PA
For Christs Sake Television Ministry,
Hayward, CA
Fort Atkinson Wisconservation Club,
Inc., Fort Atkinson, WI
Fort Wayne Ice Skating Club, Inc.,
Fort Wayne, IN
Forums Institute for Public Policy,
Princeton, NJ
Foundation for Youth in
Irondequoit, Rochester, NY
Friends and Family of the Mentally
Ill, Hemet, CA
Friends of Albert C. Maule,
Chicago, IL
Friends of Esrat Cholim, Inc.,
Brooklyn, NY
Friends of Mitzzos Haaretz, Inc.,
Brooklyn, NY
Friends of Oriskany Battlefield State
Historic Site, Lake Geneva, WI
Friends of the East Rockaway Grist Mill
Museum, Inc., Lynbrook, NY
Functional Water Society of North
America, Alameda, CA
Gemilas Chesed L Achanu M Russia,
Inc., Brooklyn, NY
Global Aide, Milwaukee, WI
Global Purity Foundation,
Monterey Park, CA
God and Buddha Salvation Foundation,
San Mimas, CA
Grace Foundation for the Advancement
of Disease Treatment,
New York, NY
Guadalupe Childrens
Missions, Campbell, CA
Gulf Coast Safe Dive Network, Inc.,
Gulf Breeze, FL
Haitian American Unified
Council, Elizabeth, NJ
Hands on Recovery Living
Free, Chicago, IL
Healthy Crones Healthy Earth,
Dallas, TX
Helen Jaggar Scholarship Fund,
Beloit, KS
Helping Hand Food Giveaway
Program, Denver, CO
Hibernia Institute, Inc., Boise, ID
His Little Ones, Inc., Wayne, NJ
His Ministries, Inc., Cochranton, PA
Hispanic Coalition for Progress, Inc.,
El Paso, TX
Holy Family Resource Center,
Linwood, MI
Horses of Hope Riding Center,
Baxter Springs, KS
Houston Association of Parents of
Visually Impaired, Houston, TX
IA Foundation, Inc., Melville, NY
ICE Christian Coalition, Inc.,
Dallas, TX
Impact Ministries, Inc.,
Hermitage, TN
In Home Advocacy Program, Inc.,
Hyde Park, MA
Inclusion Network, Mercer Island, WA
Institute for Workplace Development,
Inc., Mantua, NJ
Instituto San Martiniano De Los Estados
De America, Inc., New York, NY
Integra, Inc., Montclair, NJ
International Academy for Peace
Education, Daly City, CA
International Center for Jazz Foundation,
Inc., New York, NY
International Family Health and Safety
Services, Lynnwood, WA
Jacobs Ladder of Iowa, Inc.,
Des Moines, IA
Jean Houston Corporation,
Crockett, TX
Jefferson Music Heritage & Cultural
Foundation, Inc., Metairie, LA
Journey to the Rock Ministries,
Chandler, AZ
Joy and Happiness, Inc., Miami, FL
Jungle Creations, Seattle, WA
Justice Center of Oneida County,
Inc., Utica, NY
Juvenile Delinquency Alternative
Prevention Program, Inc.,
Houston, TX
Kabir Foundation, Inc.,
Sunnyvale, CA
Kapiolani Marketing Association,
Honolulu, HI
Kent-Meridian Wrestling Booster Club,
Kent, WA
Keystone Oaks Hockey Club,
Pittsburgh, PA
Kindergarten Parents Club,
Lynbrook, NY
Kingdom Foundation, Inc., Atlanta, GA
Know It Alls, Urbana, IL
Koilel Bircas Shmuel, Inc.,
Great Neck, NY
La Belle Afrique Foundation,
Omaha, NE
Lago Vista Youth Basketball,
Lago Vista, TX
Lakeland Polk Housing Corporation,
Lakeland, FL
Larry Loves Kids Foundation,
Inc., Stone Mountain, GA
Las Vegas Performing Arts Center
Foundation, Las Vegas, NV
Last Chance Weed and Wildlife
Association, Helena, MT
Learn 4 Success, Inc.,
Sacramento, CA
Learning Center, Inc.,
Cambria Heights, NY
Leroy Wilson Memorial Scholarship
Fund, S. Orange, NJ
Lienzo Charro Aguilar, Inc.,
Lufkin, TX
Life Care Plus, Inc., San Pedro, CA
Life of Victory Fellowship, Aurora, CO
Lighthouse Charities, Inc., Bellwood, IL
Lineville Development Corporation,
Lineville, AL
Long Island Conservatory Theatre, Inc.,
Bayside, NY
Love for Peace International,
N. Miami, FL
Lumen Gentium, Inc., Pittsburgh, PA
Majlis Ash-Shura of New Jersey,
Newark, NJ
2003–15 I.R.B.751April 14, 2003

Manetto Brook Masonic Historical
Society, Hicksville, NY
Maryce Foundation, Inc., Jamaica, NY
Mazzei Foundation, Inc., Tulsa, OK
McKinnley Leif Ericson Park Alliance,
Ltd., Brooklyn, NY
Meadows Home & Garden Club,
Houston, TX
Medical Missions International, Inc.,
Fort Lee, NJ
Meeting Place of Pontiac, Inc.,
Pontiac, MI
Megas Foundation, Rocky River, OH
Melissa Semonin Memorial Scholarship
Fund, Atwater, OH
Methodist Orphanage Methodist Home
for Children Alumni Association,
Clayton, NC
Metro Asian Cultural Exchange, Inc.,
Flushing, NY
Miami Hemispheric Cultural Exposition,
Inc., Miami, FL
Ministerio El Faro Palm Bay, Inc., the
Lighthouse Ministries Palm Bay,
Inc., Melbourne, FL
Mokelumne Manor Thornton Homes,
Thornton, CA
Montgomery FFA Booster Club,
Montgomery, TX
Morgan Hill Gymnastics Booster Club,
Morgan Hill, CA
Mt. Arab Masonic Historical Society,
Tuper Lake, NY
Museum of Northern California,
Chico, CA
Mustang Wetlands Conservancy,
Dallas, TX
Nat Turner Historical Society, Inc.,
Waverly, VA
National Credit Counselors, Inc.,
Elmont, NY
National Telephone Prayer Circle
Society, Gainesville, FL
Native American Promotions, Inc.,
Bartlett, IL
New Braunfels Junior Golf Association,
New Braunfels, TX
New Millennium Development Services,
Inc., Roosevelt, NY
New Vision Outreach Ministries, Inc.,
Valdosta, GA
NHS Singers Parent Associates, Inc.,
Noblesville, IN
Nichibei Potomac Society,
Alexandria, VA
Nigeria Meningitis Appeal Fund NMAF,
Inc., Boston, MA
North Baldwin Sheriffs Search &
Rescue, Inc., Bay Minette, AL
North Carolina Assisted Living
Foundation, Cary, NC
Oak Ridge High School Band Booster
Association, Conroe, TX
Oneal Parent Teacher Organization,
Poplar Bluff, MO
Opelousas Main Street Program, Inc.,
Opelousas, LA
Operation Hands On, Inc., OHO,
Kihei, HI
Ophthalmology Education Worldwide,
Cleveland, OH
Opp Historical Society, Inc., Opp, AL
Oradell Arts & Business Coalition, Inc.,
Oradell, NJ
Orange County Players, Inc., Paoli, IN
Orville L. Rodberg Charitable
Foundation, Inc.,
West Palm Beach, FL
Overcomers in Christ Family Restoration
Ministries, Inc., Richmond, VA
Paramount Baseball Traveling Team,
Paramount, CA
Parenting Institute, Portland, OR
Paso Robles Multi Flora Garden Club,
Paso Robles, CA
Patrick D. Hubbard Ministries,
Pearl River, LA
Patroon Land Foundation, Delmar, NY
Platforms, Inc., New York, NY
Plymouth South High School Hockey
Booster, Inc., Plymouth, MA
Portland Area Soccer Association,
Portland, MI
Potomac Swamp Society,
Washington, DC
Prairie Wildlife Rehabilitation,
Inc., Warrensburg, IL
Praying Teachers Network,
Cookeville, TN
Preventing Tobacco Addiction,
Dublin, OH
Prevle County Youth Foundation, Inc.,
Eaton, OH
Prince Hall Temple Associates, Inc.,
New York, NY
Prince Henry Sinclair Society of the
United States, Inc., Orangeburg, NY
Professional Business Institute, Inc.,
Brooklyn, NY
Progress Village Panthers, Inc.,
Riverview, FL
Project Phoenix, Henderson, NV
Project Reality, Inc., Brockton, MA
Public Safety and Education Department,
Markham, IL
Queensbury Masonic Historical Society,
Queensbury, NY
Quincy Development Association,
Quincy, IL
Racing for Abused Children’s Needs
Foundation, Costa Mesa, CA
Rare Disease Awareness Center,
San Diego, CA
Reach International, Inc., Dallas, TX
Recoveryworks, Inc., Oxnard, CA
Renewal A Spiritual Journey,
Austin, TX
Resurrection Ministries, Inc.,
Texarkana, TX
Rhodius Booster Club, Indianapolis, IN
Richmond Citizens Police Academy
Alumni Association, Richmond, TX
Riverrun Center, Inc., New London, CT
Rochambeau Foundation, Inc.,
Middlebury, CT
Rock Springs Community Chest,
Rock Springs, WY
Rockaway Fighting Irish Football Club,
Inc., Rockaway, NY
Safety Net BBS, Inc., Marietta, GA
Saint Maria Goretti Guild, Inc.,
Ocala, FL
Sandwich Youth Tackle Football,
Sandwich, IL
Scholars Phair Foundation, Inc.,
Denton, TX
Search and Rescue of the Northern
Adirondacks, Inc.,
Saranac Lake, NY
Seays Evangelistic Outreach Center,
Inc., Davenport, FL
Segment Educational Support
Corporation, Malibu, CA
Self Esteem Foundation, Inc.,
Huntington, NY
Shaaman, Denver, CO
Sherit Isroel, Inc., Brooklyn, NY
South County Youth Productions Corp.,
Chandler, AZ
Southern Sudanese Community of
Austin, Austin, TX
Southern Wayne Co. Association for the
Education of Young Children,
Lincoln Park, MI
Southwest Musical Arts Foundation,
Scottsdale, AZ
Spiritual Awakening USA, Bolivar, MO
St. James Lutheran School Foundation,
Chicago, IL
St. Petersburg Economic Opportunities
Unlimited, Inc., St. Petersburg, FL
Stand By Me, Inc., Waterbury, CT
April 14, 20037522003–15 I.R.B.

Still Waters Retreat Center, Inc.,
Cypress, TX
Stuart Grant’s Academy Rewards,
Ferndale, MI
Sussex County Hockey Association,
Hamburg, NJ
Team One For Kids, Plainfield, IL
Technical Resources for Environmental
Quality, Inc., Milton, MA
Texas Ices, Arlington, TX
Theatre World Awards, Inc.,
Metuchen, NJ
Third Place, Inc., Sarasota, FL
Tonga USA Today, Honolulu, HI
Tourette Syndrome Permanent Research
Fund, Inc., Bayside, NY
True Vine Community Services
Organizations, Inc.,
Minneapolis, MN
Ulster County Daycare and Nursery
School Scholarship Fund,
Shokan, NY
Union City Area Pee Wee Football
Boosters, Inc., Union City, IN
Universal Gymnastics Booster Club,
Inc., Miami, FL
Up Stage Productions, Inc.,
Ft. Collins, CO
Up to Youth, Inc., Littleton, MA
Urban Health Foundation, Inc.,
Bronx, NY
Utah Recreation and Parks Association,
Inc., Salt Lake City, UT
Venice H. E. A. R. T., Topanga, CA
Veteran Environmental Trailblazers,
Inc., Pittsburgh, PA
Virginia Alliance of Quilters Museum,
Hopewell, VA
Walker County Youth Football, Assoc.,
Huntsville, TX
Walker’s Elderly Home Care, Inc.,
New Orleans, LA
Water of Life Community Outreach,
Inc., Rancho Cucaminga, CA
WE Band Boosters, Inc.,
Bowling Green, KY
Wemi Sohalawak, Inc., Longpond, PA
West Suburban Association of the Deaf,
Oak Brook, IL
Westfield High School Ice Hockey
Association, Westfield, NJ
Whatcom County Association of Foster
and Adoptive Families,
Bellingham, WA
William Stout Institute for Measurement,
Champaign, IL
Willing Heart Publications, Inc.,
Modesto, CA
Winter Garden Services, Inc.,
Carrizo Springs, TX
WIT Services, Rockford, IL
Wolverine Football Club, Irvine, CA
Womens Civic League, Poplarville, MS
Work Fair Construction, Inc.,
Miller Place, NY
World Healthcare Foundation,
Cincinnati, OH
World View, Inc., Roswell, GA
Yellow Bike Program & Reconditioned
Bikes for Kids, Rapid City, SD
Yeshiva Beit Rafael, Flushing, NY
Zia Deaf Blind Club of New Mexico,
Inc., Albuquerque, NM
If an organization listed above submits
information that warrants the renewal of its
classification as a public charity or as a pri-
vate operating foundation, the Internal
Revenue Service will issue a ruling or de-
termination letter with the revised classi-
fication as to foundation status. Grantors and
contributors may thereafter rely upon such
ruling or determination letter as provided
in section 1.509(a)–7 of the Income Tax
Regulations. It is not the practice of the Ser-
vice to announce such revised classifica-
tion of foundation status in the Internal
Revenue Bulletin.
2003–15 I.R.B.753April 14, 2003

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as“rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle
applied to A, and the new ruling holds
that the same principle also applies to B,
the earlier ruling is amplified. (Compare
withmodified, below).
Clarifiedis used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously
published ruling and points out an essen-
tial difference between them.
Modifiedis used where the substance
of a previously published position is
being changed. Thus, if a prior ruling
held that a principle applied to A but not
to B, and the new ruling holds that it
applies to both A and B, the prior ruling
is modified because it corrects a pub-
lished position. (Compare withamplified
andclarified, above).
Obsoleteddescribes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used
in a ruling that lists previously published
rulings that are obsoleted because of
changes in law or regulations. A ruling
may also be obsoleted because the sub-
stance has been included in regulations
subsequently adopted.
Revokeddescribes situations where the
position in the previously published rul-
ing is not correct and the correct position
is being stated in the new ruling.
Supersededdescribes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a
period of time in separate rulings. If the
new ruling does more than restate the
substance of a prior ruling, a combination
of terms is used. For example,modified
andsupersededdescribes a situation
where the substance of a previously pub-
lished ruling is being changed in part and
is continued without change in part and it
is desired to restate the valid portion of
the previously published ruling in a new
ruling that is self contained. In this case,
the previously published ruling is first
modified and then, as modified, is super-
seded.
Supplementedis used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.
Suspendedis used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.
Abbreviations
The following abbreviations in current
use and formerly used will appear in
material published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F. R .—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign Corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statements of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.
April 14, 2003i2003–15 I.R.B.

Numerical Finding List
1
Bulletins 2003–1 through 2003–14
Announcements:
2003–1, 2003–2 I.R.B.281
2003–2, 2003–3 I.R.B.301
2003–3, 2003–4 I.R.B.361
2003–4, 2003–5 I.R.B.396
2003–5, 2003–5 I.R.B.397
2003–6, 2003–6 I.R.B.450
2003–7, 2003–6 I.R.B.450
2003–8, 2003–6 I.R.B.451
2003–9, 2003–7 I.R.B.490
2003–10, 2003–7 I.R.B.490
2003–11, 2003–10 I.R.B.585
2003–12, 2003–10 I.R.B.585
2003–13, 2003–11 I.R.B.603
2003–14, 2003–11 I.R.B.603
2003–15, 2003–11 I.R.B.605
2003–16, 2003–12 I.R.B.641
2003–18, 2003–13 I.R.B.675
Notices:
2003–1, 2003–2 I.R.B.257
2003–2, 2003–2 I.R.B.257
2003–3, 2003–2 I.R.B.258
2003–4, 2003–3 I.R.B.294
2003–5, 2003–3 I.R.B.294
2003–6, 2003–3 I.R.B.298
2003–7, 2003–4 I.R.B.310
2003–8, 2003–4 I.R.B.310
2003–9, 2003–5 I.R.B.369
2003–10, 2003–5 I.R.B.369
2003–11, 2003–6 I.R.B.422
2003–12, 2003–6 I.R.B.422
2003–13, 2003–8 I.R.B.513
2003–14, 2003–8 I.R.B.515
2003–15, 2003–9 I.R.B.540
2003–16, 2003–10 I.R.B.575
2003–17, 2003–12 I.R.B.633
2003–18, 2003–14 I.R.B.699
2003–19, 2003–14 I.R.B.703
Proposed Regulations:
REG–209500–86, 2003–2 I.R.B.262
REG–104385–01, 2003–12 I.R.B.634
REG–116641–01, 2003–8 I.R.B.518
REG–125638–01, 2003–5 I.R.B.373
REG–126016–01, 2003–7 I.R.B.486
REG–126485–01, 2003–9 I.R.B.542
REG–103580–02, 2003–9 I.R.B.543
REG–124069–02, 2003–7 I.R.B.488
REG–131478–02, 2003–13 I.R.B.669
REG–138882–02, 2003–8 I.R.B.522
REG–139768–02, 2003–10 I.R.B.583
REG–151043–02, 2003–3 I.R.B.300
REG–164464–02, 2003–2 I.R.B.262
Revenue Procedures:
2003–1, 2003–1 I.R.B.1
2003–2, 2003–1 I.R.B.76
2003–3, 2003–1 I.R.B.113
2003–4, 2003–1 I.R.B.123
Revenue Procedures—Continued:
2003–5, 2003–1 I.R.B.163
2003–6, 2003–1 I.R.B.191
2003–7, 2003–1 I.R.B.233
2003–8, 2003–1 I.R.B.236
2003–9, 2003–8 I.R.B.516
2003–10, 2003–2 I.R.B.259
2003–11, 2003–4 I.R.B.311
2003–12, 2003–4 I.R.B.316
2003–13, 2003–4 I.R.B.317
2003–14, 2003–4 I.R.B.319
2003–15, 2003–4 I.R.B.321
2003–16, 2003–4 I.R.B.359
2003–17, 2003–6 I.R.B.427
2003–18, 2003–6 I.R.B.439
2003–19, 2003–5 I.R.B.371
2003–20, 2003–6 I.R.B.445
2003–21, 2003–6 I.R.B.448
2003–22, 2003–10 I.R.B.577
2003–23, 2003–11 I.R.B.599
2003–24, 2003–11 I.R.B.599
2003–25, 2003–11 I.R.B.601
2003–26, 2003–13 I.R.B.666
2003–27, 2003–13 I.R.B.667
Revenue Rulings:
2003–1, 2003–3 I.R.B.291
2003–2, 2003–2 I.R.B.251
2003–3, 2003–2 I.R.B.252
2003–4, 2003–2 I.R.B.253
2003–5, 2003–2 I.R.B.254
2003–6, 2003–3 I.R.B.286
2003–7, 2003–5 I.R.B.363
2003–8, 2003–3 I.R.B.290
2003–9, 2003–4 I.R.B.303
2003–10, 2003–3 I.R.B.288
2003–11, 2003–3 I.R.B.285
2003–12, 2003–3 I.R.B.283
2003–13, 2003–4 I.R.B.305
2003–14, 2003–4 I.R.B.302
2003–15, 2003–4 I.R.B.302
2003–16, 2003–6 I.R.B.401
2003–17, 2003–6 I.R.B.400
2003–18, 2003–7 I.R.B.467
2003–19, 2003–7 I.R.B.468
2003–20, 2003–7 I.R.B.465
2003–21, 2003–8 I.R.B.509
2003–22, 2003–8 I.R.B.494
2003–23, 2003–8 I.R.B.511
2003–24, 2003–10 I.R.B.557
2003–25, 2003–13 I.R.B.642
2003–26, 2003–10 I.R.B.563
2003–27, 2003–11 I.R.B.597
2003–28, 2003–11 I.R.B.594
2003–29, 2003–11 I.R.B.587
2003–30, 2003–13 I.R.B.659
2003–31, 2003–13 I.R.B.643
2003–32, 2003–14 I.R.B.689
2003–33, 2003–13 I.R.B.642
2003–35, 2003–14 I.R.B.687
Treasury Decisions:
9024, 2003–5 I.R.B.365
9025, 2003–5 I.R.B.362
Treasury Decisions—Continued:
9026, 2003–5 I.R.B.366
9027, 2003–6 I.R.B.413
9028, 2003–6 I.R.B.415
9029, 2003–6 I.R.B.403
9030, 2003–8 I.R.B.495
9031, 2003–8 I.R.B.504
9032, 2003–7 I.R.B.471
9033, 2003–7 I.R.B.483
9034, 2003–7 I.R.B.453
9035, 2003–9 I.R.B.528
9036, 2003–9 I.R.B.533
9037, 2003–9 I.R.B.535
9038, 2003–9 I.R.B.524
9039, 2003–10 I.R.B.561
9040, 2003–10 I.R.B.568
9041, 2003–8 I.R.B.510
9042, 2003–10 I.R.B.564
9043, 2003–12 I.R.B.611
9044, 2003–14 I.R.B.690
9045, 2003–12 I.R.B.610
9046, 2003–12 I.R.B.614
9047, 2003–14 I.R.B.676
9048, 2003–13 I.R.B.644
9049, 2003–14 I.R.B.685
9050, 2003–14 I.R.B.693
1
A cumulative list of all revenue rulings, revenue
procedures, Treasury decisions, etc., published in
Internal Revenue Bulletins 2002–26 through 2002–52 is
in Internal Revenue Bulletin 2003–1, dated January 6, 2003.
2003–15 I.R.B.iiApril 14, 2003

Finding List of Current Actions
on Previously Published Items
2
Bulletins 2003–1 through 2003–14
Notices:
97–19
Modified by
Rev. Proc. 2003–1, 2003–1 I.R.B.1
2001–26
Obsoleted by
T.D. 9032, 2003–7 I.R.B.471
2001–46
Modified by
Notice 2003–6, 2003–3 I.R.B.298
2001–69
Modified and superseded by
Notice 2003–1, 2003–2 I.R.B.257
2002–27
Clarified by
Notice 2003–3, 2003–2 I.R.B.258
2002–40
Modified by
Ann. 2003–18, 2003–13 I.R.B.675
2002–46
Modified by
Notice 2003–10, 2003–5 I.R.B.369
Proposed Regulations:
REG–209500–86
Corrected by
Ann. 2003–6, 2003–6 I.R.B.450
REG–103829–99
Corrected by
Ann. 2003–12, 2003–10 I.R.B.585
REG–126485–01
Withdrawn by
REG–126485–01, 2003–9 I.R.B.542
REG–143321–02
Corrected by
Ann. 2003–12, 2003–10 I.R.B.585
REG–164464–02
Corrected by
Ann. 2003–6, 2003–6 I.R.B.450
Revenue Procedures:
83–23
Supplemented by
Rev. Proc. 2003–21, 2003–6 I.R.B.448
84–37
Modified by
Rev. Proc. 2003–1, 2003–1 I.R.B.1
93–38
Obsoleted by
Rev. Proc. 2003–15, 2003–4 I.R.B.321
Revenue Procedures—Continued:
97–31
Modified by
Rev. Proc. 2003–9, 2003–8 I.R.B.516
98–13
Obsoleted by
T.D. 9032, 2003–7 I.R.B.471
2002–1
Superseded by
Rev. Proc. 2003–1, 2003–1 I.R.B.1
2002–2
Superseded by
Rev. Proc. 2003–2, 2003–1 I.R.B.76
2002–3
Superseded by
Rev. Proc. 2003–3, 2003–1 I.R.B.113
2002–4
Superseded by
Rev. Proc. 2003–4, 2003–1 I.R.B.123
2002–5
Superseded by
Rev. Proc. 2003–5, 2003–1 I.R.B.163
2002–6
Superseded by
Rev. Proc. 2003–6, 2003–1 I.R.B.191
2002–7
Superseded by
Rev. Proc. 2003–7, 2003–1 I.R.B.233
2002–8
Superseded by
Rev. Proc. 2003–8, 2003–1 I.R.B.236
2002–9
Modified and amplified by
Rev. Proc. 2003–20, 2003–6 I.R.B.445
Rev. Rul. 2003–3, 2003–2 I.R.B.252
2002–20
Supplemented by
Rev. Proc. 2003–26, 2003–13 I.R.B.666
2002–22
Modified by
Rev. Proc. 2003–3, 2003–1 I.R.B.113
2002–29
Modified by
Rev. Proc. 2003–10, 2003–2 I.R.B.259
2002–52
Modified by
Rev. Proc. 2003–1, 2003–1 I.R.B.1
2002–67
Supplemented by
Ann. 2003–3, 2003–4 I.R.B.361
2002–75
Superseded by
Rev. Proc. 2003–3, 2003–1 I.R.B.113
Revenue Procedures—Continued:
2003–3
Amplified by
Rev. Proc. 2003–14, 2003–4 I.R.B.319
2003–7
Corrected by
Ann. 2003–4, 2003–5 I.R.B396
Revenue Rulings:
53–131
Modified by
Rev. Rul. 2003–12, 2003–3 I.R.B.283
57–190
Obsoleted by
Rev. Rul. 2003–18, 2003–7 I.R.B.467
65–190
Revoked by
Rev. Rul. 2003–3, 2003–2 I.R.B.252
69–372
Revoked by
Rev. Rul. 2003–3, 2003–2 I.R.B.252
92–19
Supplemented in part by
Rev. Rul. 2003–24, 2003–10 I.R.B.557
2003–2
Revoked by
Rev. Rul. 2003–22, 2003–8 I.R.B.494
Treasury Decisions:
9002
Corrected by
Ann. 2003–8, 2003–6 I.R.B.451
9021
Corrected by
Ann. 2003–16, 2003–12 I.R.B.641
9022
Supplemented by
Ann. 2003–7, 2003–6 I.R.B.450
Corrected by
Ann. 2003–11, 2003–10 I.R.B.585
2
A cumulative list of current actions on previously
published items in Internal Revenue Bulletins
2002–26 through 2002–52 is in Internal Revenue
Bulletin 2003–1, dated January 6, 2003.
April 14, 2003iii*U.S. Government Printing Office: 2003—496–919/600782003–15 I.R.B.