Internal Revenue Bulletin 2002-48 (PDF rendition): IRS Revenue Rulings

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

# Internal Revenue bulletin

Bulletin No. 2002-48
December 2, 2002

## HIGHLIGHTS OF THIS ISSUE

These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.

## INCOME TAX

Rev. Rul. 2002-78, page 915.
CPI adjustment for below-market loans for 2003. The
amount that section 7872(g) of the Code permits a taxpayer to
lend to a qualified continuing care facility without incurring im-
puted interest is published and adjusted for inflation for years
1987-2003. Rev. Rul. 2001-64 supplemented and superseded.

Rev. Rul. 2002-79, page 908.

Section 1274A - inflation-adjusted numbers for 2003. This
ruling provides the dollar amounts, increased by the 2003 infla-
tion adjustment, for section 1274A of the Code. Rev. Rul.
2001-65 supplemented and superseded.

T.D. 9020, page 907.
REG-141832-02, page 921.

Substantiation of incidental expenses. Final, temporary, and
proposed regulations under section 274 of the Code authorize
the Commissioner to establish a method under which a tax-
payer may substantiate the amount of incidental expenses paid
or incurred while traveling away from home by means of an al-
lowance in lieu of substantiating the actual cost.

T.D. 9022, page 909.
REG-143321-02, page 922.

Temporary and proposed regulations under section 6043(c) of
the Code require information reporting by a corporation if there
is an acquisition of control of the corporation or a substantial
change in the corporation's capital structure. The regulations re-
quire the corporation to file a form reporting the event and to file
Forms 1099 with respect to amounts distributed to sharehold-
ers. These regulations also require brokers who receive a Form
1099 as the record holder of stock, pursuant to section 6043(c)
regulations, to file a Form 1099 with respect to the actual owner
of the stock. A public hearing on the proposed regulations is
scheduled for March 5, 2003.

## EXEMPT ORGANIZATIONS

Announcement 2002-107, page 923.

A list is provided of organizations now classified as private foun-
dations.

## EMPLOYMENT TAX

Notice 2002-78, page 919.

This notice provides tables that show the amount of an individu-
al's income that is exempt from a notice of levy used to collect
delinquent tax in 2003.

## ADMINISTRATIVE

T.D. 9022, page 909.
REG-143321-02, page 922.

Temporary and proposed regulations under section 6043(c) of
the Code require information reporting by a corporation if there
is an acquisition of control of the corporation or a substantial
change in the corporation's capital structure. The regulations re-
quire the corporation to file a form reporting the event and to file
Forms 1099 with respect to amounts distributed to sharehold-
ers. These regulations also require brokers who receive a Form
1099 as the record holder of stock, pursuant to section 6043(c)
regulations, to file a Form 1099 with respect to the actual owner
of the stock. A public hearing on the proposed regulations is
scheduled for March 5, 2003.

### Notice 2002-76, page 917.

Gross income; disaster relief payments. This notice pro-
vides answers to frequently asked questions regarding the tax
treatment of Residential Grant Program grants the Lower Man-
hattan Development Corporation makes to individuals and fami-
lies who occupy rental units or owner-occupied units in areas near
the site of the September 11, 2001, attack on the World Trade
Center.

Finding Lists begin on page ii.
Index for July through November begins on page vi.

Department of the Treasury
Internal Revenue Service

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## The IRS Mission

Provide America's taxpayers top quality service by helping them
understand and meet their tax responsibilities and by applying
the tax law with integrity and fairness to all.

### Introduction

The Internal Revenue Bulletin is the authoritative instrument of the
Commissioner of Internal Revenue for announcing official rul-
ings and procedures of the Internal Revenue Service and for pub-
lishing Treasury Decisions, Executive Orders, Tax Conventions,
legislation, court decisions, and other items of general inter-
est. It is published weekly and may be obtained from the Super-
intendent of Documents on a subscription basis. Bulletin contents
are consolidated semiannually into Cumulative Bulletins, which
are sold on a single-copy basis.

It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application of
the tax laws, including all rulings that supersede, revoke, modify,
or amend any of those previously published in the Bulletin. All pub-
lished rulings apply retroactively unless otherwise indicated. Pro-
cedures relating solely to matters of internal management are
not published; however, statements of internal practices and pro-
cedures that affect the rights and duties of taxpayers are pub-
lished.

Revenue rulings represent the conclusions of the Service on the
application of the law to the pivotal facts stated in the revenue
ruling. In those based on positions taken in rulings to taxpay-
ers or technical advice to Service field offices, identifying de-
tails and information of a confidential nature are deleted to prevent
unwarranted invasions of privacy and to comply with statutory
requirements.

Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be re-
lied on, used, or cited as precedents by Service personnel in the
disposition of other cases. In applying published rulings and pro-
cedures, the effect of subsequent legislation, regulations, court

decisions, rulings, and procedures must be considered, and Ser-
vice personnel and others concerned are cautioned against reach-
ing the same conclusions in other cases unless the facts and
circumstances are substantially the same.

The Bulletin is divided into four parts as follows:

#### Part I .- 1986 Code.

This part includes rulings and decisions based on provisions of
the Internal Revenue Code of 1986.

#### Part II .- Treaties and Tax Legislation.

This part is divided into two subparts as follows: Subpart A, Tax
Conventions and Other Related Items, and Subpart B, Legisla-
tion and Related Committee Reports.

Part III .- Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these sub-
jects are contained in the other Parts and Subparts. Also in-
cluded in this part are Bank Secrecy Act Administrative Rulings.
Bank Secrecy Act Administrative Rulings are issued by the De-
partment of the Treasury's Office of the Assistant Secretary (En-
forcement).

#### Part IV .- Items of General Interest.

This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.

The first Bulletin for each month includes a cumulative index for
the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the first Bulletin of the succeeding semiannual pe-
riod, respectively.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402.

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## Part I. Rulings and Decisions Under the Internal Revenue Code of 1986

### Section 62 .- Adjusted Gross Income Defined

26 CFR 1.62-2: Reimbursements and other expense
allowance arrangements.

Rules are set forth authorizing the Commissioner
to establish a method under which a taxpayer may sub-
stantiate the amount of incidental expenses paid or in-
curred while traveling away from home by means of
an allowance in lieu of substantiating the actual cost.
See REG-141832-02, page 921.

### Section 274 .- Disallowance of Certain Entertainment, etc., Expenses

26 CFR 1.274-5: Substantiation requirements.

T.D. 9020

DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 1

### Substantiation of Incidental Expenses

AGENCY: Internal Revenue Service
(IRS), Treasury.

ACTION: Final and temporary
regulations.

SUMMARY: This document contains
amendments to regulations relating to the
requirement to substantiate business ex-
penses for traveling expenses while away
from home. The regulations affect taxpay-
ers who deduct expenses for incidental ex-
penses while traveling away from home.
The text of the temporary regulations also
serves as text for the proposed regula-
tions set forth in the notice of proposed rule-
making (REG-141832-02) on this subject
in this issue of the Bulletin.

DATES: Effective Date: These regula-
tions are effective November 12, 2002.

Applicability Date: For dates of appli-
cability, see § 1.274-5T(m).

FOR
FURTHER
INFORMATION
CONTACT: John Moriarty (202) 622-
4930 (not a toll-free call).

### SUPPLEMENTARY INFORMATION: Background and Explanation of Provisions

Section 274(d) provides that a taxpayer
is not allowed a deduction or credit for cer-
tain expenses unless the expense is sub-
stantiated. These substantiation requirements
apply to deductions under section 162 or
212 for any traveling expense (including
meals and lodging) while away from home.
Under section 274(d), the Secretary may is-
sue regulations that provide that some or
all of the substantiation requirements will
not apply to expenses that do not exceed
a prescribed amount. Section 1.274-5(j)(1)
of the regulations permits the Commis-
sioner to establish a method under which
a taxpayer may substantiate the amount of
meal expenses paid or incurred while trav-
eling away from home by means of an al-
lowance in lieu of substantiating the actual
cost of meals.

Under this authority, the Commissioner
has provided a method for taxpayers to sub-
stantiate deductible costs of business meal
and incidental expenses while away from
home by means of an allowance. See Rev.
Proc. 2001-47, 2001-2 C.B. 332. These
temporary regulations amend § 1.274-5T to
authorize the Commissioner to establish a
method under which a taxpayer may sub-
stantiate the amount of incidental expenses
paid or incurred while traveling away from
home by means of an allowance in lieu of
substantiating the actual cost. The tax-
payer will not be relieved of the require-
ment to substantiate the actual cost of other
travel expenses as well as the time, place
and business purpose of the travel.

#### Special Analyses

It has been determined that this Trea-
sury decision is not a significant regula-
tory action as defined in Executive Order
12866. Therefore, a regulatory assessment
is not required. It is hereby certified that
these regulations will not have a signifi-
cant economic impact on a substantial num-
ber of small entities. This certification is
based upon the fact that these regulations
do not require a collection of information

and do not impose any new or different re-
quirements on small entities. Therefore, a
Regulatory Flexibility Analysis under the
Regulatory Flexibility Act (5 U.S.C. chap-
ter 6) is not required. Pursuant to section
7805(f) of the Internal Revenue Code, these
temporary regulations will be submitted to
the Chief Counsel for Advocacy of the
Small Business Administration for com-
ment on their impact.

#### Drafting Information

The principal author of these regula-
tions is John Moriarty, Office of Associ-
ate Chief Counsel (Income Tax &
Accounting). However, other personnel from
the IRS and Treasury Department partici-
pated in their development.

* * * * *

#### Adoption of Amendments to the Regulations

Accordingly, 26 CFR part 1 is amended
as follows:

PART 1-INCOME TAXES

Paragraph 1. The authority citation for
part 1 is amended by adding an entry in nu-
merical order to read in part as follows:

Authority: 26 U.S.C. 7805 * * *

Section 1.274-5 also issued under 26
U.S.C. 274(d). * * *

Par. 2. Section 1.274-5 is amended by
adding paragraph (j)(3) to read as follows:

§ 1.274-5 Substantiation requirements.

* * * * *
(j) * * *

(3) [Reserved]. For further guidance, see
§ 1.274-5T(j)(3).

Par. 3. Section 1.274-5T is amended by
revising paragraph (j) and the last sen-
tence of paragraph (m) to read as follows:

§ 1.274-5T Substantiation requirements
(temporary).

* * * * *

(j)(1) and (2) [Reserved]. For further
guidance, see § 1.274-5(j)(1) and (2).

(3) Incidental expenses while traveling
away from home. The Commissioner may
establish a method under which a taxpayer
may use a specified amount or amounts for

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incidental expenses paid or incurred while
traveling away from home in lieu of sub-
stantiating the actual cost of incidental ex-
penses. The taxpayer will not be relieved
of the requirement to substantiate the ac-
tual cost of other travel expenses as well
as the time, place, and business purpose of
the travel.

(m) * * * Paragraph (j)(3) of this sec-
tion applies to expenses paid or incurred af-
ter September 30, 2002.

Robert E. Wenzel,
Deputy Commissioner of
Internal Revenue.

Approved October 31, 2002.

Pamela F. Olson,
Assistant Secretary of the Treasury.

(Filed by the Office of the Federal Register on November 8,
2002, 8:45 a.m., and published in the issue of the Federal Reg-
ister for November 12, 2002, 67 F.R. 68512)

## Section 483 .- Interest on Certain Deferred Payments

26 CFR 1.483-1: Computation of interest on cer-
tain deferred payments.

As defined by section 1274A, the definitions for
both "qualified debt instruments" and "cash method
debt instruments" have dollar ceilings on the stated
principal amount. The limits to the stated principal
amount are adjusted for inflation for sales or ex-
changes occurring in the 2003 calendar year. See Rev.
Rul. 2002-79, on this page.

### Section 1274 .- Determination of Issue Price in the Case of Certain Debt Instruments Is- sued for Property

26 CFR 1.1274A-1: Special rules for certain trans-
actions where stated principal amount does not ex-
ceed $2,800,000.

As defined by section 1274A, the definitions for
both "qualified debt instruments" and "cash method
debt instruments" have dollar ceilings on the stated
principal amount. The limits to the stated principal
amount are adjusted for inflation for sales or ex-
changes occurring in the 2003 calendar year. See Rev.
Rul. 2002-79, on this page.

Section 1274A .- Special
Rules for Certain Transactions
Where Stated Principal
Amount Does Not Exceed
$2,800,000.

(Also §§ 1274, 483; 1.1274A-1, 1.483-1.)

Section 1274A - Inflation adjusted num-
bers for 2003. This ruling provides the dol-
lar amounts, increased by the 2003 inflation
adjustment, for section 1274A of the Code.
Rev. Rul. 2001-65 supplemented and su-
perseded.

## Rev. Rul. 2002-79

This revenue ruling provides the dol-
lar amounts, increased by the 2003 infla-
tion adjustment, for § 1274A of the Internal
Revenue Code.

### BACKGROUND

In general, §§ 483 and 1274 determine
the principal amount of a debt instrument
given in consideration for the sale or ex-
change of nonpublicly traded property. In
addition, any interest on a debt instru-
ment subject to § 1274 is taken into ac-
count under the original issue discount
provisions of the Code. Section 1274A,
however, modifies the rules under §§ 483
and 1274 for certain types of debt instru-
ments.

In the case of a "qualified debt instru-
ment," the discount rate used for purposes
of §§ 483 and 1274 may not exceed 9 per-
cent, compounded semiannually. Section
1274A(b) defines a qualified debt instru-
ment as any debt instrument given in con-
sideration for the sale or exchange of
property (other than new § 38 property
within the meaning of § 48(b), as in ef-
fect on the day before the date of enact-
ment of the Revenue Reconciliation Act of
1990) if the stated principal amount of the
instrument does not exceed the amount
specified in § 1274A(b). For debt instru-
ments arising out of sales or exchanges be-
fore January 1, 1990, this amount is
$2,800,000.

In the case of a "cash method debt in-
strument," as defined in § 1274A(c), the
borrower and lender may elect to use the
cash receipts and disbursements method of
accounting. In particular, for any cash

method debt instrument, § 1274 does not
apply, and interest on the instrument is ac-
counted for by both the borrower and the
lender under the cash method of account-
ing. A cash method debt instrument is a
qualified debt instrument that meets the fol-
lowing additional requirements: (A) In the
case of instruments arising out of sales or
exchanges before January 1, 1990, the stated
principal amount does not exceed
$2,000,000; (B) the lender does not use an
accrual method of accounting and is not a
dealer with respect to the property sold or
exchanged; (C) § 1274 would have ap-
plied to the debt instrument but for an elec-
tion under § 1274A(c); and (D) an election
under § 1274A(c) is jointly made with re-
spect to the debt instrument by the bor-
rower and lender. Section 1.1274A-1(c)(1)
of the Income Tax Regulations provides
rules concerning the time for, and man-
ner of, making this election.

Section 1274A(d)(2) provides that, for
any debt instrument arising out of a sale or
exchange during any calendar year after
1989, the dollar amounts stated in
§ 1274A(b) and § 1274A(c)(2)(A) are in-
creased by the inflation adjustment for the
calendar year. Any increase due to the in-
flation adjustment is rounded to the near-
est multiple of $100 (or, if the increase is
a multiple of $50 and not of $100, the in-
crease is increased to the nearest multiple
of $100). The inflation adjustment for any
calendar year is the percentage (if any) by
which the CPI for the preceding calendar
year exceeds the CPI for calendar year
1988. Section 1274A(d)(2)(B) defines the
CPI for any calendar year as the average
of the Consumer Price Index as of the close
of the 12-month period ending on Septem-
ber 30 of that calendar year.

## INFLATION-ADJUSTED AMOUNTS

For debt instruments arising out of sales
or exchanges after December 31, 1989, the
inflation-adjusted amounts under § 1274A
are shown in Table 1.

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Rev. Rul. 2002-79 Table 1 Inflation-Adjusted Amounts Under § 1274A

Calendar Year of

1274A(b) Amount

1274A(c)(2)(A) Amount

Sale or Exchange

(qualified debt instrument)

(cash method debt instrument)

1990

$2,933,200

$2,095,100

1991

$3,079,600

$2,199,700

1992

$3,234,900

$2,310,600

1993

$3,332,400

$2,380,300

1994

$3,433,500

$2,452,500

1995

$3,523,600

$2,516,900

1996

$3,622,500

$2,587,500

1997

$3,723,800

$2,659,900

1998

$3,823,100

$2,730,800

1999

$3,885,500

$2,775,400

2000

$3,960,100

$2,828,700

2001

$4,085,900

$2,918,500

2002

$4,217,500

$3,012,500

2003

$4,280,800

$3,057,700

Note: These inflation adjustments were computed using the All-Urban, Consumer Price Index, 1982-1984 base, published by
the Bureau of Labor Statistics.

## EFFECT ON OTHER DOCUMENTS

Rev. Rul. 2001-65, 2001-2 C.B. 639, is
supplemented and superseded.

## DRAFTING INFORMATION

The author of this revenue ruling is
Avital Grunhaus of the Office of the As-
sociate Chief Counsel (Financial Institu-
tions and Products). For further information
regarding this revenue ruling, please con-
tact Mrs. Grunhaus at (202) 622-3930 (not
a toll-free call).

## Section 6043 .- Liquidating, etc., Transactions

26 CFR 1.6043-4T: Information returns relating to cer-
tain acquisitions of control and changes in capital
structure (temporary)

## T. D. 9022

DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Parts 1 and 602

### Information Reporting Relating to Taxable Stock Transactions

AGENCY: Internal Revenue Service
(IRS), Treasury.

ACTION: Temporary regulations.

SUMMARY: This document contains tem-
porary regulations under section 6043(c) re-
quiring information reporting by a
corporation if control of the corporation is
acquired or if the corporation has a recapi-
talization or other substantial change in capi-
tal structure. This document also contains
temporary regulations under section 6045
concerning information reporting require-
ments for brokers with respect to transac-
tions described in section 6043(c). The text
of these temporary regulations also serves
as the text of proposed regulations (REG-
143321-02) set forth in this issue of the
Bulletin.

DATES: Effective Date: These regula-
tions are effective on November 18, 2002.

Applicability Dates: For dates of appli-
cability, see §§ 1.6043-4T(i) and 1.6045-
3T(f).

FOR
FURTHER
INFORMATION
CONTACT: Nancy Rose at (202) 622-
4910 (not a toll-free number).

## SUPPLEMENTARY INFORMATION:

### Paperwork Reduction Act

These regulations are being issued with-
out prior notice and public procedure pur-
suant to the Administrative Procedure Act
(5 U.S.C. 553). For this reason, the col-
lection of information contained in these
regulations has been reviewed and, pend-
ing receipt and evaluation of public com-
ments, approved by the Office of
Management and Budget under control
number 1545-1812. Responses to this col-
lection of information are mandatory.

An agency may not conduct or spon-
sor, and a person is not required to re-
spond to, a collection of information unless
the collection of information displays a valid
OMB control number.

For further information concerning this
collection of information, and where to sub-
mit comments on the collection of infor-
mation and the accuracy of the estimated
burden, and suggestions for reducing this
burden, please refer to the preamble to the
cross-referencing notice of proposed rule-
making published in this issue of the Bul-
letin.

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Books or records relating to a collec-
tion of information must be retained as long
as their contents may become material in
the administration of any internal revenue
law. Generally, tax returns and tax return
information are confidential, as required by
26 U.S.C. 6103.

### Background and Explanation of Provisions

Section 6043(c) provides that if any per-
son acquires control of a corporation, or if
there is a recapitalization or other substan-
tial change in capital structure of a corpo-
ration, the corporation, when required by
the Secretary, shall make a return setting
forth the identity of the parties to the trans-
action, the fees involved, the changes in the
capital structure involved, and such other
information as the Secretary may require
with respect to such transaction.

Proposed regulations under section
6043(c) were previously published in the
Federal Register on July 5, 1990 (CO-5-
90, 1990-2 C.B. 686 [55 FR 27648]) (the
1990 proposed regulations). After consid-
ering issues raised in public comments and
the reporting burdens placed on corporate
taxpayers under the 1990 proposed regu-
lations, the Internal Revenue Service de-
cided to withdraw the 1990 proposed
regulations on October 16, 1992 (Notice
92-51, 1992-2 C.B. 381 [57 FR 47428]).
At that time, the IRS stated that the value
of the information that would be collected
under the 1990 proposed regulations did not
justify the burden to the public in comply-
ing with the rules. The IRS further stated
that it might promulgate regulations un-
der section 6043(c) if it became apparent
that the information would be needed to ad-
minister the tax system properly.

At this time, the IRS believes that in-
formation reporting under section 6043(c)
for certain large corporate transactions is ap-
propriate. The transactions covered by this
reporting requirement are acquisitions of
control and substantial changes in the capi-
tal structure of a corporation. The tempo-
rary regulations require a corporation to
attach a form to its income tax return de-
scribing these transactions, and to file in-
formation returns with respect to certain
shareholders in such transactions. Dupli-
cate reporting is not intended; thus, the
regulations provide that no reporting is re-
quired under this section where reporting
is required under another section. The text

of these temporary regulations also serves
as the text of the proposed regulations set
forth in the cross-referencing notice of pro-
posed rulemaking (REG-143321-02) pub-
lished in this issue of the Bulletin. The
preamble to that notice of proposed rule-
making invites public comments with re-
spect to the potential for duplicate reporting
under this section. That preamble also in-
vites comments with respect to the bur-
den of compliance with the reporting
requirements.

These temporary regulations require a
domestic corporation involved in certain
large taxable transactions to file Form 8806
reporting and describing such transactions.
The corporation must attach Form 8806 to
its timely filed income tax return. If Form
8806 is not available at least 90 days prior
to the due date (including extensions) of the
corporation's income tax return for the year
in which the acquisition of control or the
substantial change in capital structure oc-
curs or at least 90 days before such re-
turn is timely filed (whichever is sooner),
the regulation allows a corporation to make
the report by attaching an interim state-
ment to its return containing certain re-
quired information.

The temporary regulations define an ac-
quisition of control of a corporation as a
transaction or series of related transac-
tions in which stock representing control of
that corporation is distributed by a sec-
ond corporation or in which stock repre-
senting control of that corporation is
acquired (directly or indirectly) by a sec-
ond corporation and the shareholders of the
first corporation receive cash, stock or other
property. For these purposes, control is de-
termined in accordance with the first sen-
tence of section 304(c)(1). With certain
limitations, the constructive ownership rules
of section 318(a) apply to determine own-
ership. Acquisitions of control within an af-
filiated group are excepted from this
definition, as are acquisitions in which the
fair market value of the stock acquired in
the transaction or series of related trans-
actions is less than $100,000,000.

Under the temporary regulations, a cor-
poration has a substantial change in its capi-
tal structure if the corporation in a
transaction or series of related transac-
tions (a) undergoes a recapitalization with
respect to its stock, (b) redeems its stock,
(c) merges, consolidates or otherwise com-
bines with another entity or transfers sub-

stantially all of its assets to one or more
entities, (d) transfers all or part of its as-
sets to another corporation in a title 11 or
similar case and, in pursuance of the plan,
distributes stock or securities of that cor-
poration, or (e) changes its identity, form
or place of organization. Transactions in
which the amount of any cash plus the fair
market value of any property (including
stock) provided to shareholders of the cor-
poration is less than $100,000,000 are ex-
cepted from this definition, as are
transactions within an affiliated group.

The temporary regulations also require
a domestic corporation involved in the
specified transactions to issue, with re-
spect to each of its shareholders, a Form
1099-CAP reporting the amount of any
cash plus the fair market value of any prop-
erty (including stock) provided to the share-
holder in the transaction. Corporations are
not required to report amounts distributed
to certain exempt recipients or the fair mar-
ket value of any stock provided to a share-
holder if the corporation reasonably
determines that the receipt of such stock
would not cause the shareholder to recog-
nize gain (if any). Further, transactions and
distributions already reported under other
sections are not subject to reporting un-
der these regulations.

Penalties under section 6652(l) may be
imposed for failing to file required re-
turns under section 6043(c) (including fail-
ure to file on magnetic media, as required
under section 6011(e) and § 1.6011-2). The
penalty under section 6652(l) is $500 for
each day the failure continues, but the to-
tal amount imposed with respect to a re-
turn cannot exceed $100,000. The
temporary regulations provide that the in-
formation returns required under these regu-
lations shall be treated as one return for
purposes of the section 6652(l) penalty, so
that the penalty shall not exceed $500 per
day ($100,000 in total) with respect to any
acquisition of control or change in capital
structure. Further, as provided in section
6652(l), such penalty does not apply if the
failure is due to reasonable cause. Until
regulations are promulgated under sec-
tion 6652(l) to set forth specific standards
for determining reasonable cause, the IRS
will use the reasonable cause standards set
forth in § 301.6724-1 of this chapter as a
guideline for determining reasonable cause.

Section 1.6045-3T requires a broker
who, as the record holder of stock, re-

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ceives a Form 1099-CAP from a corpora-
tion pursuant to the reporting requirements
of § 1.6043-4T, to file a Form 1099-CAP
with respect to the actual owner and fur-
nish such Form 1099-CAP to the actual
owner.

The temporary regulations are effec-
tive only for acquisitions of control and sub-
stantial changes of capital structure that
occur after December 31, 2001, and for
which the reporting corporation or any
shareholder is required to recognize gain (if
any) as a result of the application of sec-
tion 367(a). The cross-referencing pro-
posed regulations published in this issue of
the Bulletin will apply to all acquisitions
of control and substantial changes in capi-
tal structure occurring after the date that
such regulations are published as final regu-
lations (regardless of whether section 367(a)
applies).

### Special Analyses

It has been determined that this Trea-
sury decision is not a significant regula-
tory action as defined in Executive Order
12866. Therefore, a regulatory assessment
is not required. It has also been determined
that section 553(b) of the Administrative
Procedure Act (5 U.S.C. chapter 5) does not
apply to these regulations. For the appli-
cability of the Regulatory Flexibility Act (5
U.S.C. chapter 6), refer to the Special
Analyses section of the preamble to the
cross-referencing notice of proposed rule-
making published in this issue of the Bul-
letin. Pursuant to section 7805(f) of the
Internal Revenue Code, these temporary
regulations will be submitted to the Chief
Counsel for Advocacy of the Small Busi-
ness Administration for comment on its im-
pact on small businesses.

### Drafting Information

The principal author of these tempo-
rary regulations is Nancy L. Rose, Office
of Associate Chief Counsel (Procedure and
Administration). However, other person-
nel from the IRS and Treasury Depart-
ment participated in their development.

* * * * * *

### Amendments to the Regulations

Accordingly, 26 CFR parts 1 and 602 are
amended as follows:

## PART 1-INCOME TAXES

Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805* * *

Par. 2. Section 1.6043-4T is added to
read as follows:

§ 1.6043-4T Information returns relating
to certain acquisitions of control and
changes in capital structure (temporary).

(a) Information returns for an acquisi-
tion of control or a substantial change in
capital structure-(1) General rule. If there
is an acquisition of control (as defined in
paragraph (c) of this section) or a substan-
tial change in the capital structure (as de-
fined in paragraph (d) of this section) of a
domestic corporation ("reporting corpora-
tion"), the reporting corporation must file
a completed Form 8806 (or any succes-
sor form) in accordance with the instruc-
tions to that form. Form 8806 will request
the information required in paragraphs
(a)(1)(i) through (v) of this section.

(i) Reporting corporation. Provide the
name, address, and taxpayer identifica-
tion number (TIN) of the reporting corpo-
ration;

(ii) Common parent, if any, of the re-
porting corporation. If the reporting cor-
poration was a subsidiary member of an
affiliated group filing a consolidated re-
turn immediately prior to the acquisition of
control or the substantial change in capi-
tal structure, provide the name, address, and
TIN of the common parent of that affili-
ated group;

(iii) Acquiring corporation. Provide the
name, address and TIN of any corpora-
tion that acquired control of the reporting
corporation within the meaning of para-
graph (c) of this section or combined with
or received assets from the reporting cor-
poration pursuant to a substantial change in
capital structure within the meaning of para-
graph (d) of this section ("acquiring cor-
poration"). State whether the acquiring
corporation is foreign (as defined in sec-
tion 7701(a)(5)) or is a dual resident cor-
poration (as defined in § 1.1503-2(c)(2)).
In either case, state whether the acquiring
corporation was newly formed prior to its
involvement in the transaction.

(iv) Common parent, if any, of acquir-
ing corporation. If the acquiring corpora-
tion named in paragraph (a)(1)(iii) of this

section was a subsidiary member of an af-
filiated group filing a consolidated return
immediately prior to the acquisition of con-
trol or the substantial change in capital
structure, provide the name, address, and
TIN of the common parent of that affili-
ated group.

(v) Information about acquisition of con-
trol or substantial change in capital struc-
ture. Provide-

(A) A description of the transaction or
transactions that gave rise to the acquisi-
tion of control or the substantial change in
capital structure of the corporation;

(B) The date or dates of the transac-
tion or transactions that gave rise to the ac-
quisition of control or the substantial change
in capital structure;

(C) A description of and a statement of
the fair market value of any stock pro-
vided to the reporting corporation's share-
holders in exchange for their stock if the
reporting corporation reasonably deter-
mines that the shareholders are not re-
quired to recognize gain (if any) from the
receipt of such stock for U.S. federal in-
come tax purposes; and

(D) A statement of the aggregate amount
of cash plus the fair market value of any
property (including stock if the reporting
corporation reasonably determines that its
shareholders would be required to recog-
nize gain (if any) on the receipt of such
stock, but excluding stock described in para-
graph (a)(1)(v)(C) of this section) pro-
vided to the reporting corporation's
shareholders in exchange for their stock.

(2) Time for making return. Form 8806
(or an interim statement, as set forth in para-
graph (a)(3) of this section) must be at-
tached to the reporting corporation's timely
filed income tax return (taking extensions
into account) for the year in which the ac-
quisition of control or substantial change in
capital structure occurs.

(3) Interim statement. If Form 8806 has
not been made available at least 90 days be-
fore the due date (including extensions) of
the reporting corporation's income tax re-
turn for the year in which the acquisition
of control or substantial change in capital
structure occurs or at least 90 days be-
fore such return is timely filed (which-
ever is sooner), the reporting corporation
shall attach a statement to its return con-
taining the information described in para-
graphs (a)(1)(i) through (v) of this section.

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(4) Coordination with other sections. (i)
No reporting is required under paragraph
(a) of this section with respect to a trans-
action for which information is required to
be filed pursuant to §§ 1.351-3(b), 1.355-
5(a), or 1.368-3(a), provided the transac-
tion is properly reported in accordance with
those sections.

(ii) No reporting is required under para-
graph (a) of this section with respect to a
transaction for which information is re-
quired to be reported pursuant to section
6043(a), provided the transaction is prop-
erly reported in accordance with that sec-
tion.

(5) Exception where shareholders are ex-
empt recipients. No reporting is required un-
der paragraph (a) of this section if the
reporting corporation reasonably deter-
mines that all of its shareholders who re-
ceive cash, stock or other property pursuant
to the acquisition of control or substantial
change in capital structure are exempt re-
cipients under paragraph (b)(6) of this sec-
tion.

(b) Information returns regarding
shareholders-(1) General rule. A corpo-
ration that is required to file Form 8806 pur-
suant to paragraph (a)(1) of this section (or
an interim statement under paragraph (a)(3)
of this section) shall file a return of infor-
mation on Forms 1096 and 1099-CAP with
respect to each shareholder of record in the
corporation (before or after the acquisi-
tion of control or the substantial change in
capital structure) who receives cash, stock,
or other property pursuant to the acquisi-
tion of control or the substantial change in
capital structure.

(2) Additional requirement for informa-
tion returns. A corporation that would have
been required to file Form 8806 pursuant
to paragraph (a) of this section (or an in-
terim statement under paragraph (a)(3) of
this section) but for the application of para-
graph (a)(4)(i) of this section (relating to
information provided under §§ 1.351-3(b),
1.355-5(a), or 1.368-3(a)) shall file a re-
turn of information on Forms 1096 and
1099-CAP with respect to each shareholder
of record in the corporation (before or af-
ter the acquisition of control or the sub-
stantial change in capital structure) who
receives cash, stock, or other property pur-
suant to the acquisition of control or the
substantial change in capital structure.

(3) Time for making information re-
turns. Forms 1096 and 1099-CAP must be

filed on or before February 28 (March 31
if filed electronically) of the year follow-
ing the calendar year in which the acqui-
sition of control or the substantial change
in capital structure occurs.

(4) Contents of return. A separate Form
1099-CAP must be filed with respect to
amounts received by each shareholder (who
is not an exempt recipient as defined in
paragraph (b)(6) of this section) showing-

(i) The name, address, telephone num-
ber and TIN of the reporting corporation;

(ii) The name, address and TIN of the
shareholder;

(iii) The number and class of shares in
the reporting corporation exchanged by the
shareholder;

(iv) The amount of cash and the fair
market value of any stock (other than stock
described in paragraph (a)(1)(v)(C)) of this
section or other property provided to the
shareholder in exchange for its stock; and

(v) Such other information as may be
required by the instructions to Form 1099-
CAP.

(5) Furnishing of forms to sharehold-
ers. The Form 1099-CAP filed with re-
spect to each shareholder must be furnished
to such shareholder on or before January
31 of the year following the calendar year
in which the shareholder receives cash,
stock, or other property as part of the ac-
quisition of control or the substantial change
in capital structure.

(6) Exempt recipients. A corporation is
not required to file a Form 1099-CAP pur-
suant to this paragraph (b) of this section
with respect to the following shareholders:

(i) Any shareholder who receives solely
stock described in paragraph (a)(1)(v)(C) of
this section in exchange for its stock in the
corporation.

(ii) Any shareholder who is required to
recognize gain (if any) as a result of the re-
ceipt of cash, stock, or other property if the
corporation reasonably determines that the
amount of such cash plus the fair market
value of such stock and other property does
not exceed $1,000. Stock described in para-
graph (a)(1)(v)(C) of this section is not
taken into account for purposes of this para-
graph (b)(6)(ii).

(iii) Any shareholder described in para-
graphs (b)(6)(iii)(A) through (K) of this sec-
tion if the corporation has actual knowledge
that the shareholder is described in one of
paragraphs (b)(6)(iii)(A) through (K) of this
section or if the corporation has a prop-

erly completed exemption certificate from
the shareholder (as provided in
§ 31.3406(h)-3 of this chapter). The cor-
poration also may treat a shareholder as de-
scribed in paragraphs (b)(6)(iii) (A) through
(J) of this section based on the applicable
indicators described in § 1.6049-4(c)(1)(ii).

(A) A tax-exempt organization, as de-
scribed in § 1.6049-4(c)(1)(ii)(B)(1).

(B) An individual retirement plan, as de-
scribed in § 1.6049-4(c)(1)(ii)(C).

(C) The United States, as described in
§ 1.6049-4(c)(1)(ii)(D).

(D) A state, as described in § 1.6049-
4(c)(1)(ii)(E).

(E) A foreign government, as described
in § 1.6049-4(c)(1)(ii)(F).

(F) An international organization, as de-
scribed in § 1.6049-4(c)(1)(ii)(G).

(G) A foreign central bank of issue, as
described in § 1.6049-4(c)(1)(ii)(H).

(H) A real estate investment trust, as de-
scribed in § 1.6049-4(c)(1)(ii)(J).

(I) An entity registered under the In-
vestment Company Act of 1940, as de-
scribed in § 1.6049-4(c)(1)(ii)(K).

(J) A common trust fund, as described
in § 1.6049-4(c)(1)(ii)(L).

(K) A corporation, as defined in sec-
tion 7701(a)(3) (except for corporations for
which an election under section 1362(a) is
in effect), if the reporting corporation rea-
sonably determines that such corporation is
not a broker (as defined in § 1.6045-1(a)(1))
or a record holder for the actual owner of
the stock.

(iv) Any shareholder that the corpora-
tion, prior to the transaction, associates with
documentation upon which the corpora-
tion may rely in order to treat payments to
the shareholder as made to a foreign ben-
eficial owner in accordance with § 1.1441-
1(e)(1)(ii) or as made to a foreign payee in
accordance with § 1.6049-5(d)(1) or pre-
sumed to be made to a foreign payee un-
der § 1.6049-5(d)(2) or (3). For purposes
of this paragraph (b)(6)(iv), the provisions
in § 1.6049-5(c) (regarding rules appli-
cable to documentation of foreign status and
definition of U.S. payor and non-U.S.
payor) shall apply. The provisions of
§ 1.1441-1 shall apply by substituting the
terms "corporation" and "shareholder" for
the terms "withholding agent" and "payee"
and without regard to the fact that the pro-
visions apply only to amounts subject to
withholding under chapter 3 of the Inter-
nal Revenue Code. The provisions of

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§ 1.6049-5(d) shall apply by substituting the
terms "corporation" and "shareholder" for
the terms "payor" and "payee". Nothing in
this paragraph (b)(6)(iv) shall be construed
to relieve a corporation of its withholding
obligations under section 1441.

(v) Any shareholder if, on January 31 of
the year following the calendar year in
which the shareholder receives cash, stock,
or other property, the corporation did not
know and did not have reason to know that
the shareholder received such cash, stock,
or other property in a transaction or se-
ries of related transactions that would re-
sult in an acquisition of control or a
substantial change in capital structure.

(7) Coordination with other sections. No
reporting is required under paragraph (b) of
this section with respect to amounts that are
required to be reported under section 6042
or section 6045, unless the corporation
knows or has reason to know that such
amounts are not properly reported in ac-
cordance with those sections.

(c) Acquisition of control of a
corporation-(1) In general. For purposes
of this section, an acquisition of control of
a corporation ("first corporation") occurs if,
in a transaction or series of related trans-
actions, either-

(i) Stock representing control of the first
corporation is distributed by a second cor-
poration to shareholders of the second cor-
poration and the fair market value of such
stock on the date of distribution is
$100,000,000 or more; or

(ii) (A) Before an acquisition of stock
of the first corporation (directly or indi-
rectly) by a second corporation, the sec-
ond corporation does not have control of
the first corporation;

(B) After the acquisition, the second cor-
poration has control of the first corpora-
tion;

(C) The fair market value of the stock
acquired in the transaction and in any re-
lated transactions as of the date or dates on
which such stock was acquired is
$100,000,000 or more; and

(D) The shareholders of the first corpo-
ration (determined without applying the con-
structive ownership rule of section 318(a))
receive cash, stock, or other property pur-
suant to the acquisition.

(2) Control. For purposes of this sec-
tion, control is determined in accordance
with the first sentence of section 304(c)(1).

(3) Constructive ownership. (i) Except
as otherwise provided in this section, the
constructive ownership rules of section
318(a) (except for section 318(a)(4), pro-
viding for constructive ownership through
an option to acquire stock), modified as pro-
vided in section 304(c)(3)(B), shall apply
for determining whether there has been an
acquisition of control.

(ii) The determination of whether there
has been an acquisition of control shall be
made without regard to whether the per-
son or persons from whom control was ac-
quired retain indirect control of the first
corporation under section 318(a).

(iii) For purposes of paragraph (c)(1)(ii)
of this section, section 318(a) shall not ap-
ply to cause a second corporation to be
treated as owning, before an acquisition of
stock in a first corporation (directly or in-
directly) by the second corporation, any
stock that is acquired in the first corpora-
tion. For example, if the shareholders of a
domestic corporation form a new holding
company and then transfer their shares in
the domestic corporation to the new hold-
ing company, the new holding company
shall not be treated as having control of the
domestic corporation before the acquisi-
tion. The new holding company acquires
control of the domestic corporation as a re-
sult of the transfer. Similarly, if the share-
holders of a domestic parent corporation
transfer their shares in the parent corpora-
tion to a subsidiary of the parent in ex-
change for shares in the subsidiary, the
subsidiary shall not be treated as having
control of the parent before the transac-
tion. The subsidiary acquires control of the
parent as a result of the transfer.

(4) Corporation includes group. For pur-
poses of this paragraph (c), if two or more
corporations act pursuant to a plan or ar-
rangement with respect to acquisitions of
stock, such corporations will be treated as
one corporation for purposes of this sec-
tion. Whether two or more corporations act
pursuant to a plan or arrangement depends
on the facts and circumstances.

(5) Section 338 election. For purposes
of this paragraph (c), an acquisition of stock
of a corporation with respect to which an
election under section 338 is made is treated
as an acquisition of stock (and not as an ac-
quisition of the assets of such corpora-
tion).

(d) Substantial change in capital struc-
ture of a corporation-(1) In general. A

corporation has a substantial change in capi-
tal structure if it has a change in capital
structure (as defined in paragraph (d)(2) of
this section) and the amount of any cash
and the fair market value of any property
(including stock) provided to the share-
holders of such corporation pursuant to the
change in capital structure, as of the date
or dates on which the cash or other prop-
erty is provided, is $100,000,000 or more.

(2) Change in capital structure. For pur-
poses of this section, a corporation has a
change in capital structure if the corpora-
tion in a transaction or series of
transactions-

(i) Undergoes a recapitalization with re-
spect to its stock;

(ii) Redeems its stock (including
deemed redemptions);

(iii) Merges, consolidates or other-
wise combines with another corporation or
transfers all or substantially all of its as-
sets to one or more corporations;

(iv) Transfers all or part of its assets to
another corporation in a title 11 or simi-
lar case and, in pursuance of the plan, dis-
tributes stock or securities of that
corporation; or

(v) Changes its identity, form or place
of organization.

(e) Reporting by successor entity. If a
corporation ("transferor") transfers all or
substantially all of its assets to another en-
tity ("transferee") in a transaction that con-
stitutes a substantial change in the capital
structure of transferor, transferor must sat-
isfy the reporting obligations in paragraph
(a) or (b) of this section. If transferor does
not satisfy the reporting obligations in para-
graph (a) or (b) of this section, then trans-
feree must satisfy those reporting
obligations. If neither transferor nor trans-
feree satisfies the reporting obligations in
paragraphs (a) and (b) of this section, then
transferor and transferee shall be jointly and
severally liable for any applicable penal-
ties (see paragraph (g) of this section).

(f) Receipt of property. For purposes of
this section, a shareholder is treated as re-
ceiving property (or as having property pro-
vided to it) pursuant to an acquisition of
control or a substantial change in capital
structure if a liability of the shareholder is
assumed in the transaction and, as a re-
sult of the transaction, an amount is real-
ized by the shareholder from the sale or
exchange of stock.

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(g) Penalties for failure to file. For pen-
alties for failure to file as required under
this section, see section 6652(l). The in-
formation returns required to be filed un-
der paragraphs (a) and (b) of this section
shall be treated as one return for purposes
of section 6652(l) and, accordingly, the pen-
alty shall not exceed $500 for each day the
failure continues (up to a maximum of
$100,000) with respect to any acquisition
of control or any substantial change in capi-
tal structure. Failure to file as required un-
der this section also includes the
requirement to file on magnetic media as
required by section 6011(e) and § 1.6011-2.
In addition, criminal penalties under sec-
tions 7203, 7206, and 7207 may apply in
appropriate cases.

(h) Examples. The following examples
illustrate the application of the rules of this
section. For purposes of these examples, as-
sume the transaction is not reported un-
der §§ 1.351-3(b), 1.355-5(a), 1.368-3(a),
and sections 6042, 6043(a), or 6045, un-
less otherwise specified, and assume that the
fair market value of the consideration pro-
vided to the shareholders exceeds
$100,000,000.

Example 1. The shareholders of X, a domestic cor-
poration and parent of an affiliated group, exchange
their X stock for stock in Y, a newly-formed for-
eign holding corporation. After the transaction, Y owns
all the outstanding X stock. The X shareholders must
recognize gain (if any) on the exchange of their stock
as a result of the application of section 367(a). Be-
cause the transaction results in an acquisition of con-
trol of X, X must comply with the rules in paragraphs
(a) and (b) of this section. If a statement is filed in
accordance with § 1.351-3(b) with respect to the trans-
action, X is not required to attach Form 8806 (or an
interim statement) to its return. Regardless of whether
a statement is filed in accordance with § 1.351-
3(b), X must file a Form 1099-CAP with respect to
each shareholder who is not an exempt recipient show-
ing the fair market value of the Y stock received by
that shareholder, and X must furnish a copy of the
Form 1099-CAP to that shareholder.

Example 2. C, a domestic corporation, and par-
ent of an affiliated group merges into D, an unre-
lated domestic corporation. Pursuant to the transaction,
the C shareholders exchange their C stock for D stock
or for a combination of short term notes and D stock.
The transaction does not satisfy the requirements of
section 368, and the C shareholders must recognize
gain (if any) on the exchange. Because the transac-
tion results in a substantial change in the capital struc-
ture of C, C (or D as the successor to C) must comply
with the rules in paragraphs (a) and (b) of this sec-
tion. C must attach Form 8806 (or an interim state-
ment) to its final income tax return. C (or D as the
successor to C) also must file a Form 1099-CAP with
respect to each shareholder who is not an exempt re-
cipient showing the fair market value of the short term
notes (if any) and the fair market value of the D stock

provided to that shareholder, and C (or D) must fur-
nish a copy of the Form 1099-CAP to that share-
holder.

Example 3. (i) The facts are the same as in Ex-
ample (2), except that C reasonably determines that-

(A) The transaction satisfies the requirements of
section 368;

(B) The C shareholders who exchange their C
stock solely for D stock will not be required to rec-
ognize gain (if any) on the exchange; and

(C) The C shareholders who exchange their C
stock for a combination of short term notes and D
stock will be required to recognize gain (if any) on
the exchange solely with respect to the receipt of the
short term notes.

(ii) If a statement is filed in accordance with
§ 1.368-3(a) with respect to the transaction, C is not
required to attach Form 8806 (or an interim state-
ment) to its return under paragraph (a) of this sec-
tion. Regardless of whether a statement is filed in
accordance with § 1.368-3(a), C (or D as the suc-
cessor to C) must comply with the rules in para-
graph (b) of this section. With respect to each
shareholder who receives a combination of short term
notes and D stock, and who is not an exempt recipi-
ent, C or D must file a Form 1099-CAP showing the
fair market value of the short term notes provided to
the shareholder, and C (or D) must furnish a copy of
the Form 1099-CAP to that shareholder. The Form
1099-CAP should not show the fair market value of
the D stock provided to the shareholder. C and D are
not required to file and furnish Forms 1099-CAP with
respect to shareholders who receive only D stock in
exchange for their C stock.

Example 4. The facts are the same as in Example
3, except the C shareholders receive cash instead of
short term notes. The C shareholders exchange their
shares through a transfer agent. Under section 6045,
the transfer agent is required to report the amount of
cash paid to the C shareholders in the transaction. C
and D are not required to file information returns un-
der paragraph (b) of this section, unless C or D knows
or has reason to know that the transfer agent did not
file the required information returns under section 6045.

(i) Effective date. This section applies to
any acquisition of control and any substan-
tial change in capital structure occurring af-
ter December 31, 2001, if the reporting
corporation or any shareholder is required
to recognize gain (if any) as a result of the
application of section 367(a) as a result of
the transaction. If a reporting corporation
described in the preceding sentence files its
income tax return for the year in which the
acquisition of control or the substantial
change in capital structure occurs on or be-
fore January 13, 2003, such reporting cor-
poration (or successor entity) shall file an
interim statement (as described in para-
graph (a)(3) of this section) on or before
January 31, 2003. The applicability of this
section expires on November 14, 2005.

Par 3. Section 1.6045-3T is added to
read as follows:

§ 1.6045-3T Information reporting for
an acquisition of control or a substan-
tial change in capital structure (tem-
porary).

(a) In general. Any broker (as defined
in § 1.6045-1(a)(1)) who receives a Form
1099-CAP from a corporation pursuant to
§ 1.6043-4T as the record holder of stock
in such corporation but who is not the ac-
tual owner thereof shall file a return of in-
formation with respect to the actual owner
unless the actual owner is an exempt re-
cipient as defined in § 1.6045-1(c)(3)(i).

(b) Form, manner and time for mak-
ing information returns. The return re-
quired by paragraph (a) of this section must
be on Forms 1096 and 1099-CAP, or on an
acceptable substitute statement. Such forms
must be filed on or before February 28
(March 31 if filed electronically) of the year
following the calendar year in which the ac-
quisition of control or the substantial change
in capital structure occurs.

(c) Contents of return. A separate Form
1099-CAP must be prepared for each owner
showing-

1\. The name, address and taxpayer iden-
tification number of the actual owner;

2\. The number and class of shares in the
corporation exchanged by the actual owner;

3\. The amount of cash and the fair mar-
ket value of stock or other property pro-
vided to the actual owner in exchange for
its stock, that would have been reported by
the corporation under § 1.6043-4T if the
corporation had provided the Form 1099-
CAP directly to the actual owner (rather
than to the broker as nominee); and

4\. Such other information as may be re-
quired by Form 1099-CAP.

(d) Furnishing of forms to actual own-
ers. The Form 1099-CAP prepared for each
actual owner must be furnished to the ac-
tual owner on or before February 28 of the
year following the calendar year in which
the actual owner receives stock, cash or
other property.

(e) Single Form 1099. If a broker is re-
quired to file a Form 1099 with respect to
an owner under both this § 1.6045-3T and
§ 1.6045-1(b), the broker may satisfy the
requirements of both sections by filing and
furnishing one Form 1099 that contains all
the relevant information, as provided in the
instructions to Form 1099-CAP.

(f) Effective date. This section applies
with respect to any Form 1099-CAP re-
ceived by a broker after November 13,

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2002\. The applicability of this section ex-
pires on November 14, 2005.

# PART 602-OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT

Par 4. The authority citation for part 602
continues to read in part as follows:
Authority: 26 U.S.C. 7805

Par 5. In section 602.101, paragraph (b)
is amended by adding the following en-

tries in numerical order to the table to read
as follows:

§ 602.101 OMB Control numbers

* * * * *

(b) * * *

CFR part or section where identified and described

Current OMB control No.

* * * * *

1.6043-4T

1545-1812

* * * * *

1.6045-3T

1545-1812

* * * * *

Robert E. Wenzel,
Deputy Commissioner of
Internal Revenue.

Approved November 8, 2002.

Pamela F. Olson,
Assistant Secretary of the
Treasury (Tax Policy).

(Filed by the Office of the Federal Register on November 13,
2002, 4:24 p.m., and published in the issue of the Federal Reg-
ister for November 18, 2002, 67 F.R. 69468)

# Section 7872 .- Treatment of Loans With Below-Market Interest Rates

Section 7872(g) - Inflation adjusted num-
bers for 2003. This ruling provides the dollar amounts,
increased by the 2003 inflation adjustment, for sec-
tion 7872(g) of the Code. Rev. Rul. 2001-64 supple-
mented and superseded.

Rev. Rul. 2002-78

This revenue ruling publishes the amount
that § 7872(g) of the Internal Revenue Code
permits a taxpayer to lend to a qualifying
continuing care facility without incurring
imputed interest. The amount is adjusted for
inflation for the years after 1986.

Section 7872 generally treats loans bear-
ing a below-market interest rate as if they
bore interest at the market rate.

Section 7872(g)(1) provides that, in gen-
eral, § 7872 does not apply for any calen-
dar year to any below-market loan made by
a lender to a qualified continuing care fa-
cility pursuant to a continuing care con-
tract if the lender (or the lender's spouse)
attains age 65 before the close of the year.

Section 7872(g)(2) provides that, in the
case of loans made after October 11, 1985,
and before 1987, § 7872(g)(1) applies only
to the extent that the aggregate outstand-
ing amount of any loan to which § 7872(g)
applies (determined without regard to

§ 7872(g)(2)), when added to the aggre-
gate outstanding amount of all other pre-
vious loans between the lender (or the
lender's spouse) and any qualified continu-
ing care facility to which § 7872(g)(1) ap-
plies, does not exceed $90,000.

Section 7872(g)(5) provides that, for
loans made during any calendar year af-
ter 1986 to which § 7872(g)(1) applies, the
$90,000 limit specified in § 7872(g)(2) is
increased by an inflation adjustment. The
inflation adjustment for any calendar year
is the percentage (if any) by which the Con-
sumer Price Index (CPI) for the preced-
ing calendar year exceeds the CPI for
calendar year 1985. Section 7872(g)(5)
states that the CPI for any calendar year is
the average of the CPI as of the close of
the 12-month period ending on Septem-
ber 30 of that calendar year.

Table 1 sets forth the amount speci-
fied in § 7872(g)(2) of the Code. The
amount is increased by the inflation ad-
justment for the years 1987-2003.

REV. RUL. 2002-78 TABLE 1 Limit under 7872 (g) (2)

Year

Amount

Before 1987

$ 90,000

1987

$ 92,200

1988

$ 94,800

1989

$ 98,800

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REV. RUL. 2002-78 TABLE 1 - Continued Limit under 7872 (g) (2)

Year

Amount

1990

$103,500

1991

$108,600

1992

$114,100

1993

$117,500

1994

$121,100

1995

$124,300

1996

$127,800

1997

$131,300

1998

$134,800

1999

$137,000

2000

$139,700

2001

$144,100

2002

$148,800

2003

$151,000

Note: These inflation adjustments were computed using the All-Urban, Consumer Price Index 1982-1984 base,
published by the Bureau of Labor Statistics.

## EFFECT ON OTHER DOCUMENTS

Rev. Rul. 2001-64, 2001-2 C.B. 640, is
supplemented and superseded.

## DRAFTING INFORMATION

The author of this revenue ruling is
Avital Grunhaus of the Office of the
Associate Chief Counsel (Financial Insti-
tutions and Products). For further informa-
tion regarding this revenue ruling, please
contact Mrs. Grunhaus at (202) 622-3940
(not a toll-free call).

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# Part III. Administrative, Procedural, and Miscellaneous

Tax Treatment of Residential
Grants Made by the Lower
Manhattan Development
Corporation to Individuals and
Families Affected by the
September 11, 2001,
Disaster

## Notice 2002-76

### PURPOSE

This notice provides answers to fre-
quently asked questions regarding the tax
treatment of Residential Grant Program
grants the Lower Manhattan Development
Corporation (the LMDC) makes to indi-
viduals and families who occupy rental units
or owner-occupied units in areas near the
site of the September 11, 2001, attack on
the World Trade Center.

### BACKGROUND

#### Residential Grant Program

The LMDC, a subsidiary of the Em-
pire State Development Corporation, which
is a public benefit corporation of the State
of New York, was created in the after-
math of the September 11, 2001, attack on
the World Trade Center. In cooperation with
city, state, and federal agencies, the LMDC
developed the Residential Grant Program
to offer financial assistance to individuals
who reside, or will reside, in areas near the
site of the World Trade Center disaster. The
LMDC received its funding for the Resi-
dential Grant Program from the United
States Department of Housing and Urban
Development. The LMDC's Partial Ac-
tion Plan, as amended on September 25,
2002, and implemented on September 26,
2002, describes the Residential Grant Pro-
gram.

The Partial Action Plan divides the ar-
eas closest to the World Trade Center di-
saster site into three zones (Zone 1, Zone
2, and Zone 3). These three zones corre-
spond generally to the locations of those
residents who experienced the most expo-
sure to the effects of the disaster.

The LMDC Residential Grant Program
offers three types of grants to families and
individuals residing in areas closest to the
World Trade Center disaster. The first grant

is a one-time $1,000 grant available only
to residents who occupied a housing unit
in Zone 1, 2, or 3 before September 11,
2001, and continue to live there through the
date of their application and the date of the
award.

The second grant is for families with one
or more children under the age of 18 mak-
ing a 1-year commitment to occupy rental
units or owner-occupied housing in Zone
1, 2, or 3 ("family grants"). These grants
are available regardless of whether the grant
recipient resided in Zone 1, 2, or 3 on Sep-
tember 11, 2001. The one-time grant
amount is $1,500 if the unit is in Zone 1
and $750 if the unit is in Zone 2 or 3. The
Partial Action Plan states that the family
grants are intended to compensate fami-
lies for the extra expenses they incurred or
will incur because of the continuing ef-
fects of the September 11, 2001, disaster.
The family grants are expected to be rea-
sonably commensurate with the extra rea-
sonable and necessary personal, living, and
family expenses that grant recipients have
incurred or will incur as a result of the Sep-
tember 11, 2001, disaster, from the time
they commenced residing in Zone 1, 2, or
3 through the first anniversary after the
grant is made, excluding personal, living,
or family expenses that are reimbursed from
other sources, including the Federal Emer-
gency Management Agency ("FEMA") and
private insurance.

The third grant is for individuals mak-
ing a 2-year commitment to occupy rental
units or owner-occupied housing in Zone
1 or 2 ("2-year commitment grant pro-
gram"). These grants are available regard-
less of whether the grant recipient resided
in Zone 1 or 2 on September 11, 2001. In
general, these grants equal 30 percent of
monthly rent or, for owner-occupied units,
30 percent of mortgage payments, main-
tenance, and real estate and related taxes.
The maximum grant amount is $12,000
over 2 years for Zone 1 units, and $6,000
over 2 years for Zone 2 units. The mini-
mum grant amount is $4,000 over 2 years
for units in Zone 1 and $2,000 over 2 years
for units in Zone 2.

The Partial Action Plan states that the
minimum grants ($4,000 per unit in Zone
1 and $2,000 per unit in Zone 2) are in-
tended to compensate those residents who
incurred or will incur extra expenses be-

cause of the continuing effects of the Sep-
tember 11, 2001, disaster. The minimum
grant amounts are expected to be reason-
ably commensurate with the extra reason-
able and necessary personal, living, or
family expenses that grant recipients have
incurred or will incur as a result of the Sep-
tember 11, 2001, disaster, from the time
they commenced residing in Zone 1 or 2
through the second anniversary after the ini-
tial grant payment is made, excluding per-
sonal, living, or family expenses that are
reimbursed from other sources, including
FEMA and private insurance.

#### Overview of the General Welfare Exclusion and Information Reporting Requirements

Section 61(a) of the Internal Revenue
Code provides that, except as otherwise pro-
vided by law, gross income means all in-
come from whatever source derived. The
Internal Revenue Service, however, has con-
sistently held that payments by govern-
mental units under legislatively provided
social benefit programs for the promotion
of the general welfare are not includible in
a recipient's gross income (general wel-
fare exclusion). See e.g., Rev. Rul. 74-
205, 1974-1 C.B. 20; Rev. Rul. 98-19,
1998-1 C.B. 840. To qualify under the ad-
ministrative general welfare exclusion, the
payments must (i) be made from a gov-
ernmental fund, (ii) be for the promotion
of general welfare (based on need), and (iii)
not represent compensation for services.
Rev. Rul. 75-246, 1975-1 C.B. 24; Rev.
Rul. 82-106, 1982-1 C.B. 16.

Governmental payments to help indi-
viduals and families meet disaster-related
expenses are based on need. For example,
Rev. Rul. 76-144, 1976-1 C.B. 17, holds
that grants made under the Disaster Re-
lief Act of 1974 to help individuals or fami-
lies affected by a disaster meet extraordinary
disaster-related necessary expenses or se-
rious needs in the categories of medical,
dental, housing, personal property, trans-
portation, or funeral expenses (and not in
the categories of nonessential, decorative,
or luxury items) are excluded from gross
income under the general welfare exclu-
sion. In this context, because "need" is not
defined in terms of financial need, the gen-
eral welfare exclusion applies equally to all
residents of an affected area regardless of

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their income levels. In the absence of a di-
saster, however, governmental payments
made without regard to financial status,
health, educational background, or employ-
ment status are not based on need and, thus,
do not qualify under the general welfare ex-
clusion. See Rev. Rul. 76-131, 1976-1 C.B.
16; and Rev. Rul. 85-39, 1985-1 C.B. 21.

The Victims of Terrorism Tax Relief Act
of 2001, Pub. L. No. 107-134, 115 Stat.
2427 (2001), added § 139 to the Code. Sec-
tion 139(b)(4) codifies (but does not sup-
plant) the administrative general welfare
exclusion for certain disaster relief pay-
ments to individuals. Because "of the ex-
traordinary circumstances surrounding a
qualified disaster, it is anticipated that in-
dividuals will not be required to account for
actual expenses in order to qualify for the
[§ 139] exclusion, provided that the amount
of the payments can be reasonably ex-
pected to be commensurate with the ex-
penses incurred." Joint Committee on
Taxation Staff, Technical Explanation of the
"Victims of Terrorism Tax Relief Act of
2001," as Passed by the House and Sen-
ate on December 20, 2001, 107th Cong.,
1st Sess. (2001). As under § 139, the Ser-
vice will not require individuals to ac-
count for actual disaster-related expenses for
governmental payments to qualify under the
administrative general welfare exclusion if
the amount of the payments can be rea-
sonably expected to be commensurate with
the expenses incurred.

Under § 6041 and the regulations there-
under, any person (including an agency of
a state or its political subdivisions) en-
gaged in a trade or business and making
payments in the course of such trade or
business to another person of fixed or de-
terminable gains, profits, or income of $600
or more during a calendar year must pro-
vide an information return setting forth the
amount of such gains, profits, and income,
and the name and address of the recipient
of the payment.

## QUESTIONS AND ANSWERS

Q-1. Are the one-time $1,000 grants ex-
cluded from gross income?

A-1. Yes. The one-time $1,000 grants
are excluded from grant recipients' gross
income under the general welfare exclu-
sion. These grants are intended to compen-
sate individuals for the extra reasonable and
necessary personal, living, and family ex-
penses they incur as a result of the ef-

fects of residing in the area of the World
Trade Center disaster and are expected to
be commensurate with the expenses in-
curred. The $1,000 one-time grants also
qualify for exclusion from gross income un-
der § 139.

Q-2. Are the family grants and the mini-
mum grants under the 2-year commitment
grant program excluded from gross in-
come?

A-2. Yes. The family grants ($1,500 for
units in Zone 1 and $750 for units in Zone
2 or 3) and the minimum grant amounts
($4,000 for units in Zone 1 and $2,000 for
units in Zone 2) under the 2-year commit-
ment grant program are excluded from gross
income under the general welfare exclu-
sion. These grants qualify under the gen-
eral welfare exclusion because these grants
are intended to compensate individuals for
unreimbursed extra reasonable and neces-
sary personal, living, and family expenses
they incur as a result of the continuing ef-
fects of the World Trade Center disaster and
are expected to be commensurate with the
expenses incurred. The family grants and
the minimum grant amounts also qualify for
exclusion from gross income under § 139.

Q-3. Are the payments in excess of the
minimum grant amounts under the 2-year
commitment grant program excluded from
gross income?

A-3. No. The payments in excess of
$4,000 for Zone 1 units and in excess of
$2,000 for Zone 2 units under the 2-year
commitment grant program do not qualify
for exclusion from gross income under the
general welfare exclusion or any other pro-
vision of law. These payments are distin-
guishable from the other grant payments
under the Residential Grant Program be-
cause these payments are not intended to
compensate individuals for the extra rea-
sonable and necessary personal, living, and
family expenses they incur as a result of
residing in the area of the World Trade Cen-
ter disaster. In addition, these payments are
made regardless of any other needs-based
criterion (for example, financial status,
health, educational background, or employ-
ment status of the individual recipient).
Grant recipients must include the remain-
ing grant amounts under the 2-year com-
mitment grant program in gross income
under § 61(a).

Q-4. Must grant recipients maintain
records of the extra personal, living, and
family disaster-related expenses they in-

curred to exclude from gross income un-
der the general welfare exclusion payments
of the one-time $1,000 grants, the family
grants, and the minimum grant amounts un-
der the 2-year commitment grant program?

A-4. No. Grant recipients are not re-
quired to maintain records of the extra per-
sonal, living, and family disaster-related
expenses they incurred to exclude from
gross income under the general welfare ex-
clusion payments of the one-time $1,000
grants, the family grants, and the mini-
mum grant amounts under the 2-year com-
mitment grant program.

Q-5. Are payments of the one-time
$1,000 grants, the family grants, and the
minimum grants under the 2-year commit-
ment grant program subject to informa-
tion reporting by the LMDC?

A-5. No. Payments of the following
grants:

(1) the one-time $1,000 grants;

(2) the family grants ($1,500 for units
in Zone 1 and $750 for units in Zone 2 or
3); and

(3) the minimum grant amounts under
the 2-year commitment grant program
($4,000 for units in Zone 1 and $2,000 for
units in Zone 2) are not subject to infor-
mation reporting because these payments are
excluded from gross income under the gen-
eral welfare exclusion.

Q-6. Are the payments in excess of the
minimum grant amounts under the 2-year
commitment grant program subject to in-
formation reporting?

A-6. Yes. Because payments in excess
of the minimum grant amounts under the
2-year commitment grant program must be
included in gross income, LMDC must file
with the Service and furnish to a grant re-
cipient a Form 1099-G, Certain Govern-
ment Payments, if the grant recipient
receives $600 or more of such payments
during a calendar year.

## DRAFTING INFORMATION

The principal author of this notice is
Shareen Soltanzadeh Pflanz of the Office
of Associate Chief Counsel (Income Tax &
Accounting). For further information re-
garding this notice, contact Shareen Pflanz
at (202) 622-4920 (not a toll-free call).

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Tables for Figuring Amount
Exempt from Levy on Wages,
Salary, and Other Income

Notice 2002-78

1\. Table for Figuring Amount Exempt
From Levy on Wages, Salary, and Other
Income (Forms 668-W(c) and 668-
W(c)(DO)) 2003

Publication 1494, shown below, pro-
vides tables that show the amount of an in-

dividual's income that is exempt from a
notice of levy used to collect delinquent tax
in 2003.

(Amounts are for each pay period.)

Filing Status: Single

Pay Period

Number of Exemptions Claimed on Statement

1

2

3

4

5

6

More Than 6

Daily

30.00

41.73

53.46

65.19

76.92

88.65

18.27 plus 11.73 for each exemption

Weekly

150.00

208.65

267.31

325.96

384.62

443.27

91.35 plus 58.65 for each exemption

Biweekly

300.00

417.31

534.62

651.92

769.23

886.54

182.69 plus 117.31 for each exemption

Semi- Monthly

325.00

452.08

579.17

706.25

833.33

960.42

197.92 plus 127.08 for each exemption

Monthly

650.00

904.17

1158.33

1412.50

1666.67

1920.83

395.83 plus 254.16 for each exemption

Filing Status: Unmarried Head of Household

Pay Period

Number of Exemptions Claimed on Statement

1

2

3

4

5

6

More Than 6

Daily

38.65

50.38

62.12

73.85

85.58

97.31

26.92 plus 11.73 for each exemption

Weekly

193.27

251.92

310.58

369.23

427.88

486.54

134.62 plus 58.65 for each exemption

Biweekly

386.54

503.85

621.15

738.46

855.77

973.08

269.23 plus 117.31 for each exemption

Semi- Monthly

418.75

545.83

672.92

800.00

927.08

1054.17

291.67 plus 127.08 for each exemption

Monthly

837.50

1091.67

1345.83

1600.00

1854.17

2108.33

583.33 plus 254.16 for each exemption

Filing Status: Married Filing Joint Return (and Qualifying Widow(er)s)

Pay Period

Number of Exemptions Claimed on Statement

1

2

3

4

5

6

More Than 6

Daily

42.31

54.04

65.77

77.50

89.23

100.96

30.58 plus 11.73 for each exemption

Weekly

211.54

270.19

328.85

387.50

446.15

504.81

152.88 plus 58.65 for each exemption

Biweekly

423.08

540.38

657.69

775.00

892.31

1009.62

305.77 plus 117.31 for each exemption

Semi- Monthly

458.33

585.42

712.50

839.58

966.67

1093.75

331.25 plus 127.08 for each exemption

Monthly

916.67

1170.83

1425.00

1679.17

1933.33

2187.50

662.50 plus 254.16 for each exemption

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Filing Status: Married Filing Separate Return

Pay Period

Number of Exemptions Claimed on Statement

1

2

3

4

5

6

More Than 6

Daily

27.02

38.75

50.48

62.21

73.94

85.67

15.29 plus 11.73 for each exemption

Weekly

135.10

193.75

252.40

311.06

369.71

428.37

76.44 plus 58.65 for each exemption

Biweekly

270.19

387.50

504.81

622.12

739.42

856.73

152.88 plus 117.31 for each exemption

Semi- Monthly

292.71

419.79

546.88

673.96

801.04

928.13

165.62 plus 127.08 for each exemption

Monthly

585.42

839.58

1093.75

1347.92

1602.08

1856.25

331.25 plus 254.16 for each exemption

# 2. Table for Figuring Additional Exempt Amount for Taxpayers at Least 65 Years Old and/or Blind Additional Exempt Amount

Filing Status

*

Daily

Wkly

Bi-Wkly

Semi-Mo

Monthly

Single or Head of

1

4.42

22.12

44.23

47.92

95.83

Household

2

8.85

44.23

88.46

95.83

191.67

Any Other Filing

1

3.65

18.27

36.54

39.58

79.17

Status

2

7.31

36.54

73.08

79.17

158.33

3

10.96

54.81

109.62

118.75

237.50

4

14.62

73.08

146.15

158.33

316.67

\* ADDITIONAL STANDARD DEDUCTION claimed on Parts 3, 4, & 5 of levy.

## Examples

These tables show the amount exempt
from a levy on wages, salary, and other in-
come.

1\. A single taxpayer who is paid weekly
and claims three exemptions (including one
for the taxpayer) has $267.31 exempt from
levy.

2\. If the taxpayer in number 1 is over
65 and writes 1 in the ADDITIONAL
STANDARD DEDUCTION space on Parts
3, 4, & 5 of the levy, $289.43 is exempt
from this levy ($267.31 plus $22.12).

3\. A taxpayer who is married, files
jointly, is paid biweekly, and claims two ex-
emptions (including one for the taxpayer)
has $540.38 exempt from levy.

4\. If the taxpayer in number 3 is over
65 and has a spouse who is blind, this tax-
payer should write 2 in the ADDITIONAL
STANDARD DEDUCTION space on Parts
3, 4, & 5 of the levy. Then, $613.46 is ex-
empt from this levy ($540.38 plus $73.08).

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## Part IV. Items of General Interest

Notice of Proposed Rule-
making by Cross-Reference
to Temporary Regulations

### Substantiation of Incidental Expenses

#### REG-141832-02

AGENCY: Internal Revenue Service
(IRS), Treasury.

ACTION: Notice of proposed rulemak-
ing and notice of proposed rulemaking by
cross-reference to temporary regulations.

SUMMARY: This document contains pro-
posed amendments to regulations relating
to the requirement to substantiate busi-
ness expenses for traveling expenses away
from home. In T.D. 9020 in this issue of
the Bulletin, the IRS is issuing temporary
regulations relating to the requirement to
substantiate business expenses for travel-
ing expenses while away from home un-
der section 274 of the Internal Revenue
Code. The text of those regulations also
serves as text for these proposed regula-
tions. This document also contains pro-
posed regulations amending the regulations
under section 62 to conform the cross-
reference to the regulations under section
274.

DATES: Written or electronic comments
and requests for a public hearing must be
received by February 6, 2003.

ADDRESSES: Send submissions to:
CC:ITA:RU (REG-141832-02), room 5226,
Internal Revenue Service, POB 7604, Ben
Franklin Station, Washington, DC 20044.
Submissions may be hand delivered Mon-
day through Friday between the hours of
8 a.m. and 5 p.m. to: CC:ITA:RU (REG-
141832-02), Courier's Desk, Internal Rev-
enue Service, 1111 Constitution Avenue,
NW, Washington, DC. Alternatively, tax-
payers may submit electronic comments di-
rectly to the IRS Internet site at
www.irs.gov/regs.

FOR FURTHER INFORMATION
CONTACT: Concerning the proposed regu-

lations, John Moriarty, (202) 622-4930;
concerning submissions of comments and/or
requests for a public hearing, LaNita Van
Dyke, (202) 622-7180 (not toll-free num-
bers).

#### SUPPLEMENTARY INFORMATION:

##### Background and Explanation of Provisions

Final and temporary regulations in this
issue of the Bulletin amend the Income Tax
Regulations (26 CFR part 1) relating to sec-
tion 274. The temporary regulations au-
thorize the Commissioner to establish a
method under which a taxpayer may use a
specified amount or amounts for inciden-
tal expenses paid or incurred while travel-
ing away from home in lieu of
substantiating the actual cost of inciden-
tal expenses. The text of the temporary
regulations also serves, in part, as text for
these proposed regulations. The preamble
to the temporary regulations explains the
amendment.

##### Special Analyses

It has been determined that this notice
of proposed rulemaking is not a signifi-
cant regulatory action as defined in Ex-
ecutive Order 12866. Therefore, a regulatory
assessment is not required. It is hereby cer-
tified that these regulations will not have
a significant economic impact on a sub-
stantial number of small entities. This cer-
tification is based upon the fact that these
regulations do not require a collection of
information and do not impose any new or
different requirements on small entities.
Therefore, a Regulatory Flexibility Analy-
sis under the Regulatory Flexibility Act (5
U.S.C. chapter 6) is not required. Pursu-
ant to section 7805(f) of the Internal Rev-
enue Code, this notice of proposed
rulemaking will be submitted to the Chief
Counsel for Advocacy of the Small Busi-
ness Administration for comment on their
impact.

##### Comments and Request for a Public Hearing

Before these proposed regulations are
adopted as final regulations, consideration
will be given to any written (a signed origi-
nal and eight (8) copies) or electronic com-
ments that are submitted timely to the IRS.

The IRS and Treasury Department request
comments on the clarity of the proposed
rules and how they can be made easier to
understand. All comments will be avail-
able for public inspection and copying. A
public hearing will be scheduled if re-
quested in writing by any person that timely
submits written comments. If a public hear-
ing is scheduled, notice of the date, time,
and place for the public hearing will be
published in the Federal Register.

##### Drafting Information

The principal author of these regula-
tions is John Moriarty, Office of Associ-
ate Chief Counsel (Income Tax &
Accounting). However, other personnel from
the IRS and Treasury Department partici-
pated in their development.

* * * * *

##### Proposed Amendments to the Regula- tions

Accordingly, 26 CFR part 1 is proposed
to be amended as follows:

###### PART 1-INCOME TAXES

Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *

Section 1.274-5 also issued under 26
U.S.C. 274(d). * * *

Par. 2. Section 1.62-2 is amended by re-
moving the last three sentences of para-
graph (e)(2) and adding two sentences in
their place to read as follows:

§ 1.62-2 Reimbursements and other
expense allowance arrangements.

* * * * *

(e) * * *

(2) * * * See § 1.274-5(g) and (j), which
grant the Commissioner the authority to es-
tablish optional methods of substantiating
certain expenses. Substantiation of the
amount of a business expense in accor-
dance with rules prescribed pursuant to the
authority granted by § 1.274-5(g) or (j) will
be treated as substantiation of the amount
of such expense for purposes of this sec-
tion.

* * * * *

Par. 3. Section 1.274-5 is amended by:
1\. Adding paragraph (j)(3).

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2\. Adding a new sentence at the end of
paragraph (m).

The additions read as follows:

###### § 1.274-5 Substantiation requirements.

[The text of proposed § 1.274-5(j)(3) and
the proposed new sentence at the end of
§ 1.274-5(m) are the same as the text of
§ 1.274-5T(j)(3) and the last sentence of
§ 1.274-5T(m) published elsewhere in this
issue of the Federal Register].

Robert E. Wenzel,
Deputy Commissioner of
Internal Revenue.

(Filed by the Office of the Federal Register on November 8,
2002, 8:45 a.m., and published in the issue of the Federal Reg-
ister for November 12, 2002, 67 F.R. 68539)

Notice of Proposed
Rulemaking by
Cross-Reference to
Temporary Regulations and
Notice of Public Hearing

### Information Reporting Relating to Taxable Stock Transactions

#### REG-143321-02

AGENCY: Internal Revenue Service
(IRS), Treasury.

ACTION: Notice of proposed rulemak-
ing by cross-reference to temporary regu-
lations and notice of public hearing.

SUMMARY: In this issue of the Bulle-
tin, IRS is issuing temporary regulations
(T.D. 9022) relating to information report-
ing relating to taxable stock transactions.
This document contains proposed regula-
tions under section 6043(c) requiring in-
formation reporting by a corporation if
control of the corporation is acquired or if
the corporation has a recapitalization or
other substantial change in capital struc-
ture. This document also contains pro-
posed regulations under section 6045
concerning information reporting require-
ments for brokers with respect to transac-
tions described in section 6043(c). The text
of the temporary regulations serves as the

text of these proposed regulations. This
document also provides notice of a pub-
lic hearing on these proposed regulations.

DATES: Written or electronic comments
must be received by February 18, 2003.
Outlines of topics to be discussed at the
public hearing scheduled for March 5, 2003,
at 10 a.m., must be received by February
12, 2003.

ADDRESSES: Send submissions to:
CC:ITA:RU (REG-143321-02), room 5226,
Internal Revenue Service, POB 7604, Ben
Franklin Station, Washington, DC 20044.
Submissions may be hand delivered Mon-
day through Friday between the hours of
8 a.m. and 5 p.m. to: CC:ITA:RU (REG-
143321-02), Courier's Desk, Internal Rev-
enue Service, 1111 Constitution Avenue,
NW, Washington, DC. Alternatively, tax-
payers may submit electronic comments di-
rectly to the IRS Internet site at:
www.irs.gov/regs. The public hearing will
be held in room 4718, Internal Revenue
Building, 1111 Constitution Avenue, NW,
Washington, DC.

FOR FURTHER INFORMATION
CONTACT: Concerning the proposed regu-
lations, Nancy L. Rose (202) 622-4910;
concerning submissions of comments, the
hearing, and/or to be placed on the build-
ing access list to attend the hearing, Treena
Garrett at (202) 622-7190 (not toll-free
numbers).

#### SUPPLEMENTARY INFORMATION:

##### Paperwork Reduction Act

The collection of information contained
in this notice of proposed rulemaking has
been submitted to the Office of Manage-
ment and Budget for review in accordance
with the Paperwork Reduction Act of 1995
(44 U.S.C. 3507(d)). Comments on the col-
lection of information should be sent to the
Office of Management and Budget, Attn:
Desk Officer for the Department of the
Treasury, Office of Information and Regu-
latory Affairs, Washington, DC 20503, with
copies to the Internal Revenue Service,
Attn: IRS Reports Clearance Officer,
W:CAR:MP:FP:S, Washington, DC 20224.
Comments on the collection of informa-

tion should be received by January 17,
2003. Comments are specifically requested
concerning:

Whether the proposed collection of in-
formation is necessary for the proper per-
formance of the functions of the Internal
Revenue Service, including whether the in-
formation will have practical utility;

The accuracy of the estimated burden as-
sociated with the proposed collection of in-
formation (see below);

How the quality, utility, and clarity of the
information to be collected may be en-
hanced;

How the burden of complying with the
proposed collection of information may be
minimized, including through the applica-
tion of automated collection techniques or
other forms of information technology;
and

Estimates of capital or start-up costs and
costs of operation, maintenance, and pur-
chase of service to provide information.

The collection of information in this pro-
posed regulation is in 26 CFR 1.6043-
4(a) and (b) and in 26 CFR 1.6045-3. The
information is required be reported to en-
sure that shareholders properly recognize
gain from corporate acquisitions and
changes in capital structure. The collec-
tion of information is mandatory. The likely
respondents are large corporations. The es-
timated total annual reporting and record-
keeping burden in proposed § 1.6043-
4(a), requiring the filing of Form 8806, is
2 hours. The estimated total annual report-
ing and recordkeeping burden in proposed
§§ 1.6043-4(b) and 1.6045-3 is 15 min-
utes for each Form 1099-CAP and 10 min-
utes for Form 1096.

The estimated annual burden per re-
spondent and/or recordkeeper will vary de-
pendent on the number of Forms 1099-
CAP required to be filed.

The estimated number of respondents
under the proposed regulations is 350. The
estimated number of respondents under the
temporary regulations, for transactions oc-
curring after December 31, 2001, is 5.

The estimated annual frequency of re-
porting on Form 8806 and Form 1096 is 1.
The estimated annual frequency of report-
ing on Form 1099-CAP is 1 for each share-
holder.

An agency may not conduct or spon-
sor, and a person is not required to re-
spond to, a collection of information unless

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<!-- PageBreak -->

it displays a valid control number assigned
by the Office of Management and Bud-
get.

Books or records relating to a collec-
tion of information must be retained as long
as their contents may become material in
the administration of any internal revenue
law. Generally, tax returns and tax return
information are confidential, as required by
26 U.S.C. 6103.

##### Background and Explanation of Provisions

Temporary regulations in this issue of the
Bulletin amend the Income Tax Regula-
tions (26 CFR Part 1) relating to sections
6043 and 6045. The temporary regula-
tions set forth information reporting re-
quirements relating to acquisitions of control
and substantial changes in capital struc-
ture. The text of those regulations also
serves as the text of these proposed regu-
lations. The preamble to the temporary regu-
lations explains the amendments and these
proposed regulations.

As set forth in the preamble to the tem-
porary regulations, public comments are
specifically invited with regard to the po-
tential for duplicate reporting under these
proposed regulations and with regard to the
burden of compliance with the reporting re-
quirements under the proposed regula-
tions.

##### Proposed Effective Date

The provisions of these regulations un-
der section 6043 are proposed to be appli-
cable for any acquisition of control and
change in capital structure occurring after
the date on which these regulations are pub-
lished in the Federal Register as final regu-
lations. The provisions of these regulations
under section 6045 are proposed to be ap-
plicable for any Form 1099-CAP received
by a broker after the date on which these
regulations are published in the Federal
Register as final regulations.

##### Special Analyses

It has been determined that this notice
of proposed rulemaking is not a signifi-
cant regulatory action as defined in Ex-
ecutive Order 12866. Therefore, a regulatory
assessment is not required. It has also been
determined that section 553(b) of the Ad-
ministrative Procedure Act (5 U.S.C. chap-
ter 5) does not apply to these regulations,
and because the regulations do not im-

pose a collection of information on small
entities, the Regulatory Flexibility Act (5
U.S.C. chapter 6) does not apply. Pursu-
ant to section 7805(f) of the Internal Rev-
enue Code, this notice of proposed
rulemaking will be submitted to the Chief
Counsel for Advocacy of the Small Busi-
ness Administration for comment on its im-
pact on small businesses.

##### Comments and Public Hearing

Before these proposed regulations are
adopted as final regulations, consideration
will be given to any electronic or written
comments (a signed original and eight (8)
copies) that are submitted timely to the IRS.
The IRS and Treasury Department request
comments on the clarity of the proposed
rules and how they can be made easier to
understand. All comments will be avail-
able for public inspection and copying. A
public hearing has been scheduled for
March 5, 2003, beginning at 10 a.m. in
room 4718, Internal Revenue Building, 1111
Constitution Avenue, NW, Washington, DC.
Because of access restrictions, visitors will
not be admitted beyond the immediate en-
trance area more than 30 minutes before the
hearing starts. For information about hav-
ing your name placed on the building ac-
cess list to attend the hearing, see the FOR
FURTHER INFORMATION CONTACT
portion of this preamble.

The rules of 26 CFR 601.601(a)(3) ap-
ply to the hearing. Persons who wish to
present oral comments must submit elec-
tronic or written comments by February 18,
2003, and an outline of the topics to be dis-
cussed and the time to be devoted to each
topic (a signed original and eight (8) cop-
ies) by February 12, 2003. A period of 10
minutes will be allotted to each person for
making comments. An agenda showing the
scheduling of the speakers will be pre-
pared after the deadline for reviewing out-
lines has passed. Copies of the agenda will
be available free of charge at the hearing.

##### Drafting Information

The principal author of this notice of
proposed rulemaking is Nancy L. Rose, Of-
fice of Associate Chief Counsel (Proce-
dure and Administration).

* * * * * *

##### Proposed Amendments to the Regulations

Accordingly, 26 CFR part 1 is proposed
to be amended as follows:

###### PART 1- INCOME TAXES

Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805* * *

Par. 2. Section 1.6043-4 is added to read
as follows:

§ 1.6043-4 Information returns relating
to certain acquisitions of control and
changes in capital structure.

[The text of proposed § 1.6043-4 is the
same as the text of § 1.6043-4T published
elsewhere in this issue of the Federal Reg-
ister]

Par. 3. Section 1.6045-3 is added to read
as follows:

§ 1.6045-3 Information reporting for
acquisitions of control or substantial
changes in capital structure.

[The text of proposed § 1.6045-3 is the
same as the text of § 1.6045-3T published
elsewhere in this issue of the Federal Reg-
ister]

Robert E. Wenzel,
Deputy Commissioner of
Internal Revenue.

(Filed by the Office of the Federal Register on November 13,
2002, 4:24 p.m., and published in the issue of the Federal Reg-
ister for November 18, 2002, 67 F.R. 69496)

# Foundations Status of Certain Organizations

## Announcement 2002-107

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 does not
indicate that the organizations have lost their

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<!-- PageFooter="December 2, 2002" -->
<!-- PageBreak -->

status as organizations described in sec- tion 501(c)(3), eligible to receive deduct- ible contributions.

Flatbush Institute for Torah Study, Inc., Brooklyn, NY Fourth Unity, Inc., Brooklyn, NY Fresh Bread Productions, Brooklyn, NY Gods Child Senior Care Pavilion, Inc., Stone Mountain, GA Greater San Diego Health Education, Inc., San Diego, CA Healing Center, Candler, NC Hearts to Feel Hands to Serve, Inc.,

Port Gamble S'Klallam Foundation, Kingston, WA

Project Helping Hand, Inc., Tyler, TX Rainbow Alliance Challenge of Northern Rhode Island, Inc., Central Falls, RI Rainbow Alliance Challenge of Southern Rhode Island, Inc., Central Falls, RI

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

Rich Tryon Ministries, Fort Royal, SC School Foundation of Community Unit School Dist. 3 Pike and Calhoun

foundations:

Actions Community Development Corpo- ration, Houston, TX

New York, NY Highway to Education Trust of Worth Township, Oaklawn, IL

Counties IL, Pleasant Hill, IL Second Chance Community Development, Inc., Lauderhill, FL

African-American Advocacy Education and

Training Consultant Group, Incorpo- rated, Syracuse, NY

Honey Bear Child Care and Learning Centers, Inc., Swartz Creek, MI Hopeville Institution, San Antonio, TX

Silent Teens Organization, Canoga Park, CA Siskiyou County Job Council, Yreka, CA Special Touch Day Care Center, Brooklyn, NY

All Helping Hands, Inc., Lake City, FL

Alpha Pi Chi Sorority Theta Lamdda Rho Chapter, St. Louis, MO

Housing Enablement and Access to Land, Inc., Central Falls, RI

Starlight Deaf Association of Alton Illinois, Alton, IL

American-Somali Council, Manassas, VA

Indus Foundation, Sudbury, MA Institute for Veteran Transition II, Fresno, CA

Stonehenge Foundation, Incorporated, Gladwyne, PA Stuart C. Dodd Institute for Social Innovation, Seattle, WA Tower of Faith Economic Development Corporation, Compton, CA

Beacon Trace Community Corporation, Pittsford, NY

Bear Mountain Learning Community, Waterford, ME

Joshaun Foundation, Inc., Penn Valley, CA Kansas Foundation for Clinical

Bia House, Palm Desert, CA

Pharmacology, Inc., Overland Park, KS

Bob Epperson Ministries, Springville, AL Caleb Development Corporation, Swampscott, MA

Kira Institute, Inc., Amherst, MA Los Angeles County Bomberos, Incorporated, Montebello, CA Meals 4 U, Grosse Pointe Woods, MI Mercy Place Ministries, Shippenburg, PA Mid-Maine Global Forum, Waterville, ME Milwaukee Institute for Biblical Studies, Inc., Milwaukee, WI Minnesota Precision Manufacturing

Universal Street Academy Community Development Association, Pittsburgh, PA Vanderbilt Asthma Sinus Allergy Program, Inc., Nashville, TN

Canon McMillan Baseball Association,

Canonsburg, PA

Western Somali Relief Agency, Inc., San Diego, CA Wishes of Life, Inc., Snellville, GA Yonkers Housing Development Corporation, Yonkers, NY

Carolina Housing Partnership

Association, Jacksonville, FL

Center for Security and Social Progress, Inc., Waban, MA

Changing Faces, Inc., Santa Maria, CA Children of Christ Outreach, Burien, WA

Association Educational Opportunities, Plymouth, MN

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 Rev- enue Service will issue a ruling or

Coats Heritage House, Inc., Elkland, PA Communities With Vision, Inc., Sorrento, FL

Mound Bayou Community Development Corporation, Incorporated, Mound Bayou, MS

Eagle Vision Society, Oklahoma City, OK Edisto Haven, Orangeburg, SC Episcopal Church of the Nativity Trust, Huntsville, AL

Mystery Weavers, Red Bluff, CA National Floor Safety Institute, Bedford, TX Noble Charitable Center, Agoura Hills, CA North Star Land Foundation, Inc., Edgartown, MA Ocean Adventures, Ltd., Prior Lake, MN On Gods Behalf Ministries, Inc., Grand Rapids, MI Peluso Family Foundation, Stockton, CA

determination letter with the revised clas- sification as to foundation status. Grant- ors and contributors may thereafter rely upon such ruling or determination letter as provided in section 1.509(a)-7 of the In- come Tax Regulations. It is not the prac- tice of the Service to announce such revised classification of foundation status in the In- ternal Revenue Bulletin.

Extended Harvest, Vancouver, WA

Eye Foundation, Readfield, ME

Fields Center, Inc., Louisville, KY

Fire Fighters Memorial Foundation, Inc., Omaha, NE

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# Definition of Terms

Revenue rulings and revenue procedures
(hereinafter referred to as "rulings") that
have an effect on previous rulings use the
following defined terms to describe the
effect:

Amplified describes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle
applied to A, and the new ruling holds
that the same principle also applies to B,
the earlier ruling is amplified. (Compare
with modified, below).

Clarified is used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.

Distinguished describes a situation
where a ruling mentions a previously
published ruling and points out an essen-
tial difference between them.

Modified is used where the substance
of a previously published position is
being changed. Thus, if a prior ruling
held that a principle applied to A but not
to B, and the new ruling holds that it

applies to both A and B, the prior ruling
is modified because it corrects a pub-
lished position. (Compare with amplified
and clarified, above).

Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used
in a ruling that lists previously published
rulings that are obsoleted because of
changes in law or regulations. A ruling
may also be obsoleted because the sub-
stance has been included in regulations
subsequently adopted.

Revoked describes situations where the
position in the previously published rul-
ing is not correct and the correct position
is being stated in the new ruling.

Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a
period of time in separate rulings. If the

new ruling does more than restate the
substance of a prior ruling, a combination
of terms is used. For example, modified
and superseded describes a situation
where the substance of a previously pub-
lished ruling is being changed in part and
is continued without change in part and it
is desired to restate the valid portion of
the previously published ruling in a new
ruling that is self contained. In this case,
the previously published ruling is first
modified and then, as modified, is super-
seded.

Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.

Suspended is used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.

# Abbreviations

The following abbreviations in current
use and formerly used will appear in
material published in the Bulletin.

A-Individual.

Acq .- Acquiescence.

B-Individual.

BE-Beneficiary.

FPH-Foreign Personal Holding Company.

F.R .- Federal Register.

FUTA-Federal Unemployment Tax Act.

FX-Foreign Corporation.

G.C.M .- Chief Counsel's Memorandum.

GE-Grantee.

GP-General Partner.

COOP-Cooperative.

GR-Grantor.

IC-Insurance Company.

CY-County.

I.R.B .- Internal Revenue Bulletin.

D-Decedent.

LE-Lessee.

TP-Taxpayer.

DC-Dummy Corporation.

LP-Limited Partner.

LR-Lessor.

TT-Trustee.

U.S.C .- United States Code.

DISC-Domestic International Sales Corporation.

DR-Donor.

O Organization.

Y-Corporation.

E-Estate.

P-Parent Corporation.

PHC-Personal Holding Company.

PO-Possession of the U.S.
PR-Partner.

PRS Partnership.

PTE-Prohibited Transaction Exemption.

Pub. L .- Public Law.

REIT-Real Estate Investment Trust.

Rev. Proc .- Revenue Procedure.

Rev. Rul .- Revenue Ruling.

S Subsidiary.

S.P.R .- Statements of Procedural Rules.
Stat .- Statutes at Large.

T-Target Corporation.

T.C .- Tax Court.

T.D .- Treasury Decision.

TFE-Transferee.

TFR-Transferor.

T.I.R .- Technical Information Release.

TR-Trust.

DE-Donee.

Del. Order-Delegation Order.

M-Minor.

Nonacq .- Nonacquiescence.

X-Corporation.

Z-Corporation.

EE-Employee.

E.O .- Executive Order.

ER-Employer.

ERISA-Employee Retirement Income Security Act.

EX-Executor.

F-Fiduciary.

FC-Foreign Country.

FICA-Federal Insurance Contributions Act.

FISC-Foreign International Sales Company.

BK-Bank.

B.T.A .- Board of Tax Appeals.

C-Individual.

C.B .- Cumulative Bulletin.

CFR-Code of Federal Regulations.

CI-City.

Ct.D .- Court Decision.

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Numerical Finding List1

Notices-Continued:

Proposed Regulation-Continued:

Bulletin 2002-26 through 2002-47

2002-46, 2002-28 I.R.B. 96

REG-134026-02, 2002-40 I.R.B. 684

2002-47, 2002-28 I.R.B. 97

Announcements:

2002-48, 2002-29 I.R.B. 130

Revenue Procedures:

2002-49, 2002-29 I.R.B. 130

2002-43, 2002-28 I.R.B. 99

2002-59, 2002-26 I.R.B. 28

2002-50, 2002-28 I.R.B. 98

2002-44, 2002-26 I.R.B. 10

2002-60, 2002-26 I.R.B. 28

2002-51, 2002-29 I.R.B. 131

2002-45, 2002-27 I.R.B. 40

2002-61, 2002-27 I.R.B. 72

2002-52, 2002-30 I.R.B. 187

2002-46, 2002-28 I.R.B. 105

2002-62, 2002-27 I.R.B. 72

2002-53, 2002-30 I.R.B. 187

2002-47, 2002-29 I.R.B. 133

2002-63, 2002-27 I.R.B. 72

2002-54, 2002-30 I.R.B. 189

2002-48, 2002-37 I.R.B. 531

2002-64, 2002-27 I.R.B. 72

2002-55, 2002-36 I.R.B. 481

2002-49, 2002-29 I.R.B. 172

2002-65, 2002-29 I.R.B. 182

2002-56, 2002-32 I.R.B. 319

2002-50, 2002-29 I.R.B. 173

2002-66, 2002-29 I.R.B. 183

2002-57, 2002-33 I.R.B. 379

2002-51, 2002-29 I.R.B. 175

2002-67, 2002-30 I.R.B. 237

2002-58, 2002-35 I.R.B. 432

2002-52, 2002-31 I.R.B. 242

2002-68, 2002-31 I.R.B. 283

2002-59, 2002-36 I.R.B. 481

2002-53, 2002-31 I.R.B. 253

2002-69, 2002-31 I.R.B. 283

2002-60, 2002-36 I.R.B. 482

2002-54, 2002-35 I.R.B. 432

2002-70, 2002-31 I.R.B. 284

2002-61, 2002-38 I.R.B. 563

2002-55, 2002-35 I.R.B. 435

2002-71, 2002-32 I.R.B. 323

2002-62, 2002-39 I.R.B. 574

2002-56, 2002-36 I.R.B. 483

2002-72, 2002-32 I.R.B. 323

2002-63, 2002-40 I.R.B. 644

2002-57, 2002-39 I.R.B. 575

2002-73, 2002-33 I.R.B. 387

2002-64, 2002-41 I.R.B. 690

2002-58, 2002-40 I.R.B. 644

2002-74, 2000-33 I.R.B. 387

2002-65, 2002-41 I.R.B. 690

2002-59, 2002-39 I.R.B. 615

2002-75, 2002-34 I.R.B. 416

2002-66, 2002-42 I.R.B. 716

2002-60, 2002-40 I.R.B. 645

2002-76, 2002-35 I.R.B. 471

2002-67, 2002-42 I.R.B. 716

2002-61, 2002-39 I.R.B. 616

2002-77, 2002-35 I.R.B. 471

2002-68, 2002-43 I.R.B. 730

2002-62, 2002-40 I.R.B. 683

2002-78, 2002-36 I.R.B. 514

2002-69, 2002-43 I.R.B. 730

2002-63, 2002-41 I.R.B. 691

2002-79, 2002-36 I.R.B. 515

2002-70, 2002-44 I.R.B. 765

2002-64, 2002-42 I.R.B. 718

2002-80, 2002-36 I.R.B. 515

2002-71, 2002-45 I.R.B. 830

2002-65, 2002-41 I.R.B. 700

2002-81, 2002-37 I.R.B. 533

2002-72, 2002-46 I.R.B. 843

2002-66, 2002-42 I.R.B. 725

2002-82, 2002-37 I.R.B. 533

2002-73, 2002-46 I.R.B. 844

2002-67, 2002-43 I.R.B. 733

2002-83, 2002-38 I.R.B. 564

2002-74, 2002-47 I.R.B. 884

2002-68, 2002-43 I.R.B. 753

2002-84, 2002-37 I.R.B. 533

2002-75, 2002-47 I.R.B. 884

2002-69, 2002-45 I.R.B. 831

2002-85, 2002-39 I.R.B. 624

Proposed Regulations:

2002-70, 2002-46 I.R.B. 845

2002-86, 2002-39 I.R.B. 624

2002-71, 2002-48 I.R.B. 850

2002-87, 2002-39 I.R.B. 624

REG-209116-89, 2002-47 I.R.B. 889

Revenue Rulings:

2002-88, 2002-38 I.R.B. 564

REG-248110-96, 2002-26 I.R.B. 19

2002-89, 2002-39 I.R.B. 626

REG-110311-98, 2002-28 I.R.B. 109

2002-38, 2002-26 I.R.B. 4

2002-90, 2002-40 I.R.B. 684

REG-103823-99, 2002-27 I.R.B. 44

2002-39, 2002-27 I.R.B. 33

2002-91, 2002-40 I.R.B. 685

REG-103829-99, 2002-27 I.R.B. 59

2002-40, 2002-27 I.R.B. 30

2002-92, 2002-41 I.R.B. 709

REG-103735-00, 2002-28 I.R.B. 109

2002-41, 2002-28 I.R.B. 75

2002-93, 2002-41 I.R.B. 709

REG-103735-00, 2002-45 I.R.B. 832

2002-42, 2002-28 I.R.B. 76

2002-94, 2002-42 I.R.B. 728

REG-103736-00, 2002-45 I.R.B. 834

2002-43, 2002-28 I.R.B. 85

2002-95, 2002-42 I.R.B. 728

REG-106457-00, 2002-26 I.R.B. 23

2002-44, 2002-28 I.R.B. 84

2002-96, 2002-43 I.R.B. 756

REG-106871-00, 2002-30 I.R.B. 190

2002-45, 2002-29 I.R.B. 116

2002-97, 2002-43 I.R.B. 757

REG-106876-00, 2002-34 I.R.B. 392

2002-46, 2002-29 I.R.B. 117

2002-98, 2002-43 I.R.B. 758

REG-106879-00, 2002-34 I.R.B. 402

2002-47, 2002-29 I.R.B. 119

2002-99, 2002-43 I.R.B. 758

REG-107524-00, 2002-28 I.R.B. 110

2002-48, 2002-31 I.R.B. 239

2002-100, 2002-44 I.R.B. 799

REG-112306-00, 2002-44 I.R.B. 767

2002-49, 2002-32 I.R.B. 288

2002-101, 2002-44 I.R.B. 800

REG-115285-01, 2002-27 I.R.B. 62

2002-50, 2002-32 I.R.B. 292

2002-102, 2002-44 I.R.B. 802

REG-115781-01, 2002-33 I.R.B. 380

2002-51, 2002-33 I.R.B. 327

2002-103, 2002-45 I.R.B. 836

REG-116644-01, 2002-31 I.R.B. 268

2002-52, 2002-34 I.R.B. 388

2002-104, 2002-45 I.R.B. 836

REG-123345-01, 2002-32 I.R.B. 321

2002-53, 2002-35 I.R.B. 427

2002-105, 2002-46 I.R.B. 872

REG-126024-01, 2002-27 I.R.B. 64

2002-54, 2002-37 I.R.B. 527

2002-106, 2002-46 I.R.B. 872

REG-136311-01, 2002-36 I.R.B. 485

2002-55, 2002-37 I.R.B. 529

REG-150313-01, 2002-44 I.R.B. 777

2002-56, 2002-37 I.R.B. 526

Court Decisions:

REG-164754-01, 2002-30 I.R.B. 212

2002-57, 2002-37 I.R.B. 526

2075, 2002-38 I.R.B. 548

REG-165868-01, 2002-31 I.R.B. 270

2002-58, 2002-38 I.R.B. 541

REG-103777-02, 2002-47 I.R.B. 889

2002-59, 2002-38 I.R.B. 557

2076, 2002-47 I.R.B. 875

REG-106359-02, 2002-34 I.R.B. 405

2002-60, 2002-40 I.R.B. 641

Notices:

REG-122564-02, 2002-26 I.R.B. 25

2002-61, 2002-40 I.R.B. 639

REG-123305-02, 2002-26 I.R.B. 26

2002-62, 2002-42 I.R.B. 710

2002-42, 2002-27 I.R.B. 36

REG-124256-02, 2002-33 I.R.B. 383

2002-63, 2002-45 I.R.B. 803

2002-43, 2002-27 I.R.B. 38

REG-124667-02, 2002-44 I.R.B. 791

2002-64, 2002-41 I.R.B. 688

2002-44, 2002-27 I.R.B. 39

REG-131478-02, 2002-47 I.R.B. 892

2002-65, 2002-43 I.R.B. 729

2002-45, 2002-28 I.R.B. 93

REG-133254-02, 2002-34 I.R.B. 412

2002-66, 2002-45 I.R.B. 812

1 A cumulative list of all revenue rulings, revenue
procedures, Treasury decisions, etc., published in
Internal Revenue Bulletins 2002-1 through 2002-25 is
in Internal Revenue Bulletin 2002-26, dated July 1, 2002.

<!-- PageFooter="December 2, 2002" -->

<!-- PageFooter="2002-48 I.R.B." -->
<!-- PageBreak -->

Revenue Rulings-Continued:

2002-67, 2002-47 I.R.B. 873
2002-68, 2002-45 I.R.B. 808

2002-69, 2002-44 I.R.B. 760

2002-71, 2002-44 I.R.B. 763
2002-72, 2002-44 I.R.B. 759
2002-73, 2002-45 I.R.B. 805

2002-74, 2002-45 I.R.B. 814

2002-75, 2002-45 I.R.B. 812

2002-76, 2002-46 I.R.B. 840

2002-77, 2002-45 I.R.B. 806

Social Security Contribution and
Benefit Base; Domestic Employee
Coverage Threshold:

2002-46, I.R.B. 871

Treasury Decisions:

8997, 2002-26 I.R.B. 6

8998, 2002-26 I.R.B. 1

8999, 2002-28 I.R.B. 78

9000, 2002-28 I.R.B. 87
9001, 2002-29 I.R.B. 128
9002, 2002-29 I.R.B. 120

9003, 2002-32 I.R.B. 294

9004, 2002-33 I.R.B. 331

9005, 2002-32 I.R.B. 290

9006, 2002-32 I.R.B. 315
9007, 2002-33 I.R.B. 349
9008, 2002-33 I.R.B. 335
9009, 2002-33 I.R.B. 328

9010, 2002-33 I.R.B. 341

9011, 2002-33 I.R.B. 356
9012, 2002-34 I.R.B. 389
9013, 2002-38 I.R.B. 542
9014, 2002-35 I.R.B. 429
9015, 2002-40 I.R.B. 642
9016, 2002-40 I.R.B. 628
9017, 2002-45 I.R.B. 815
9018, 2002-45 I.R.B. 823
9019, 2002-47 I.R.B. 874

<!-- PageFooter="2002-48 I.R.B." -->

<!-- PageFooter="December 2, 2002" -->
<!-- PageBreak -->

Finding List of Current Actions
on Previously Published Items1
Bulletin 2002-26 through 2002-47

Announcements:

98-99
Superseded by
Rev. Proc. 2002-44, 2002-26 I.R.B. 10

2000-4
Modified by
Ann. 2002-60, 2002-26 I.R.B. 28

2001-9
Superseded by
Rev. Proc. 2002-44, 2002-26 I.R.B. 10

Notices:

89-25
Modified by
Rev. Rul. 2002-62, 2002-42 I.R.B. 710
97-26
Modified and superseded by
Notice 2002-62, 2002-39 I.R.B. 574
2001-6
Superseded by

Notice 2002-63, 2002-40 I.R.B. 644

2001-62
Modified and superseded by
Notice 2002-62, 2002-39 I.R.B. 574
2002-92
Corrected by
Ann. 2002-103, 2002-45 I.R.B. 836

Proposed Regulations:

EE-79-89
Withdrawn by
REG-209116-89, 2002-47 I.R.B. 889

REG-208280-86
Withdrawn by
REG-136311-01, 2002-36 I.R.B. 485

REG-209114-90
Corrected by
Ann. 2002-65, 2002-29 I.R.B. 182

REG-209813-96
Withdrawn by
REG-106871-00, 2002-30 I.R.B. 190

REG-103823-99
Corrected by
Ann. 2002-67, 2002-30 I.R.B. 237

Ann. 2002-79, 2002-36 I.R.B. 515

REG-103829-99
Corrected by

Ann. 2002-82, 2002-37 I.R.B. 533
Ann. 2002-95, 2002-42 I.R.B. 728

REG-105885-99
Corrected by
Ann. 2002-67, 2002-30 I.R.B. 237

Proposed Regulations-Continued:

Revenue Procedures-Continued:

REG-105369-00

91-23

Clarified by

Modified and superseded by

Notice 2002-52, 2002-30 I.R.B. 187

Rev. Proc. 2002-52, 2002-31 I.R.B. 242

Corrected by

Ann. 2002-67, 2002-30 I.R.B. 237

91-26

Modified and superseded by

REG-106879-00

Rev. Proc. 2002-52, 2002-31 I.R.B. 242

Corrected by

Ann. 2002-100, 2002-44 I.R.B. 799

95-18 Superseded by

REG-118861-00

Rev. Proc. 2002-51, 2002-29 I.R.B. 175

Corrected by

Ann. 2002-67, 2002-30 I.R.B. 237

96-13

Modified and superseded by

REG-126100-00

Rev. Proc. 2002-52, 2002-31 I.R.B. 242

Withdrawn by

REG-133254-02, 2002-34 I.R.B. 412

96-14

Modified and superseded by

REG-136193-01

Rev. Proc. 2002-52, 2002-31 I.R.B. 242

Corrected by

Ann. 2002-67, 2002-30 I.R.B. 237

96-53 Amplified by

REG-136311-01

Corrected by

Rev. Proc. 2002-52, 2002-31 I.R.B. 242

Ann. 2002-94, 2002-42 I.R.B. 728

2001-12

Ann. 2002-102, 2002-44 I.R.B. 802

Obsoleted by

REG-161424-01

T.D. 9004, 2002-33 I.R.B. 331

Corrected by

2001-15

Ann. 2002-67, 2002-30 I.R.B. 237

Superseded by

REG-165706-01

Rev. Proc. 2002-64, 2002-42 I.R.B. 718

Corrected by

2001-17

Ann. 2002-67, 2002-30 I.R.B. 237 REG-165868-01

Modified and superseded by Rev. Proc. 2002-47, 2002-29 I.R.B. 133

Corrected by

2001-26

Ann. 2002-93, 2002-41 I.R.B. 709

Superseded by

REG-102740-02

Rev. Proc. 2002-53, 2002-31 I.R.B. 253

Corrected by

2001-45

Ann. 2002-67, 2002-30 I.R.B. 237

Superseded by

REG-106359-02

Rev. Proc. 2002-60, 2002-40 I.R.B. 645

Corrected by

2001-46

Ann. 2002-81, 2002-37 I.R.B. 533

Modified and amplified by

REG-108697-02

Rev. Proc. 2002-65, 2002-41 I.R.B. 700

Corrected by

2001-47

Ann. 2002-84, 2002-37 I.R.B. 533

Superseded by

REG-123305-02

Rev. Proc. 2002-63, 2002-41 I.R.B. 691

Corrected by

2001-50

Ann. 2002-69, 2002-31 I.R.B. 283

Superseded by

Revenue Procedures:

Rev. Proc. 2002-57, 2002-39 I.R.B. 575

66-50

2001-52

Modified, amplified, and superseded by

Updated by

Notice 2002-75, 2002-47 I.R.B. 884

Rev. Proc. 2002-66, 2002-42 I.R.B. 725

81-40

2001-53

Modified and superseded by

Superseded by

Notice 2002-75, 2002-47 I.R.B. 884

Rev. Proc. 2002-71, 2002-46 I.R.B. 850

88-10

2001-54

Superseded by

Superseded by

Rev. Proc. 2002-48, 2002-37 I.R.B. 531

Rev. Proc. 2002-61, 2002-39 I.R.B. 616

1 A cumulative list of current actions on previously published
items in Internal Revenue Bulletins 2002-1 through 2002-25 is
in Internal Revenue Bulletin 2002-26, dated July 1, 2002.

<!-- PageFooter="December 2, 2002" -->

<!-- PageFooter="2002-48 I.R.B." -->
<!-- PageBreak -->

## Revenue Procedures-Continued:

### 2002-9 Modified and amplified by

Rev. Proc. 2002-46, 2002-28 I.R.B. 105

Rev. Proc. 2002-65, 2002-41 I.R.B. 700
Rev. Rul. 2002-73, 2002-45 I.R.B. 805
Amplified, clarified, and modified by
Rev. Proc. 2002-54, 2002-35 I.R.B. 432

2002-13
Modified by
Rev. Proc. 2002-45, 2002-27 I.R.B. 40

2002-15
Modified and superseded by
Rev. Proc. 2002-59, 2002-39 I.R.B. 615

2002-16
Modified and superseded by
Rev. Proc. 2002-68, 2002-43 I.R.B. 753

2002-19
Amplified and clarified by

Rev. Proc. 2002-54, 2002-35 I.R.B. 432

2002-37
Clarified and modified by

Notice 2002-72, 2002-46 I.R.B. 843

2002-38

Clarified and modified by
Notice 2002-72, 2002-46 I.R.B. 843

2002-39
Clarified and modified by
Notice 2002-72, 2002-46 I.R.B. 843

## Revenue Rulings:

54-571
Obsoleted by
T.D. 9010, 2002-33 I.R.B. 341
55-534
Distinguished by
Rev. Rul. 2002-60, 2002-40 I.R.B. 641

55-606
Obsoleted by
T.D. 9010, 2002-33 I.R.B. 341
59-328
Obsoleted by
T.D. 9010, 2002-33 I.R.B. 341
64-36
Obsoleted by
T.D. 9010, 2002-33 I.R.B. 341
65-129
Obsoleted by
T.D. 9010, 2002-33 I.R.B. 341

67-197
Obsoleted by
T.D. 9010, 2002-33 I.R.B. 341

69-259
Modified and superseded by
Rev. Rul. 2002-50, 2002-32 I.R.B. 292

69-595
Obsoleted in part by
T.D. 9010, 2002-33 I.R.B. 341

Revenue Rulings-Continued:

70-608
Obsoleted in part by
T.D. 9010, 2002-33 I.R.B. 341

73-232
Obsoleted by
T.D. 9010, 2002-33 I.R.B. 341

76-225
Revoked by
REG-115781-01, 2002-33 I.R.B. 380

77-53
Obsoleted by
T.D. 9010, 2002-33 I.R.B. 341

85-50
Obsoleted by
T.D. 2002-33 I.R.B. 341

92-17
Amplified by
Rev. Rul. 2002-49, 2002-32 I.R.B. 288

92-75
Clarified by
Rev. Proc. 2002-52, 2002-31 I.R.B. 242
93-70
Obsoleted by
T.D. 9010, 2002-33 I.R.B. 341

94-76
Amplified by
Rev. Rul. 2002-42, 2002-28 I.R.B. 76

99-14
Modified and superseded by
Rev. Rul. 2002-69 2002-44 I.R.B. 760

2002-46
Modified by
Rev. Rul. 2002-73, 2002-45 I.R.B. 805

Treasury Decisions:

8869
Corrected by
Ann. 2002-106, 2002-46 I.R.B. 872

8925
Corrected by
Ann. 2002-89, 2002-39 I.R.B. 626

8997
Corrected by
Ann. 2002-68, 2002-31 I.R.B. 283

8999
Corrected by
Ann. 2002-71, 2002-32 I.R.B. 323

9013
Corrected by
Ann. 2002-83, 2002-38 I.R.B. 564

2002-48 I.R.B.

<!-- PageFooter="December 2, 2002" -->
<!-- PageBreak -->

# INDEX

## Internal Revenue Bulletins 2002-26 through 2002-47

The abbreviation and number in paren-
thesis following the index entry refer to
the specific item; numbers in roman and
italic type following the parenthesis refer
to the Internal Revenue Bulletin in which
the item may be found and the page num-
ber on which it appears.

Key to Abbreviations:

Ann
CD

Announcement
Court Decision

DO
Delegation Order

EO

Executive Order

PL

PTE

RP
RR

Public Law
Prohibited Transaction
Exemption
Revenue Procedure
Revenue Ruling

SPR

Statement of Procedural
Rules

TC
TD

TDO

Tax Convention
Treasury Decision
Treasury Department Order

# EMPLOYEE PLANS

Accident and health plans, amounts
received (RR 58) 38, 541
Defined benefit plans:

Covered compensation tables for 2003,
permitted disparity (RR 63) 45, 803
Elimination of optional forms of ben-
efit (Notice 46) 28, 96

Employee Plans Compliance Resolution
System (EPCRS) update (RP 47) 29,
133

Full funding limitations, weighted aver-
age interest rate for:

July 2002 (Notice 49) 29, 130

August 2002 (Notice 57) 33, 379

September 2002 (Notice 61) 38, 563

October 2002 (Notice 68) 43, 730
November 2002 (Notice 74) 47, 884
Health reimbursement arrangements
(HRAs) (RR 41) 28, 75; (Notice 45)
28, 93

# EMPLOYEE PLANS- Cont.

Individual retirement arrangements, earn-
ings calculation for returned or rechar-
acterized IRA contributions (REG-
124256-02) 33, 383

Limitations on benefits and contributions,
cost-of-living adjustments (Notice 71)
45, 830

Practice before the Internal Revenue Ser-
vice (TD 9011) 33, 356

Premature distributions, substantially
equal periodic payments (RR 62) 42,
710

Proposed Regulations:

26 CFR 1.401(a)-11, -20, revised;
1.417(a)(3)-1, added; 1.417(e)-1,
amended; disclosure of relative
value of optional forms of benefit
(REG-124667-02) 44, 791

26 CFR 1.401(a)(9)-6, added; required
distributions from retirement plans,
notice of public hearing (Ann 84)
37, 533

26 CFR 1.408-4, amended; 1.408-11,
added; 1.408A-5, revised; earnings
calculation for returned or recharac-
terized IRA contributions (REG-
124256-02) 33, 383

26 CFR 1.419A(f)(6)-1, added; 10-or-
more employer plans (REG-
165868-01) 31, 270; correction
(Ann 93) 41, 709

Publications:

590, Individual Retirement Arrange-
ments (IRAs), Supplement to (Ann
73) 33, 387

Qualified retirement plans:

Deductions:

Contributions (Notice 48) 29, 130

Timing (RR 46) 29, 117; (RR 73)
45, 805

Defined benefit plan, phased retire-
ment (Notice 43) 27, 38

Money purchase pension plan, partial
termination (RR 42) 28, 76

Notice to interested parties require-
ment (TD 9006) 32, 315

Qualification, joint and survivor annu-
ities (REG-124667-02) 44, 791

Required minimum distributions,
notice of public hearing (Ann 84)
37, 533

Restorative payments (RR 45) 29, 116
Refund of mistaken contributions and
withdrawal liability payments (TD
9005) 32, 290

# EMPLOYEE PLANS- Cont.

Regulations:

26 CFR 1.401(a)(2)-1, added; refund
of mistaken contributions and with-
drawal liability payments (TD 9005)
32, 290

26 CFR 1.7476-1, -2, amended;
601.201, amended; notice to inter-
ested parties (TD 9006) 32, 315

31 CFR Part 10, amended; regulations
governing practice before the Inter-
nal Revenue Service (TD 9011)
33, 356

Ten-or-more employer plans (REG-
165868-01) 31, 270; correction (Ann
93) 41, 709

# EMPLOYMENT TAX

Compromise of tax liabilities (TD 9007)
33, 349

Effective date of Rev. Proc. 2002-41
(Notice 55) 36, 481

FICA tax assessments (CD 2076) 47, 875
Information reporting, payments made on
behalf of another person, to joint pay-
ees, and of gross proceeds from sales
involving investment advisors (TD
9010) 33, 341

Practice before the Internal Revenue Ser-
vice (TD 9011) 33, 356
Proposed Regulations:

26 CFR 1.61-2, amended; 1.61-22,
added; 1.83-1, -3, -6, amended;
1.301-1(q), added; 1.1402(a)-18,
added; 1.7872-15, added;
31.3121(a), 31.3231(e), 31.3306(b),
31.3401(a), amended; split-dollar
life insurance arrangements (REG-
164754-01) 30, 212

26 CFR 31.3406(d)-5, revised;
301.6724-1, amended; receipt of
multiple notices with respect to
incorrect taxpayer identification
numbers (REG-116644-01) 31, 268
26 CFR 31.6011-4, added; tax shelter
disclosure statements (REG-
103735-00) 45, 832

26 CFR 31.6011(a)-3A, 31.6157-1
and 31.6302(c)-2A, removed;
requirement of making quarterly
payments of the railroad unemploy-
ment repayment tax (REG-209116-
89) 47, 889

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vi

<!-- PageFooter="2002-48 I.R.B." -->
<!-- PageBreak -->

# EMPLOYMENT TAX- Cont.

Publications:

1141, General Rules and Specifica-
tions for Substitute Forms W-2 and
W-3, revised (RP 53) 31, 253

1223, General Rules and Specifica-
tions for Substitute Forms W-2c and
W-3c, revised (RP 51) 29, 175

Railroad unemployment repayment tax,
quarterly payments (REG-209116-89)
47, 889

Regulations:

26 CFR 1.6041-1, -3, amended;
1.6045-1, -2, amended; 1.6049-4,
revised; 5f.6045-1, removed;
31.3406, amended; 602.101,
amended; information reporting
requirements for certain payments
made on behalf of another person,
payments to joint payees, and pay-
ments of gross proceeds from sales
involving investment advisors (TD
9010) 33, 341

26 CFR 31.6011-4T, added; tax shelter
disclosure statements (TD 9017) 45,
815

26 CFR 301.7122-0, -1, added;
301.7122-0T, -1T, removed; com-
promise of tax liabilities (TD 9007)
33, 349

31 CFR Part 10, amended; regulations
governing practice before the Inter-
nal Revenue Service (TD 9011) 33,
356

Social security contribution and benefit
base, domestic employee coverage
threshold for 2003, 46, 871

Split-dollar life insurance arrangements
(REG-164754-01) 30, 212
Statutory stock options, application of
employment taxes (Notice 47) 28, 97
Substitute Forms:

W-2 and W-3, general rules and
specifications (RP 53) 31, 253

W-2c and W-3c, general rules and
specifications (RP 51) 29, 175
Taxpayer identification numbers, backup
withholding, waiver of information
reporting penalties (REG-116644-01)
31, 268

# ESTATE TAX

Annuities, death benefits (RR 39) 27, 33
Compromise of tax liabilities (TD 9007)
33, 349

Guaranteed annuity and lead unitrust
interests, definition (REG-115781-01)
33, 380

Practice before the Internal Revenue Ser-
vice (TD 9011) 33, 356

Proposed Regulations:

26 CFR 20.2055-2, amended; defini-
tion of guaranteed annuity and lead
unitrust interests (REG-115781-01)
33, 380

26 CFR 20.6011-4, added; tax shelter
disclosure statements (REG-
103735-00) 45, 832

Regulations:

26 CFR 20.6011-4T, added; tax shelter
disclosure statements (TD 9017) 45,
815

26 CFR 301.7122-0, -1, added;
301.7122-0T, -1T, removed; com-
promise of tax liabilities (TD 9007)
33, 349

31 CFR Part 10, amended; regulations
governing practice before the Inter-
nal Revenue Service (TD 9011) 33,
356

Split-dollar life insurance arrangements,
standards for valuing current life insur-
ance protection (Notice 59) 36, 481
Tax conventions, competent authority
procedures (RP 52) 31, 242

# EXCISE TAX

Air transportation, mileage awards:
Sales of frequent flyer miles (Notice
63) 40, 644

Taxation rules (RR 60) 40, 641

Compromise of tax liabilities (TD 9007)
33, 349

Diesel fuel, blended taxable fuel (REG-
106457-00) 26, 23

Golden parachute payments:
Excess payments (Ann 65) 29, 181
Valuation of options (RP 45) 27, 40

Highway vehicle, definition (REG-
103829-99) 27, 59; correction (Ann
82) 37, 533

Practice before the Internal Revenue Ser-
vice (TD 9011) 33, 356

Prohibited transactions, excise tax com-
putation (RR 43) 28, 85

# EXCISE TAX- Cont.

Proposed Regulations:

26 CFR 1.280G-1, golden parachute
payments; correction (Ann 65) 29,
181

26 CFR 41.4482(a)-1, amended;
48.4041-8, amended; 48.4051-1,
added; 48.4072-1, amended;
48.4081-1, amended; 48.6421-4,
revised; 145.4051-1, amended; defi-
nition of highway vehicle (REG-
103829-99) 27, 59; correction (Ann
82) 37, 533; hearing (Ann 95) 42,
727

26 CFR 48.4081-1, -3, amended; die-
sel fuel, blended taxable fuel (REG-
106457-00) 26, 23

26 CFR 53.6011-4, added; 54.6011-4,
added; 56.6011-4, added; tax shelter
disclosure statements (REG-
103735-00) 45, 832

Regulations:

26 CFR 53.6011-4T, added; 54.6011-
4T, added; 56.6011-4T, added; tax
shelter disclosure statements (TD
9017) 45, 815

26 CFR 301.7122-0, -1, added;
301.7122-0T, -1T, removed; com-
promise of tax liabilities (TD 9007)
33, 349

31 CFR Part 10, amended; regulations
governing practice before the Inter-
nal Revenue Service (TD 9011) 33,
356

Taxable fuel, biodiesel (RR 76) 46, 840
Tax-free sales of articles for use by pur-
chaser as supplies for vessels or aircraft
(RR 50) 32, 292

# EXEMPT ORGANIZATIONS

Form:

990, request for comments on possible
changes (Ann 87) 39, 624

1023, Application for Recognition of
Exemption Under Section 501(c)(3)
of the Internal Revenue Code,
request for comments (Ann 92) 41,
709; correction (Ann 103)

45, 836

Indian tribal governments treated as
states, list (RP 64) 42, 717

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# EXEMPT ORGANIZATIONS- Cont.

List of organizations classified as private
foundations (Ann 64) 27, 72; (Ann 66)

29, 183; (Ann 70) 31, 284; (Ann 72)

32, 323; (Ann 75) 34, 416; (Ann 77)

35, 471; (Ann 80) 36, 515; (Ann 88)
38, 564; (Ann 104) 45, 836

Practice before the Internal Revenue Ser-
vice (TD 9011) 33, 356

Regulations:

31 CFR Part 10, amended; regulations
governing practice before the Inter-
nal Revenue Service (TD 9011) 33,
356

Revocations (Ann 99) 43, 758

Tax-exempt electric cooperatives, pro-
pane distribution and sale (RR 54) 37,
527

Treatment of subsidiary income under the
85 percent member income test (RR
55) 37, 529

## GIFT TAX

Compromise of tax liabilities (TD 9007)
33, 349

Guaranteed annuity and lead unitrust
interests, definition (REG-115781-01)
33, 380

Net gift treatment under section 2519
(REG-123345-01) 32, 321

Practice before the Internal Revenue Ser-
vice (TD 9011) 33, 356

Proposed Regulations:

26 CFR 1.61-2, amended; 1.61-22,
added; 1.83-1, -3, -6, amended;
1.301-1(q), added; 1.1402(a)-18,
added; 1.7872-15, added;

31.3121(a), 31.3231(e), 31.3306(b),
31.3401(a), amended; split-dollar
life insurance arrangements (REG-
164754-01) 30, 212

26 CFR 25.2207A-1, amended;
25.2519-1, amended; net gift treat-
ment under section 2519 (REG-
123345-01) 32, 321

26 CFR 25.2522(c)-3, amended; defi-
nition of guaranteed annuity and
lead unitrust interests (REG-
115781-01) 33, 380

26 CFR 25.6011-4, added; tax shelter
disclosure statements (REG-
103735-00) 45, 832

## GIFT TAX-Cont.

Regulations:

26 CFR 25.6011-4T, added; tax shelter
disclosure statements (TD 9017) 45,
815

26 CFR 301.7122-0, -1, added;
301.7122-0T, -1T, removed; com-
promise of tax liabilities (TD 9007)
33, 349

31 CFR Part 10, amended; regulations
governing practice before the Inter-
nal Revenue Service (TD 9011)
33, 356

Split-dollar life insurance arrangements:
Income, employment, and gift taxation
of (REG-164754-01) 30, 212

Standards for valuing current life
insurance protection (Notice 59) 36,
481

Tax conventions, competent authority
procedures (RP 52) 31, 242

### INCOME TAX

Accident and health plans, amounts
received (RR 58) 38, 541

Accounting periods:

Automatic approval (Notice 75)
47, 884

Changes in annual accounting period
(Notice 72) 46, 843

Alternative identifying number of income
tax return preparer (TD 9014) 35, 429
Annuity contracts, tax-free exchange (RR
75) 45, 812

Appeals:

Arbitration procedures, extension of
test (Ann 60) 26, 28

Mediation procedure (RP 44) 26, 10

Settlement initiative for section 302/

318 basis-shifting transactions (Ann
97) 43, 757

Termination of settlement initiative for
corporate owned life insurance

(COLI) cases (Ann 96) 43, 756

Archer MSAs, 2002 not a cut-off year
(Ann 90) 40, 684

Base period T-bill rate for 2002 (RR 68)
45, 808

Business expenses, lease-in/lease-out
transactions (RR 69) 44, 760

Business and traveling expenses, per
diem allowances, 2003 (RP 63) 41, 691
Capital gains and losses (Notice 58)
35, 432

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### INCOME TAX- Cont.

Capital gains, qualified empowerment
zone (QEZ) asset (RP 62) 40, 682

Charitable contributions, transfer of used
vehicles (RR 67) 47, 873

Classification of newly formed entity (RP
59) 39, 615

Community property, classification for
federal tax purposes (RP 69) 45, 831
Compromise of tax liabilities (TD 9007)
33, 349

Consolidated income tax return:

Agent for the group (RP 43) 28, 99

Common parent as agent for consoli-
dated group, substitute agent, tenta-
tive carryback adjustments (TD
9002) 29, 120

Contingent liability tax shelter cases,
settlement (RP 67) 43, 733
Corporations:

Carryback of consolidated net operat-
ing losses to separate return years
(TD 8997) 26, 6; correction (Ann
68) 31, 283; (REG-122564-02)

26, 25

Exclusions from gross income of for-
eign corporations (REG-136311-
01\) 36, 485; correction (Ann 94) 42,
727; correction (Ann 102) 44, 802
Foreign loss payment patterns (Notice
69\) 43, 730

Spin-offs, mergers and acquisitions
(RR 49) 32, 288

Treatment of a controlled foreign cor-
poration's distributive share of part-
nership income under subpart F (TD
9008) 33, 335

Cost of living adjustments for inflation
for 2003 (RP 70) 46, 845

Credits:

Enhanced oil recovery credit, 2002
inflation adjustment (Notice 53) 30,
187

Increasing research activities credit
(Notice 44) 27, 39

Low-income housing credit:
Carryovers to qualified states, 2002
National Pool (RP 56) 36, 483

Rental assistance payments (RR 65)
43, 729

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# INCOME TAX- Cont.

Satisfactory bond, "bond factor"
amounts for the period:
July through September 2002
(RR 51) 33, 327

October through December 2002
(RR 72) 44, 759

New markets tax credit, other federal
tax benefits (Notice 64) 41, 690

Definition of income tax return preparer,
low-income taxpayer clinics (REG-
115285-01) 27, 62

Depreciation, income forecast method
(REG-103823-99) 27, 44; correction
(Ann 79) 36, 515

Designated private delivery services,
2002 (Notice 62) 39, 574

Designation of persons before whom a
summoned person shall appear (TD
9015) 40, 642; (REG-134026-02)
40, 684

Disaster relief for September 11, 2001,
terrorist attacks; exclusion of gain from
the sale or exchange of a taxpayer's
principal residence (Notice 60) 36, 482
Disclosure of return information, Census
of Agriculture (TD 9001) 29, 128

Domestic reverse hybrid entity, eligibility
for treaty benefits (TD 8999) 28, 78;
correction (Ann 71) 32, 323

Dual consolidated loss recapture events
(REG-106879-00) 34, 402; correction
(Ann 100) 44, 799

E-file Partnership Program, individual,
request for applications to participate in
2003 (Ann 101) 44, 800

Effective date of Rev. Proc. 2002-41
(Notice 55) 36, 481

Entity classification rules (TD 9012) 34,
389

"Excepted sale" for information reporting
on Form 1099-B for certain sales of
stock (RP 50) 29, 173

Extension of time to file, or for amending
the statement of information required
under section 149(e) of the Code (RP
48) 37, 531

Foreign insurance companies, minimum
effectively connected net investment
income (RP 58) 40, 644

## INCOME TAX- Cont.

# INCOME TAX- Cont.

Forms:

1096, 1098, 1099, 5498, W-2G, and
1042-S, substitute form specifica-
tions (RP 57) 39, 575

1099-B, information reporting for cer-
tain sales of stock, exception (RP
50) 29, 173

Golden parachute payments:

Excess payments (Ann 65) 29, 181
Valuation of options (RP 45) 27, 40
Guaranteed annuity and lead unitrust
interests, definition (REG-115781-01)
33, 380

Health reimbursement arrangements
(HRAs) (RR 41) 28, 75; (Notice 45)
28, 93

Information reporting:

Investment trusts (REG-106871-00)
30, 190

Payments made on behalf of another
person, to joint payees, and of gross
proceeds from sales involving
investment advisors (TD 9010)
33, 341

Information returns, discharges of indebt-
edness (REG-107524-00) 28, 110

Institute on International Tax Issues (Ann
105) 46, 872

Insurance companies:

Certain reinsurance arrangements
(Notice 70) 44, 765

Interest rates (REG-248110-96)
26, 19

Interest:

Bank deposit interest paid to nonresi-
dent aliens (REG-133254-02)
34, 412

Investment:

Federal short-term, mid-term, and
long-term rates for:

July 2002 (RR 40) 27, 30

August 2002 (RR 48) 31, 239
September 2002 (RR 53)
35, 427
October 2002 (RR 61) 40, 639
November 2002 (RR 74) 45, 814

Rates:
Underpayments and overpayments,
quarter beginning:
October 1, 2002 (RR 59) 38, 557

Inventory:

LIFO, price indexes used by depart-

ment stores for:

May 2002 (RR 47) 29, 119

June 2002 (RR 52) 34, 388
July 2002 (RR 57) 37, 526

August 2002 (RR 64) 41, 688
September 2002 (RR 77)

45, 806

Joint return, relief from joint and several
liability (TD 9003) 32, 294; correction
(Ann 83) 38, 564

Loss limitation rules (TD 8998) 26, 1;
(REG-123305-02) 26, 26; correction
(Ann 69) 31, 283

Marginal properties, oil and gas produc-
tion, depletion, 2002 percentages
(Notice 54) 30, 189

Methods of accounting:

Automatic consent to change certain
methods of accounting (RP 54) 35,
432

Safe harbor method for premium
acquisition expenses, non-life insur-
ance companies (RP 46) 28, 105

Unit livestock price method (TD 9019)
47, 874

New York Liberty Zone, tax benefits
(Notice 42) 27, 36

Noncustomary services provided to ten-
ants of a REIT (RR 38) 26, 4

Notional principal contract, accounting
for gain or loss from a hedging transac-
tion (RR 71) 44, 763

Optional standard mileage rates for 2003
(RP 61) 39, 616

Partnerships:

Mergers and divisions (Ann 89) 39,
626

Optional election to make monthly
section 706(a) computations (RP 68)
43, 753

Straddle tax shelter (Notice 50) 28, 98
Taxable year, foreign and tax-exempt
partners (TD 9009) 33, 328

Withholding tax on nonresident aliens,
Qualified Intermediaries (Notice 66)
42, 715

Passive activity losses and credits, limita-
tions (TD 9013) 38, 542

Passive foreign investment company
stock, mark to market election (REG-
112306-00) 44, 767
Penalties, substantial understatement (RP
66) 42, 724

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# INCOME TAX- Cont.

Practice before the Internal Revenue Ser-
vice (TD 9011) 33, 356

Presidentially-declared disaster or combat
zone, reason for postponement of cer-
tain acts (RP 71) 46, 850

Private foundations, organizations now
classified as (Ann 64) 27, 72; (Ann 66)

29, 183; (Ann 70) 31, 284; (Ann 72)

32, 323; (Ann 75) 34, 416; (Ann 77)
35, 471; (Ann 80) 36, 515; (Ann 88)
38, 564; (Ann 104) 45, 836

Proposed Regulations:

26 CFR 1.61-2, amended; 1.61-22,
added; 1.83-1, -3, -6, amended;
1.301-1(q), added; 1.1402(a)-18,
added; 1.7872-15, added;
31.3121(a), 31.3231(e), 31.3306(b),
31.3401(a), amended; split-dollar
life insurance arrangements (REG-
164754-01) 30, 212

26 CFR 1.167(n)-0 through -7, added;
guidance on cost recovery under the
income forecast method (REG-
103823-99) 27, 44; correction (Ann
79) 36, 515

26 CFR 1.170A-6, amended; defini-
tion of guaranteed annuity and lead
unitrust interests (REG-115781-01)
33, 380

26 CFR 1.280G-1; golden parachute
payments; correction (Ann 65)
29, 181

26 CFR 1.302-2(c), removed 1.302-5,
added; 1.304-1, revised; 1.304-2,
-3, -5, amended; 1.304-6, added;
1.704-1, amended; 1.861-12, added;
1.861-12T, amended; 1.1371-1,
added; 1.1374-5(a), -10(a), revised;
1.1502-13, -19, revised; redemp-
tions taxable as dividends (REG-
150313-01) 44, 777

26 CFR 1.337(d)-2, amended; 1.1502-
20, amended; loss limitation rules
(REG-123305-02) 26, 26; correc-
tion (Ann 69) 31, 283

26 CFR 1.482-0, -1, -5, -7, amended;
compensatory stock options in quali-
fied cost sharing arrangements
(REG-106359-02) 34, 405; correc-
tion (Ann 81) 37, 533

# INCOME TAX- Cont.

26 CFR 1.671-4, amended; 1.671-5,
added; 1.6041-9, added; 1.6042-5,
added; 1.6045-1, amended;
1.6049-4, -5, amended; 1.6050N-2,
added; 301.6109-1, amended;
602.101, amended; reporting for
widely held fixed investment trusts
(REG-106871-00) 30, 190

26 CFR 1.807-2, added; 1.811-3,
added; 1.812-9, added; 1.817A-0,
-1, added; guidance regarding modi-
fied guaranteed contracts (REG-
248110-96) 26, 19

26 CFR 1.883-0 through -5, added;
exclusions from gross income of for-
eign corporations (REG-136311-
01\) 36, 485; correction (Ann 94)
42, 727; correction (Ann 102)
44, 802

26 CFR 1.897 -1, -2, -3, -5T, -6T,
amended; 1.897-5, added; 1.1445-1
through -6, amended; 1.1445-9T,
removed; 301.6109-1, amended; use
of taxpayer identifying numbers on
submissions under sections 897 and
1445 (REG-106876-00) 34, 392

26 CFR 1.1291-1, amended;
1.1295-1, amended; 1.1296-1,
added; 1.1296(e)-1, amended;
1.6031(a)-1, amended; electing
mark to market for marketable stock
(REG-112306-00) 44, 767

26 CFR 1.1502-21, amended; carry-
back of consolidated net operating
losses to separate return years
(REG-122564-02) 26, 25

26 CFR 1.1502-32, amended; 1.1502-
35, added; suspension of losses on
certain stock dispositions (REG-
131478-02) 47, 892

26 CFR 1.1503-2, amended; dual con-
solidated loss recapture events
(REG-106879-00) 34, 402; correc-
tion (Ann 100) 44, 799

26 CFR 1.6011-4, amended;
301.6111-2, amended; modification
of tax shelter rules III (REG-
103735-00, REG-110311-98) 28,
109

26 CFR 1.6011-4, revised;
301.6111-2, amended; tax shelter
disclosure statements (REG-
103735-00) 45, 832

# INCOME TAX- Cont.

26 CFR 1.6041-1(a)(1)(ii), -3,
amended; 1.6045-5, added; report-
ing of gross proceeds payments to
attorneys (REG-126024-01) 27, 64
26 CFR 1.6049-4, -6, -8, revised;
31.3406(g)-1, revised; guidance on
reporting of deposit interest paid to
nonresident aliens (REG-133254-
02) 34, 412

26 CFR 1.6050P-0, -1, amended;
1.6050P-2, added; guidance regard-
ing cancellation of indebtedness
(REG-107524-00) 28, 110

26 CFR 31.3406(d)-5, revised;
301.6724-1, amended; receipt of
multiple notices with respect to
incorrect taxpayer identification
numbers (REG-116644-01) 31, 268

26 CFR 300.0, amended; 300.3, added;
user fees for processing offers to
compromise (REG-103777-02)
47, 889

26 CFR 301.6112-1, revised; require-
ment to maintain list of investors in
potentially abusive tax shelters
(REG-103736-00) 45, 834

26 CFR 301.7602-1, revised; desig-
nated IRS officer or employee under
section 7602(a)(2) of the Internal
Revenue Code (REG-134026-02)
40, 684

26 CFR 301.7701-15, amended; low-
income taxpayer clinics -- definition
of income tax return preparer (REG-
115285-01) 27, 62

Public hearings, correction of dates
and/or locations (Ann 67) 30, 237
Public hearings for proposed regulations,
correction of dates and locations (Ann
67) 30, 237

Publications:

463, Travel, Entertainment, Gift, and
Car Expenses, Supplement to (Ann
59) 26, 28

520, Scholarships and Fellowships,
revised (Ann 86) 39, 624

536, Net Operating Losses (NOLs) for
Individuals, Estates, and Trusts,
Supplement to (Ann 59) 26, 28

551, Basis of Assets, revised (Ann 61)
27, 71

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# INCOME TAX- Cont.

555, Community Property, revised
(Ann 85) 39, 624

583, Starting a Business and Keeping
Records, revised (Ann 62) 27, 72

590, Individual Retirement Arrange-
ments (IRAs), Supplement to (Ann
73) 33, 387

946, How To Depreciate Property,
Supplement to (Ann 59) 26, 28
971, Innocent Spouse Relief (And
Separation of Liability and Equi-
table Relief), revised (Ann 74)
33, 387

1141, General Rules and Specifica-
tions for Substitute Forms W-2 and
W-3, revised (RP 53) 31, 253

1167, substitute forms, general
requirements (RP 60) 40, 645

1179, substitute forms 1096, 1098,
1099, 5498, W-2G, and 1042-S,
specifications (RP 57) 39, 575

1187, Specifications for Filing Form
1042-S, Foreign Person's U.S.
Source Income Subject to Withhold-
ing, Magnetically or Electronically,
2002 updates (Ann 98) 43, 758

1220, Specifications for Filing Forms
1098, 1099, 5498, and W-2G Elec-
tronically of Magnetically, changes
(Ann 76) 35, 471

1223, General Rules and Specifica-
tions for Substitute Forms W-2c and
W-3c, revised (RP 51) 29, 175

3991, Highlights of the Job Creation
and Worker Assistance Act, new
(Ann 59) 26, 28

Qualified cost sharing arrangements,
costs attributable to stock options
(REG-106359-02) 34, 405; correction
(Ann 81) 37, 533

Qualified covered call options (RR 66)
45, 812

Railroad track maintenance costs,
accounting methods (RP 65) 41, 700

Real estate mortgage investment conduits
(REMICs) (TD 9004) 33, 331

Regulations:

26 CFR 1.141-0, -2, -15, amended;
1.141-7, -8, added; 1.141-7T, -8T,
-15T, removed; obligations of states
and political subdivisions (TD 9016)
40, 628

26 CFR 1.337(d)-2T, amended;
1.1502-20T, amended; loss limita-
tion rules (TD 8998) 26, 1

## INCOME TAX- Cont.

26 CFR 1.338-1, amended; 1.1502-6,
amended; 1.1502-77, redesignated
as 1.1502-77A and amended;
1.1502-77, added; 1.1502-77T(a),
redesignated as 1.1502-77A(e) and
amended; 1.1502-77T, removed;
1.1502-78, amended; 602.101,
amended; agent for consolidated
group (TD 9002) 29, 120

26 CFR 1.469-0, -7, -11, amended;
602.101, amended; limitations on
passive activity losses and credits-
treatment of self-charged items of
income and expense (TD 9013) 38,
542

26 CFR 1.471-6; amended; unit live-
stock price method (TD 9019) 47,
874

26 CFR 1.702-1, amended; 1.952-
1(g), added; 1.954-1(g), -2(a)(5),
-3(a)(6), -4(b)(2)(iii), added; 1.956-
2(a)(3), added; guidance under sub-
part F relating to partnerships (TD
9008) 33, 335

26 CFR 1.706-1, revised; 1.706-3T,
removed; taxable years of partner
and partnership, foreign partners
(TD 9009) 33, 328

26 CFR 1.708-1, amended; 1.752-1,
-5, amended; partnership mergers
and divisions; correction (Ann 89)
39, 626

26 CFR 1.860A-0, amended;
1.860E-1, amended; 602.101,
amended; real estate mortgage
investment conduits (TD 9004)
33, 331

26 CFR 1.892-5, added; 1.892-5T,
amended; 301.7701-2, amended;
clarification of entity classification
rules (TD 9012) 34, 389

26 CFR 1.894-1(d), amended; treaty
guidance regarding payments with
respect to domestic reverse hybrid
entities (TD 8999) 28, 78; correc-
tion (Ann 71) 32, 323

26 CFR 1.1361-5; subchapter S sub-
sidiaries; correction (Ann 106)
46, 872

26 CFR 1.1502-21, amended; 1.1502-
21T, added; 602.101, amended; car-
ryback of consolidated net operating
losses to separate return years (TD
8997) 26, 6; correction (Ann 68)
31, 283

# INCOME TAX- Cont.

26 CFR 1.6011-4T, amended;
1.6031(a)-1, amended; 1.6037-1,
amended; 301.6111-2T, amended;
modification of tax shelter rules III
(TD 9000) 28, 87

26 CFR 1.6011-4T, revised;
301.6111-2T, amended; tax shelter
disclosure statements (TD 9017)
45, 815

26 CFR 1.6013-4(d), added;
1.6013-5, removed; 1.6015-0
through -9, added; relief from joint
and several liability (TD 9003) 32,
294; correction (Ann 83) 38, 564

26 CFR 1.6041-1, -3, amended;
1.6045-1, -2, amended; 1.6049-4,
revised; 5f.6045-1, removed;
31.3406, amended; 602.101,
amended; information reporting
requirements for certain payments
made on behalf of another person,
payments to joint payees, and pay-
ments of gross proceeds from sales
involving investment advisors (TD
9010) 33, 341

26 CFR 1.6109-2, redesignated as
1.6109-2A; 1.6109-2, added;
1.6109-2T, removed; furnishing
identifying number of income tax
return preparer (TD 9014) 35, 429

26 CFR 301.6103(j)(5)-1, amended;
disclosure of return information to
officers and employees of the
Department of Agriculture for cer-
tain statistical purposes and related
activities (TD 9001) 29, 128

26 CFR 301.6112-1T, revised;
requirement to maintain a list of
investors in potentially abusive tax
shelters (TD 9018) 45, 823

26 CFR 301.7122-0, -1, added;
301.7122-0T, -1T, removed; com-
promise of tax liabilities (TD 9007)
33, 349

26 CFR 301.7602-1, revised;
301.7602-1T, added; designated IRS
officer or employee under section
7602(a)(2) of the Internal Revenue
Code (TD 9015) 40, 642

31 CFR Part 10, amended; regulations
governing practice before the Inter-
nal Revenue Service (TD 9011)
33, 356

Reporting of gross proceeds payments to
attorneys (REG-126024-01) 27, 64

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# INCOME TAX- Cont.

Reprint, Internal Revenue Bulletin
2002-33 (Ann 78) 36, 514

Revocations, exempt organizations (Ann
99) 43, 758

S corporations, subsidiaries (Ann 106)
46, 872

Split-dollar life insurance arrangements:
Income, employment, and gift taxation
of (REG-164754-01) 30, 212

Standards for valuing current life
insurance protection (Notice §9) 36,
481

Standard Industry Fare Level (SIFL) for-
mula (RR 56) 37, 526
Stocks:

Basis, suspension of losses on certain
stock dispositions (REG-131478-
02) 47, 892

Gain or loss, short sale (RR 44) 28, 84
Substitute Forms:

W-2 and W-3, general rules and
specifications (RP 53) 31, 253

W-2c and W-3c, general rules and
specifications (RP 51) 29, 175

1096, 1098, 1099, 5498, W-2G, and
1042-S, rules and specifications (RP
57) 39, 575

General requirements (RP 60) 40, 645
Tax accrual and other financial audit
workpapers, request for (Ann 63) 27,
72

Tax conventions, competent authority
procedures (RP 52) 31, 242

Tax-exempt bonds:

Exempt facility bonds, population fig-
ures (Notice 56) 32, 319

Guidance regarding mixed use output
facilities (Ann 91) 40, 685

Investment-type property and private
loan (prepayments) (Notice 52)
30, 187

Liberty zone advance refunding bonds
(Notice 73) 46, 844

Output facilities and the $15 million
limitation (TD 9016) 40, 628

Solid waste disposal facilities, recy-
cling facilities (Notice 51) 29, 131

Tax-exempt electric cooperatives, pro-
pane distribution and sale (RR 54) 37,
527

Tax liens (CD 2075) 38, 548

# INCOME TAX- Cont.

Tax shelters:

Disclosure and registration (TD 9000)
28, 87; (REG-103735-00, REG-
110311-98) 28, 109

Disclosure statements (TD 9017) 45,
815; (REG-103735-00) 45, 832

List of investors in potentially abusive
tax shelters (TD 9018) 45, 823;
(REG-103736-00) 45, 834

Partnership straddle (Notice 50) 28,
98
Passthrough entity straddle (Notice 65
41, 690

Taxpayer identification numbers:

Backup withholding, waiver of infor-
mation reporting penalties (REG-
116644-01) 31, 268

Used on submissions under sections
897 and 1445 (REG-106876-00)
34, 392

Treatment of basis of redeemed stock
when a distribution in redemption of
stock is treated as a dividend (REG-
150313-01) 44, 777

USDA Peanut Quota Buyout Program,
gain or loss (Notice 67) 42, 715

User fees for processing offers to com-
promise (REG-103777-02) 47, 889

Utility companies, non-recognition treat-
ment of stranded costs (RP 49) 29, 172
Withholdings, qualified intermediaries,
audit guidelines, nonresident aliens,
foreign financial institutions (RP 55)
35, 435

# SELF-EMPLOYMENT TAX

Compromise of tax liabilities (TD 9007)
33, 349

Practice before the Internal Revenue Ser-
vice (TD 9011) 33, 356

Regulations:

26 CFR 301.7122-0, -1, added;
301.7122-0T, -1T, removed; com-
promise of tax liabilities (TD 9007)
33, 349

31 CFR Part 10, amended; regulations
governing practice before the Inter-
nal Revenue Service (TD 9011) 33,
356

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