Internal Revenue Bulletin 2000-15 (PDF rendition): IRS Announcements

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INCOME TAX
Ct. D. 2066, page 867.
Tax considered paid.Remittances of estimate tax and with-
holding tax are deemed paid on the due date of the taxpayer’s
income tax return under section 6513 of the Code. Baral v.
United States.
Ct. D. 2067, page 863.
Liens.The Supreme Court has held that when determining what
is property for purposes of federal tax liens, the Code provides
that state law determines the taxpayer’s rights or interest, but
federal law determines whether those rights or interests consti-
tute “property” or “rights to property.” Drye v. United States.
EMPLOYEE PLANS
T.D. 8878, page 857.
REG–117162–99, page 871.
Proposed and final regulations under section 125 of the
Code relate to the tax treatment of cafeteria plans.
ADMINISTRATIVE
Announcement 2000–26, page 876.
This document contains corrections to final regulations (T.D.
8864, 2000–7 I.R.B. 614) relating to certain business expenses
under section 274 of the Code affecting individuals and other
taxpayers who claim or reimburse certain business expenses.
Announcement 2000–27, page 876.
This document contains corrections to final regulations (T.D.
8859, 2000–5 I.R.B. 429) relating to the low-income housing
tax credit under section 42 of the Code.
Announcement 2000–28, page 876.
This document contains corrections to final regulations (T.D.
8849, 2000–2 I.R.B. 245) relating to separate share rules ap-
plicable to estates under section 663(c) of the Code.
Announcement 2000–29, page 877.
This document contains corrections to final regulations (T.D.
8874, 2000–8 I.R.B. 644) relating to travel and tour activities
of tax exempt organizations under section 513 of the Code.
Announcement 2000–30, page 877.
This document contains corrections to final regulations (T.D.
8867, 2000–7 I.R.B. 620) relating to the new mark-to-market
election for stock of a passive foreign investment company.
Announcement 2000–31, page 877.
This document contains corrections to final regulations (T.D.
8856, 2000–3 I.R.B. 298) relating to the withholding of in-
come tax on certain U.S. source income payments to for-
eign persons.
Announcement 2000–32, page 879.
This document contains corrections to Announcement
2000–18 (2000–13 I.R.B. 846) relating to the passthrough
of items of an S corporation to its shareholders, the adjust-
ments to the basis of stock of the shareholders, and the
treatment of distributions by an S corporation.
Announcement 2000–33, page 878.
This document contains corrections to final regulations (T.D.
8853, 2000–4 I.R.B. 377) relating to the recharacterization
of financing arrangements involving fast-pay stock.
Announcement 2000–34, page 879.
This document contains corrections to final regulations (T.D.
8870, 2000–8 I.R.B. 647) relating to making and maintain-
ing qualified electing fund (QEF) elections.
Internal Revenue
bbuulllleettiinn
Bulletin No. 2000–15
April 10, 2000
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
Department of the Treasury
Internal Revenue Service
Finding Lists begin on page ii.

April 10, 20002000–15 I.R.B.
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing offi-
cial rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
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of internal practices and procedures that affect the rights
and duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service on
the application of the law to the pivotal facts stated in the
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Introduction
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Section 125.—Cafeteria Plans
26 CFR 1.125–4: Permitted election changes.
T.D. 8878
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
Tax Treatment of Cafeteria
Plans
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations.
SUMMARY: This document contains
final regulations relating to section 125
cafeteria plans. The final regulations clar-
ify the circumstances under which a sec-
tion 125 cafeteria plan election may be
changed. The final regulations permit an
employer to allow a section 125 cafeteria
plan participant to revoke an existing
election and make a new election during a
period of coverage for accident or health
coverage or group-term life insurance
coverage.
DATES: Effective Date: These regula-
tions are effective March 23, 2000.
Applicability Date: These regulations
are applicable for cafeteria plan years be-
ginning on or after January 1, 2001. See
the Scope of Regulations and Effective
Dateportion of this preamble.
FOR FURTHER INFORMATION CON-
TACT: Janet A. Laufer or Christine L.
Keller at (202) 622-6080 (not a toll-free
number).
SUPPLEMENTARY INFORMATION:
Background
This document contains amendments to
the Income Tax Regulations (26 CFR part
1) under section 125. Section 125 gener-
ally provides that an employee in a cafete-
ria plan will not have an amount included
in gross income solely because the em-
ployee may choose among two or more
benefits consisting of cash and “qualified
benefits.” A qualified benefit generally is
any benefit that is excludable from gross
income under an express provision of the
Internal Revenue Code, including cover-
age under an employer-provided accident
or health plan under sections 105 and 106,
group-term life insurance under section
79, elective contributions under a quali-
fied cash or deferred arrangement within
the meaning of section 401(k), dependent
care assistance under section 129, and
adoption assistance under section 137.
1
Qualified benefits can be provided under
a cafeteria plan either through insured
arrangements or arrangements that are not
insured.
In 1984 and 1989, proposed regulations
were published relating to the administra-
tion of cafeteria plans.
2
In general, the
1984 and 1989 proposed regulations re-
quire that for benefits to be provided on a
pre-tax basis under section 125, an em-
ployee may make changes during a plan
year only in certain circumstances.
3
Specifically, Q&A-8 of §1.125–1 and
Q&A-6(b), (c), and (d) of §1.125–2 per-
mit participants to make benefit election
changes during a plan year pursuant to
changes in cost or coverage, changes in
family status, and separation from ser-
vice.
In 1997, temporary and proposed regu-
lations were issued addressing the stan-
dards under which a cafeteria plan may
permit a participant to change his or her
group health coverage election during a
period of coverage to conform with the
special enrollment rights under section
9801(f) (added to the Internal Revenue
Code by the Health Insurance Portability
and Accountability Act of 1996 (HIPAA))
and to change his or her group health or
group-term life insurance coverage in a
variety of change in status situations.
4
These final regulations, which replace
the 1997 temporary regulations, clarify
the circumstances under which a cafeteria
plan may permit an employee to revoke
an existing election with respect to acci-
dent or health coverage, or group-term
life insurance coverage, and make a new
election during a period of coverage.
Explanation of Provisions
A. Summary.
These regulations clarify the circum-
stances under which a cafeteria plan may
permit an employee to change his or her
cafeteria plan election with respect to ac-
cident or health coverage or group-term
life insurance coverage during the plan
year. The regulations generally follow the
existing temporary regulations, and in-
clude a variety of examples illustrating
how the rules apply in specific situations.
The final regulations include two prin-
cipal changes that have been made in re-
sponse to public comments. First, the
regulations differ from the 1997 regula-
tions with respect to change in status
events resulting from a change in em-
ployment. Commentators requested a
loosening of the rules regarding when a
cafeteria plan election can be changed.
In response, the final rules incorporate a
more flexible rule under which any
change in the employment status of the
employee (or a spouse or dependent of
the employee) that affects that individ-
ual’s eligibility under a cafeteria plan or
qualified benefits plan constitutes a
change in status for purposes of permit-
ting a mid-year election change. Second,
in the event of a change in an employee’s
marital status or the employment status
of the employee’s spouse or dependent,
the final regulations permit the employee
to elect either to increase group-term life
insurance coverage or to decrease group-
2000–15 I.R.B.857April 10, 2000
Part I. Rulings and Decisions Under the Internal Revenue Code of 1986
1
The following are not qualified benefits: products
advertised, marketed, or offered as long-term care
insurance; medical savings accounts under section
106(b); qualified scholarships under section 117;
educational assistance programs under section 127;
and fringe benefits under section 132.
2
49 FR 19321 (May 7, 1984) and 54 FR 9460
(March 7, 1989), respectively.
3
Those proposed regulations contain special rules
with respect to flexible spending arrangements. A
flexible spending arrangement (FSA) is defined in
section 106(c)(2). Under section 106(c)(2), an FSA
is generally a benefit program under which the max-
imum reimbursement reasonably available for cov-
erage is less than 500% of the value of the coverage.
4
62 FR 60196 (November 7, 1997) and 62 FR
60165 (November 7, 1997), respectively. IRS
Announcement 98–105 (1998–49 I.R.B. 21
(November 23, 1998)) states that the Service will
amend the effective date of those proposed and tem-
porary regulations so that they will not be effective
before plan years beginning at least 120 days after
further guidance is issued.

April 10, 20008582000–15 I.R.B.
term life insurance coverage. A similar
rule applies with respect to disability in-
come plans.
These final regulations were developed
as part of an integrated package with pro-
posed regulations REG–117162–99, page
871. Those proposed regulations provide
guidance on election changes on account
of changes in status with respect to depen-
dent care assistance and adoption assis-
tance and provide guidance on election
changes on account of changes in cost or
coverage with respect to dependent care
assistance, adoption assistance, accident
or health coverage, and group-term life
insurance coverage. The integrated pack-
age of final and proposed regulations is
intended to provide clear standards for
plan administration and for administration
of the tax law. The standards are designed
to accommodate the most common types
of events of independent significance that
do not occur on a regular, periodic basis
and that are likely to affect an employee’s
decisions with respect to qualified bene-
fits coverage.
B. Changes in Status.
Commentators on the 1997 temporary
and proposed regulations requested that
the description of changes in status be ex-
panded to include work-related changes
of an employee, the employee’s spouse,
or the employee’s dependent in addition
to termination or commencement of em-
ployment or change in worksite. In re-
sponse to these comments, the description
of changes in status has been broadened
to include a strike or lockout, and a com-
mencement of or return from an unpaid
leave of absence. In addition, the final
rules incorporate a more flexible rule for
other change in employment status
events. Specifically, if there is a change
in the employment status of the employee
(or a spouse or dependent of the em-
ployee) that affects that individual’s eligi-
bility under a cafeteria plan or qualified
benefits plan, then that change constitutes
a change in status. For example, if an em-
ployee switches from salaried to hourly-
paid status, resulting in the employee
ceasing to be eligible for coverage under
the plan, then that change constitutes a
change in status.
Some commentators expressed concern
that the 1997 temporary and proposed
regulations did not permit an employee to
make an election change to cover addi-
tional individuals under an accident or
health plan when an employer changed its
policy (e.g., to permit coverage for a par-
ent or for a domestic partner pursuant to
local law requirements). Under the 1997
temporary and proposed regulations, a
change in status includes an event that
causes an employee’s dependent to satisfy
or cease to satisfy the eligibility require-
ments for coverage under a plan. Thus, if
an individual who is a dependent of an
employee becomes eligible for coverage
under the employer’s health plan as a re-
sult of an amendment made to the plan
during the year, that is a change in status
event and, accordingly, the cafeteria plan
may permit an election change by the em-
ployee to cover the individual. These
final regulations retain the rule from the
1997 temporary and proposed regula-
tions.
These final regulations do not address
when a bona fide termination of employ-
ment occurs. However, these regulations
retain the example (Example 8under
paragraph (c)(4) of these final regula-
tions) from the 1997 temporary and pro-
posed regulations addressing the situation
in which an employee terminates and re-
sumes employment within 30 days. The
effect of this example is to provide a prac-
tical safe harbor that generally may be ap-
plied by cafeteria plans without regard to
other facts and circumstances. Under this
example, if an employee terminates and
resumes employment within 30 days and
the cafeteria plan provides that the em-
ployee’s election is automatically rein-
stated, the employer is not required to de-
termine whether a bona fide change in
status has occurred with respect to termi-
nation of employment. Conversely, the
cafeteria plan may permit an employee
who resumes employment more than 30
days following termination to be automat-
ically reinstated to the prior election or to
make a new election.
5
C. Consistency Rule.
As under the 1997 temporary and pro-
posed regulations, the final regulations re-
quire that an election change as a result of
a change in status also satisfy a consis-
tency requirement. In response to com-
ments, the final regulations expand and
clarify the consistency requirement with
respect to change in status events for
group-term life insurance. Under the
1997 regulations, in the case of a com-
mencement of employment, marriage,
birth, adoption, or placement for adop-
tion, an employee could elect to increase
(but not decrease) group-term life insur-
ance coverage. The 1997 regulations also
permitted an employee to elect to de-
crease (but not to increase) group-term
life insurance coverage in the case of di-
vorce, legal separation, annulment, or
death of a spouse or dependent. Com-
mentators suggested that these rules were
too restrictive. For example, in the case
of divorce, an employee may reasonably
seek to increase coverage because the em-
ployee may become the sole wage-earner
for the family unit as a result of the di-
vorce. Accordingly, the final regulations
provide flexibility by stating that, in the
event of a change in an employee’s mari-
tal status or the employment status of the
employee’s spouse or dependent, an em-
ployee may elect either to increase group-
term life insurance coverage or to de-
crease group-term life insurance
coverage. Also, in response to com-
ments, a similar rule has been added that
applies to election changes made with re-
spect to disability income coverage (i.e.,
accident or health coverage that is neither
for medical care as defined under section
213(d) nor for payments described in sec-
tion 105(c)).
D. Other Changes.
Some commentators requested that the
regulations prescribe a period of time by
which election changes, as a result of a
change in status, should be made. Consis-
tent with the approach taken in the 1997
regulations and in the interest of provid-
ing employers and plan administrators
flexibility, the final regulations do not
prescribe such a period. However, noth-
ing in the final regulations would prevent
a cafeteria plan by its terms from requir-
ing that any election change (other than
those made in connection with rights for
which there are specific minimum elec-
tion periods, such as under section 9801
(as added by HIPAA) and section 4980B
(relating to COBRA coverage)), must be
made within a specified period after a
5
Alternatively, the cafeteria plan may prohibit an
employee from participating in the cafeteria plan for
that plan year upon reemployment.

2000–15 I.R.B.859April 10, 2000
change in status event. The consistency
rule in the final regulations does require
that an election change made pursuant to
a change in status be “on account of” a
gain or loss of eligibility for coverage.
This requirement follows the “on account
of” language contained in the 1989 pro-
posed regulations under §1.125–2, Q&A-
6(c), and is intended to add a general con-
dition that the election change not be
made so long after the event permitting
the election change that the election is not
on account of the event.
In accordance with comments, exam-
ples in the regulations clarify that if, in
accordance with special enrollment rights
provided by HIPAA , an employee,
spouse, or new dependent is entitled to
enroll in a group health plan, a cafeteria
plan may permit the employee to elect to
enroll pre-existing dependents in the un-
derlying group health plan.
6
Likewise,
the examples clarify that if, in accordance
with the change in status rules relating to
a new spouse or dependent, an employee
is entitled to elect family coverage under
a group health plan, then other family
members are permitted to become cov-
ered under the family coverage as a result
of the election change.
7
In response to comments, the final reg-
ulations also clarify that, in the event of a
loss of Medicare or Medicaid entitlement
by an employee or by the employee’s
spouse or dependent, a cafeteria plan may
permit the employee to add health cover-
age under the employer’s accident or
health plan (and may permit cancellation
or reduction in coverage if an employee,
spouse, or dependent who is enrolled in
an accident or health plan becomes enti-
tled to Medicare or Medicaid).
Scope of Regulations and Effective
Date
These final regulations address all of
the changes in status for which a cafeteria
plan may permit election changes with re-
spect to an accident or health plan or
group-term life insurance plan. However,
future guidance under the cost or cover-
age change provision (reserved at para-
graph (f) of these final regulations and in-
cluded in paragraph (f) of the proposed
regulations [REG–117162–99], on page
871), rather than the change in status
rules, would determine whether a cafete-
ria plan may permit affected employees to
elect a new HMO option that is made
available during a period of coverage.
Similarly, election changes may be made
under the special rules relating to changes
in elections by employees taking leave
under the Family and Medical Leave Act
of 1993 (Public Law 103–3)
8
(as refer-
enced at paragraph (g) of these final regu-
lations).
Finally, these regulations do not over-
ride other cafeteria plan requirements.
For example, although an employee’s ter-
mination of employment is a change in
status, some election changes made with
respect to coverage under a health FSA on
account of the termination of employment
would fail to be consistent with the re-
quirement that the operation of such
arrangements exhibit the risk-shifting and
risk-distribution characteristics of insur-
ance under §1.125–1, Q&A-17 and
§1.125–2, Q&A-7 of the proposed regula-
tions. Thus, a cafeteria plan could not
permit individuals terminating employ-
ment to change their health FSA elections
to match the amount of premiums paid
prior to termination (i.e., stop paying pre-
miums), and continue to receive health
FSA reimbursements with respect to the
remainder of the period of coverage.
These regulations are applicable for
cafeteria plan years beginning on or after
January 1, 2001. Until the beginning of
the first plan year beginning on or after
January 1, 2001, taxpayers may rely on
these regulations. In addition, until the
beginning of the first plan year beginning
on or after January 1, 2001, taxpayers
may continue to rely on the change in sta-
tus rules in the 1997 regulations, as well
as the change in family status rules in the
pre-1997 proposed regulations.
Pursuant to section 7805(e), the 1997
temporary regulations §1.125–4T will ex-
pire within three years of the date of is-
suance (November 7, 2000). This Trea-
sury decision amends the 1997 temporary
regulations to add this expiration in the
text of the regulations (§1.125–4T(l).
Special Analyses
It has been determined that this Trea-
sury decision is not a significant regula-
tory action as defined in Executive Order
12866. Therefore, a regulatory assess-
ment is not required. It also has been de-
termined that section 553(b) of the Ad-
ministrative Procedure Act (5 U.S.C.
chapter 5) does not apply to these regula-
tions, and because the regulation does not
impose a collection of information on
small entities, the Regulatory Flexibility
Act (5 U.S.C. chapter 6) does not apply.
Pursuant to section 7805(f) of the Internal
Revenue Code, these regulations will be
submitted to the Chief Counsel for Advo-
cacy of the Small Business Administra-
tion for comment on its impact on small
business.
Drafting Information
The principal authors of these regula-
tions are Janet A. Laufer and Christine L.
Keller, Office of the Associate Chief
Counsel (Employee Benefits and Exempt
Organizations). However, other person-
nel from the IRS and Treasury Depart-
ment participated 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 continues to read in
part as fol-
lows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. §1.125–4 is added to read as
follows:
§1.125–4 Permitted election changes.
(a) Election changes. A cafeteria plan
may permit an employee to revoke an
election during a period of coverage and
to make a new election only as provided
in paragraphs (b) through (g) of this sec-
tion. Section 125 does not require a cafe-
teria plan to permit any of these changes.
See paragraph (h) of this section for spe-
cial provisions relating to qualified cash
6
No inference is intended from these or any other
examples in the final regulations concerning the
interpretation of special enrollment rights under sec-
tion 9801(f).
7
Provisions in paragraph (b) of the final regulation
allowing election changes in connection with special
enrollment under section 9801(f) may overlap the
provisions in paragraphs (c) through (e) of the final
regulations permitting election changes in other cir-
cumstances. Thus, no inference is intended that an
election change permitted under paragraphs (c)
through (e) is not also permitted under paragraph (b).
8
See ‘1.125–3, published as a proposed rule at 60
FR 66229 (December 21, 1995).

April 10, 20008602000–15 I.R.B.
or deferred arrangements, and paragraph
(i) of this section for special definitions
used in this section.
(b) Special enrollment rights— (1) In
general.A cafeteria plan may permit an
employee to revoke an election for cover-
age under a group health plan during a pe-
riod of coverage and make a new election
that corresponds with the special enroll-
ment rights provided in section 9801(f).
(2) Examples. The following examples il-
lustrate the application of this paragraph (b):
Example 1. (i) Employer Mprovides health cov-
erage for its employees pursuant to a plan that is
subject to section 9801(f). Under the plan, employ-
ees may elect either employee-only coverage or
family coverage. Malso maintains a calendar year
cafeteria plan under which qualified benefits, in-
cluding health coverage, are funded through salary
reduction. M’s employee, A, is married to Band
they have a child, C. In accordance with M’s cafete-
ria plan, Employee Aelects employee-only health
coverage before the beginning of the calendar year.
During the year, Aand Badopt a child, D. Within 30
days thereafter, Awants to revoke A’s election for
employee-only health coverage and obtain family
health coverage for A’s spouse, C, and Das of the
date of D’s adoption. Employee Asatisfies the con-
ditions for special enrollment of an employee with a
new dependent under section 9801(f)(2), so that A
may enroll in family coverage under M’s accident or
health plan in order to provide coverage effective as
of the date of D’s adoption.
(ii) M’s cafeteria plan may permit Ato change A’s
salary reduction election to family coverage for
salary not yet currently available. The increased
salary reduction is permitted to reflect the cost of
family coverage from the date of adoption. (A’s
adoption of Dis also a change in status, and the elec-
tion of family coverage is consistent with that
change in status. Thus, under paragraph (c) of this
section, M’s cafeteria plan could permit Ato elect
family coverage prospectively in order to cover B,
C, and Dfor the remaining portion of the period of
coverage.)
Example 2.(i) The employer plans and permissi-
ble coverage are the same as in Example 1. Before
the beginning of the calendar year, Employee E
elects employee- only health coverage under M’s
cafeteria plan. Employee Emarries Fduring the
plan year. F’s employer, N, offers health coverage to
N’s employees, and, prior to the marriage, Fhad
elected employee-only coverage. Employee E
wants to revoke the election for employee-only cov-
erage under M’s cafeteria plan, and is considering
electing family health coverage under M’s plan or
obtaining family health coverage under N’s plan.
(ii) M’s cafeteria plan may permit Eto change E’s
salary reduction election to reflect the change to
family coverage under M’s group health plan be-
cause the marriage would result in special enroll-
ment rights under section 9801(f), pursuant to which
an election of family coverage under M’s group
health plan would be required to be effective no later
than the first day of the first calendar month begin-
ning after the completed request for enrollment is re-
ceived by the plan. (E’s marriage to Fis also a
change in status under paragraph (c) of this section,
as illustrated in Example 1of paragraph (c)(4) of
this section.)
(c) Changes in status— (1) In general
— (i) Change in status rule. A cafeteria
plan may permit an employee to revoke
an election during a period of coverage
with respect to a qualified benefits plan to
which this paragraph (c) applies and make
a new election for the remaining portion
of the period (referred to in this section as
an election change) if, under the facts and
circumstances —
(A) A change in status described in
paragraph (c)(2) of this section occurs;
and
(B) The election change satisfies the
consistency rule of paragraph (c)(3) of
this section.
(ii) Application to accident or health
plans and group-term life insurance
plans. This paragraph (c) applies to plans
providing accident or health coverage and
plans providing group-term life insurance
coverage.
(iii) Application to other qualified ben-
efits. [RESERVED]
(2) Change in status events. The fol-
lowing events are changes in status for
purposes of this paragraph (c):
(i) Legal marital status.Events that
change an employee’s legal marital status,
including the following: marriage; death
of spouse; divorce; legal separation; and
annulment.
(ii) Number of dependents. Events that
change an employee’s number of depen-
dents, including the following: birth;
death; adoption; and placement for adop-
tion.
(iii) Employment status. Any of the
following events that change the employ-
ment status of the employee, the em-
ployee’s spouse, or the employee’s depen-
dent: a termination or commencement of
employment; a strike or lockout; a com-
mencement of or return from an unpaid
leave of absence; and a change in work-
site. In addition, if the eligibility condi-
tions of the cafeteria plan or other em-
ployee benefit plan of the employer of the
employee, spouse, or dependent depend
on the employment status of that individ-
ual and there is a change in that individ-
ual’s employment status with the conse-
quence that the individual becomes (or
ceases to be) eligible under the plan, then
that change constitutes a change in em-
ployment under this paragraph (c) (e.g., if
a plan only applies to salaried employees
and an employee switches from salaried
to hourly-paid with the consequence that
the employee ceases to be eligible for the
plan, then that change constitutes a
change in employment status under this
paragraph (c)(2)(iii)).
(iv) Dependent satisfies or ceases to
satisfy eligibility requirements. Events
that cause an employee’s dependent to
satisfy or cease to satisfy eligibility re-
quirements for coverage on account of at-
tainment of age, student status, or any
similar circumstance.
(v) Residence. A change in the place of
residence of the employee, spouse, or de-
pendent.
(3) Consistency rule— (i) Application
to accident or health coverage and group-
term life insurance. An election change
satisfies the requirements of this para-
graph (c)(3) with respect to accident or
health coverage or group-term life insur-
ance only if the election change is on ac-
count of and corresponds with a change in
status that affects eligibility for coverage
under an employer’s plan.
(ii) Application to other qualified bene-
fits.[Reserved]
(iii) Application of consistency rule.If
the change in status is the employee’s di-
vorce, annulment or legal separation
from a spouse, the death of a spouse or
dependent, or a dependent ceasing to sat-
isfy the eligibility requirements for cov-
erage, an employee’s election under the
cafeteria plan to cancel accident or health
insurance coverage for any individual
other than the spouse involved in the di-
vorce, annulment or legal separation, the
deceased spouse or dependent, or the de-
pendent that ceased to satisfy the eligibil-
ity requirements for coverage, respec-
tively, fails to correspond with that
change in status. Thus, if a dependent
dies or ceases to satisfy the eligibility re-
quirements for coverage, the employee’s
election to cancel accident or health cov-
erage for any other dependent, for the
employee, or for the employee’s spouse
fails to correspond with that change in
status. In addition, if an employee,

spouse, or dependent gains eligibility for
coverage under a family member plan
(as defined in paragraph (i)(5) of this sec-
tion) as a result of a change in marital sta-
tus under paragraph (c)(2)(i) of this sec-
tion or a change in employment status
under paragraph (c)(2)(iii) of this section,
an employee’s election under the cafete-
ria plan to cease or decrease coverage for
that individual under the cafeteria plan
corresponds with that change in status
only if coverage for that individual be-
comes applicable or is increased under
the family member plan. However, if the
change in status is a change in the em-
ployee’s marital status under paragraph
(c)(2)(i) of this section or a change in the
employment status of the employee’s
spouse or dependents under paragraph
(c)(2)(iii) of this section, an election to
increase, or an election to decrease,
group-term life insurance or disability in-
come coverage corresponds with that
change in status.
(iv) Exception for COBRA.If the em-
ployee, spouse, or dependent becomes eli-
gible for continuation coverage under the
group health plan of the employee’s em-
ployer as provided in section 4980B or
any similar state law, a cafeteria plan may
permit the employee to elect to increase
payments under the employer’s cafeteria
plan in order to pay for the continuation
coverage.
(4) Examples. The following exam-
ples illustrate the application of this para-
graph (c):
Example 1. (i) EmployerMprovides health cov-
erage (including a health FSA) for its employees
through its cafeteria plan. Before the beginning of
the calendar year, Employee Aelects employee-only
health coverage under M’s cafeteria plan and elects
salary reduction contributions to fund coverage
under the health FSA. Employee Amarries Bduring
the year. Employee B’s employer, N, offers health
coverage to N’s employees (but not including any
health FSA), and, prior to the marriage, Bhad
elected employee-only coverage. Employee A
wants to revoke the election for employee-only cov-
erage, and is considering electing family health cov-
erage under M’s plan or obtaining family health cov-
erage underN’s plan.
(ii) Employee A’s marriage to Bis a change in
status under paragraph (c)(2)(i) of this section, pur-
suant to which Bhas become eligible for coverage
under M’s health plan under paragraph (c)(3)(i) of
this section. Two possible election changes by A
correspond with the change in status: Employee A
may elect family health coverage under M’s plan to
cover Aand B; or Amay cancel coverage under M’s
plan, if Belects family health coverage under N’s
plan to cover Aand B. Thus, M’s cafeteria plan may
permit Ato make either election change.
(iii) Employee Amay also increase salary reduc-
tion contributions to fund coverage for Bunder the
health FSA.
Example 2. (i) Employee C, a single parent, elects
family health coverage under a calendar year cafeteria
plan maintained by Employer O. Employee Cand
C’s 21-year old child, D, are covered under O’s health
plan. During the year, Dgraduates from college.
Under the terms of the health plan, dependents over
the age of 19 must be full-time students to receive
coverage. Employee Cwants to revoke C’s election
for family health coverage and obtain employee-only
coverage under O’s cafeteria plan.
(ii) D’s loss of eligibility for coverage under the
terms of the health plan is a change in status under
paragraph (c)(2)(iv) of this section. A revocation of
C’s election for family coverage and new election
for employee-only coverage corresponds with the
change in status. Thus, O’s cafeteria plan may per-
mit Cto elect employee-only coverage.
Example 3. (i) Employee Eis married to Fand
they have one child, G. Employee Eis employed by
Employer P, and Pmaintains a calendar year cafete-
ria plan that allows employees to elect no health
coverage, employee-only coverage, employee-plus-
one-dependent coverage, or family coverage. Under
the plan, before the beginning of the calendar year, E
elects family health coverage for E, F, and G. Eand
Fdivorce during the year and Floses eligibility for
coverage under P’s plan. Gdoes not lose eligibility
for health coverage under P’s plan upon the divorce.
Enow wants to revoke E’s election under the cafete-
ria plan and elect no coverage.
(ii) The divorce is a change in status under para-
graph (c)(2)(i). A change in the cafeteria plan election
to cancel health coverage for Fis consistent with that
change in status. However, an election change to can-
cel E’s or G’s health coverage does not satisfy the
consistency rule under paragraph (c)(3)(iii) of this
section regarding cancellation of coverage for an em-
ployee’s other dependents in the event of divorce.
Therefore, the cafeteria plan may not permit Eto elect
no coverage. However, an election to change to em-
ployee-plus-one-dependent health coverage would
correspond with the change in status, and thus the
cafeteria plan may permit Eto elect employee- plus-
one-dependent health coverage.
Example 4. (i) Employer Rmaintains a calendar
year cafeteria plan under which full-time employees
may elect coverage under one of three benefit pack-
age options provided under an accident or health
plan: an indemnity option or either of two HMO op-
tions for employees who work in the respective ser-
vice areas of the two HMOs. EmployeeA, who
works in the service area of HMO #1, elects the
HMO #1 option. During the year, Ais transferred to
another work location which is outside the HMO #1
service area and inside the HMO #2 service area.
(ii) The transfer is a change in status under para-
graph (c)(2)(iii) of this section (relating to a change
in worksite), and, under the consistency rule in para-
graph (c)(3) of this section, the cafeteria plan may
permit Ato make an election change to either the in-
demnity option or HMO #2.
Example 5. (i) Employer Smaintains a calendar
year cafeteria plan that allows employees to elect cov-
erage under an accident or health plan providing in-
demnity coverage and coverage under a health FSA.
Prior to the beginning of the calendar year, Employee
Belects employee-only indemnity coverage, and
elects salary reduction contributions of $600 during
the year to fund coverage under the health FSA for up
to $600 of reimbursements for the year. Employee
B’s spouse, C, has employee-only coverage under an
accident or health plan maintained by C’s employer.
During the year, Cterminates employment and loses
coverage under that plan. Bnow wants to elect fam-
ily coverage under S’s accident or health plan and in-
crease B’s FSA election.
(ii) C’s termination of employment is a change in
status under paragraph (c)(2)(iii) of this section, and
the election change satisfies the consistency rule of
paragraph (c)(3) of this section. Therefore, the cafe-
teria plan may permit Bto elect family coverage
under S’s accident or health plan and to increase B’s
FSA coverage.
Example 6. (i) Employer Tprovides group-term
life insurance coverage as described under section
79. Under T’s plan, an employee may elect life in-
surance coverage in an amount up to $50,000. T
also maintains a calendar year cafeteria plan under
which qualified benefits, including the group-term
life insurance coverage, are funded through salary
reduction. Employee Dhas a spouse and a child.
Before the beginning of the year, Delects $10,000
of group-term life insurance coverage. During the
year, Dis divorced.
(ii) The divorce is a change in status under para-
graph (c)(2)(i) of this section. Under paragraph
(c)(3)(iii) of this section, either an increase or a de-
crease in coverage is consistent with this change in
status. Thus, T’s cafeteria plan may permit Dto in-
crease or to decrease D’s group-term life insurance
coverage.
Example 7. (i) Employee Eis married to Fand
they have one child, G. Employee E’s employer, U,
maintains a cafeteria plan under which employees
may elect no coverage, employee-only coverage, or
family coverage under a group health plan main-
tained by U, and may make a separate vision cover-
age election under the plan. Before the beginning
of the calendar year, Eelects family health coverage
and no vision coverage under U’s cafeteria plan.
Employee F’s employer, V, maintains a cafeteria
plan under which employees may elect no coverage,
employee-only coverage, or family coverage under a
group health plan maintained by V, and may make a
separate vision coverage election under the plan.
Before the beginning of the calendar year, Felects
no health coverage and employee-only vision cover-
age under V’s plan. During the year, Fterminates
employment with Vand loses vision coverage under
V’s plan. Employee Enow wants to elect family vi-
sion coverage under U’s group health plan.
(ii) F’s termination of employment is a change in
status under paragraph (c)(2)(iii) of this section, and
the election change satisfies the consistency rule of
paragraph (c)(3) of this section. Therefore, U’s cafe-
teria plan may permit Eto elect family vision cover-
age (covering Eand Gas well as F) under U’s group
health plan.
Example 8. (i) Before the beginning of the year,
Employee Helects to participate in a cafeteria plan
maintained by H’s employer, W. However, in order
to change the election during the year so as to cancel
coverage, and by prior understanding with W, Hter-
minates employment and resumes employment one
week later.
(ii) In this Example 8, under the facts and cir-
cumstances, a principal purpose of the termination
2000–15 I.R.B.861April 10, 2000

of employment was to alter the election, and rein-
statement of employment was understood at the time
of termination. Accordingly, Hdoes not have a
change in status under paragraph (c)(2)(iii) of this
section.
(iii) However, H’s termination of employment
would constitute a change in status, permitting a
cancellation of coverage during the period of un-
employment, if H’s original cafeteria plan election
for the period of coverage was reinstated upon re-
sumption of employment (for example, if W’s
cafeteria plan contains a provision requiring an
employee who resumes employment within 30
days, without any other intervening event that
would permit a change in election, to return to the
election in effect prior to termination of employ-
ment).
(iv) If, instead, Hterminates employment and
cancels coverage during a period of unemploy-
ment, and then returns to work more than 30 days
following termination of employment, the cafete-
ria plan may permit Hthe option of returning to
the election in effect prior to termination of em-
ployment or making a new election under the plan.
Alternatively, the cafeteria plan may prohibit H
from returning to the plan during that plan year.
(d) Judgment, decree, or order — (1)
Conforming election change.This para-
graph (d) applies to a judgment, decree, or
order (order) resulting from a divorce,
legal separation, annulment, or change in
legal custody (including a qualified med-
ical child support order as defined in sec-
tion 609 of the Employee Retirement In-
come Security Act of 1974 (Public Law
93-406 (88 Stat. 829))) that requires acci-
dent or health coverage for an employee’s
child or for a foster child who is a depen-
dent of the employee . A cafeteria plan
will not fail to satisfy section 125 if it —
(i) Changes the employee’s election to
provide coverage for the child if the order
requires coverage for the child under the
employee’s plan; or
(ii) Permits the employee to make an
election change to cancel coverage for the
child if the order requires the spouse, for-
mer spouse, or other individual to provide
coverage for the child.
(2) Example. The following example
illustrates the application of this para-
graph (d):
Example. (i) Employer Mmaintains a calendar
year cafeteria plan that allows employees to elect no
health coverage, employee-only coverage, em-
ployee-plus-one-dependent coverage, or family cov-
erage. M’s employee, A, is married to Band they
have one child, C. Before the beginning of the year,
Aelects employee-only health coverage. Employee
Adivorces Bduring the year and, pursuant to A’s di-
vorce agreement with B, M’s health plan receives a
qualified medical child support order (as defined in
section 609 of the Employee Retirement Income Se-
curity Act of 1974) during the plan year. The order
requires M’s health plan to cover C.
(ii) Under this paragraph (d), M’s cafete-
ria plan may change A’s election from employee-
only health coverage to employee-plus-one-depen-
dent coverage in order to cover C.
(e) Entitlement to Medicare or Med-
icaid. If an employee, spouse, or depen-
dent who is enrolled in an accident or
health plan of the employer becomes enti-
tled to coverage (i.e., becomes enrolled)
under Part A or Part B of Title XVIII of
the Social Security Act (Medicare)(Public
Law 89-97 (79 Stat. 291)) or Title XIX of
the Social Security Act (Medicaid)(Public
Law 89-97 (79 Stat. 343)), other than cov-
erage consisting solely of benefits under
section 1928 of the Social Security Act
(the program for distribution of pediatric
vaccines), a cafeteria plan may permit the
employee to make a prospective election
change to cancel or reduce coverage of
that employee, spouse, or dependent
under the accident or health plan. In addi-
tion, if an employee, spouse, or dependent
who has been entitled to such coverage
under Medicare or Medicaid loses eligi-
bility for such coverage, the cafeteria plan
may permit the employee to make a
prospective election to commence or in-
crease coverage of that employee, spouse,
or dependent under the accident or health
plan.
(f) Significant cost or coverage
changes. [Reserved]
(g) Special requirements relating to the
Family and Medical Leave Act. An em-
ployee taking leave under the Family and
Medical Leave Act (FMLA)(Public Law
102-530 (88 Stat. 829)) may revoke an
existing election of group health plan cov-
erage and make such other election for the
remaining portion of the period of cover-
age as may be provided for under the
FMLA.
(h) Elective contributions under a qual-
ified cash or deferred arrangement. The
provisions of this section do not apply
with respect to elective contributions
under a qualified cash or deferred
arrangement (within the meaning of sec-
tion 401(k)) or employee contributions
subject to section 401(m). Thus, a cafete-
ria plan may permit an employee to mod-
ify or revoke elections in accordance with
section 401(k) and (m) and the regula-
tions thereunder.
(i) Definitions.Unless otherwise pro-
vided, the definitions in paragraphs (i)(1)
though (8) of this section apply for pur-
poses of this section.
(1) Accident or health coverage.Acci-
dent or health coverage means coverage
under an accident or health plan as de-
fined in regulations under section 105.
(2) Benefit package option.A benefit
package option means a qualified benefit
under section 125(f) that is offered under
a cafeteria plan, or an option for coverage
under an underlying accident or health
plan (such as an indemnity option, an
HMO option, or a PPO option under an
accident or health plan).
(3) Dependent.A dependent means a
dependent as defined in section 152, ex-
cept that, for purposes of accident or
health coverage, any child to whom sec-
tion 152(e) applies is treated as a depen-
dent of both parents.
(4) Disability income coverage.Disabil-
ity income coverage means coverage under
an accident or health plan that provides ben-
efits due to personal injury or sickness, but
does not reimburse expenses incurred for
medical care (as defined in section 213(d))
of the employee or the employee’s spouse
and dependents, and does not provide for
payments described in section 105(c).
(5) Family member plan.A family
member plan means a cafeteria plan or
qualified benefit plan sponsored by the
employer of the employee’s spouse or the
employee’s dependent.
(6) FSA, health FSA.An FSA means a
qualified benefits plan that is a flexible
spending arrangement as defined in sec-
tion 106(c)(2) . A health FSA means a
health or accident plan that is an FSA.
(7) Placement for adoption.Place-
ment for adoption means placement for
adoption as defined in regulations under
section 9801.
(8) Qualified benefits plan.A quali-
fied benefits plan means an employee
benefit plan governing the provision of
one or more benefits that are qualified
benefits under section 125(f).
(j) Effective date. This section is ap-
plicable for cafeteria plan years beginning
on or after January 1, 2001.
Par. 3. §1.125–4T is amended by revising
paragraph (l) to read as follows:
§1.125–4T Permitted election changes
(temporary).
* * * * *
(l) Effective date. This section is ap-
plicable for plan years beginning after
December 31, 1998, and on or before No-
vember 6, 2000.
April 10, 20008622000–15 I.R.B.

Robert E. Wenzel,
Deputy Commissioner
of Internal Revenue.
Approved February 23, 2000.
Jonathan Talisman,
Acting Assistant Secretary of the
Treasury (Tax Policy).
(Filed by the Office of the Federal Register on
March 22, 2000, 8:45 a.m., and published in the
issue of the Federal Register for March 23, 2000, 65
F.R. 15548)
Section 6321—Lien for Taxes
Ct. D. 2067
SUPREME COURT
OF THE UNITED STATES
No. 98–1101
ROHN F. DRYE, JR., ET AL.,
PETITIONER v. UNITED STATES
528 U.S. _____(1999)
CERTIORARI TO THE UNITED
STATES COURT OF APPEALS FOR
THE EIGHTH CIRCUIT
[December 7, 1999]
Syllabus
In 1994, Irma Drye died intestate, leav-
ing a $233,000 estate in Pulaski County,
Akansas. Petitioner Rohn Drye, her son,
was sole heir to the estate under
Arkansas law. Drye was insolvent at the
time of his mother’s death and owed the
Federal Government some $325,000 on
unpaid tax assessments. The Internal
Revenue Service (IRS) had valid tax
liens against all of Drye’s “property and
rights to property” pursuant to 26 U.S.C.
Sec. 6321. Drye petitioned the Pulaski
County Probate Court for appointment
as administrator of his mother’s estate,
and was so appointed. Several months
after his mother’s death, Drye resigned
as administrator after filing in the Pro-
bate Court and county land records a
written disclaimer of all interests in the
estate. Under Arkansas law, such a dis-
claimer creates the legal fiction that the
disclaimant predeceased the decedent;
consequently, the disclaimant’s share of
the estate passes to the person next in
line to receive that share. The disavow-
ing heir’s creditors, Arkansas law pro-
vides, may not reach property thus dis-
claimed. Here, Drye’s disclaimer
caused the estate to pass to his daughter,
Theresa Drye, who succeeded her father
as administrator and promptly estab-
lished the Drye Family 1995 Trust
(Trust). The Probate Court declared
Drye’s disclaimer valid and accordingly
ordered final distribution of the estate to
Theresa, who then used the estate’s pro-
ceeds to fund the Trust, of which she
and, during their lifetimes, her parents
are the beneficiaries. Under the Trust’s
terms, distributions are at the discretion
of the trustee, Drye’s counsel, and may
be made only for the health, mainte-
nance, and support of the beneficiaries.
The Trust is spendthrift, and under state
law, its assets are therefore shielded
from creditors seeking to satisfy the
debts of the Trust’s beneficiaries. After
Drye revealed to the IRS his beneficial
interest in the Trust, the IRS filed with
the county a notice of federal tax lien
against the Trust as Drye’s nominee,
served a notice of levy on accounts held
in the Trust’s name by an investment
bank, and notified the Trust of the levy.
The Trust filed a wrongful levy action
against the United States in the United
States District Court for the Eastern Dis-
trict of Arkansas. The Government
counterclaimed against the Trust, the
trustee, and the trust beneficiaries, seek-
ing to reduce to judgment the tax assess-
ments against Drye, confirm its right to
seize the Trust’s assets in collection of
those debts, foreclose on its liens, and
sell the Trust property. On cross-mo-
tions for summary judgment, the District
Court ruled in the Government’s favor.
The Court of Appeals for the Eighth Cir-
cuit affirmed, reading this Court’s prece-
dents to convey that state law deter-
mines whether a given set of
circumstances creates a right or interest,
but federal law dictates whether that
right or interest constitutes “property”
or the “righ[t] to property” under Sec.
6321.
Held: Drye’s disclaimer did not de-
feat the federal tax liens. The Internal
Revenue Code’s prescriptions are most
sensibly read to look to state law for de-
lineation of the taxpayer’s rights or in-
terests in the property the Government
seeks to reach, but to leave to federal
law the determination whether those
rights or interests constitute “property”
or “rights to property” under Sec. 6321.
Once it has been determined that state
law creates sufficient interests in the
taxpayer to satisfy the requirements of
the federal tax lien provision, state law
is inoperative to prevent the attachment
of the federal liens. United Statesv.
Bess, 357 U.S. 51, 5657. Pp. 5-11.
(a) To satisfy a tax deficiency, the
Government may impose a lien on any
“property” or “rights to property” be-
longing to the taxpayer. Secs. 6321,
6331(a). When Congress so broadly
uses the term “property,” this Court rec-
ognizes that the Legislature aims to
reach every species of right or interest
protected by law and having an ex-
changeable value. E.g., Jewettv. Com-
missioner, 455 U.S. 305, 309. Sec.
6334(a), which lists items exempt from
levy, is corroborative. Section 6334(a)’s
list is rendered exclusive by Sec.
6334(c), which provides that no other
“property or rights to property shall be
exempt.” Inheritances or devises dis-
claimed under state law are not included
in Sec. 6334(a)’s catalog of exempt
property. See, e.g., Bess, 357 U.S. at 57.
The absence of any recognition of dis-
claimers in Secs. 6321, 6322, 6331(a),
and 6334(a) and (c), the relevant tax col-
lection provisions, contrasts with Sec.
2518(a), which renders qualifying state
law disclaimers “with respect to any in-
terest in property” effective for federal
wealthtransfer tax purposes, and for
those purposes only. Although this
Court’s decisions in point have not been
phrased so meticulously as to preclude
the argument that state law is the proper
guide to the critical determination
whether Drye’s interest constituted
“property” or “rights to property” under
Sec. 6321, the Court is satisfied that the
Code and interpretive case law place
under federal, not state, control the ulti-
mate issue whether a taxpayer has a ben-
eficial interest in any property subject to
levy for unpaid federal taxes. Pp. 5-7.
(b) The question whether a state-law
right constitutes “property” or “rights to
property” under Sec. 6321 is a matter of
federal law. United Statesv. National
Bank of Commerce, 472 U.S. 713, 727.
This Court looks initially to state law to
determine what rights the taxpayer has in
2000–15 I.R.B.863April 10, 2000

the property the Government seeks to
reach, then to federal law to determine
whether the taxpayer’s state delineated
rights qualify as “property” or “rights to
property” within the compass of the fed-
eral tax lien legislation. Cf. Morganv.
Commissioner, 309 U.S. 78, 80. Just as
exempt status under state law does not
bind the federal collector, United Statesv.
Mitchell, 403 U.S. 190, 204, so federal
tax law is not struck blind by a disclaimer,
United Statesv. Irvine, 511 U.S. 224, 240.
Pp 7-9.
(c) The Eighth Circuit, with fidelity to
the relevant Code provisions and this
Court’s case law, determined first what
rights state law accorded Drye in his
mother’s estate. The Court of Appeals
observed that, under Arkansas law, Drye
had, at his mother’s death, a valuable,
transferable, legally protected right to the
property at issue, and noted, for example,
that a prospective heir may effectively as-
sign his expectancy in an estate under
Arkansas law, and the assignment will be
enforced when the expectancy ripens into
a present estate. Drye emphasizes his un-
doubted right under Arkansas law to dis-
claim the inheritance, a right that is in-
deed personal, and not marketable. But
Arkansas law primarily gave him a right
of considerable value – the right either to
inherit or to channel the inheritance to a
close family member (the next lineal de-
scendant). That right simply cannot be
written off as a mere personal right to ac-
cept or reject a gift. In pressing the anal-
ogy to a rejected gift, Drye overlooks this
crucial distinction. A donee who declines
an inter vivosgift restores the status quo
ante, leaving the donor to do with the gift
what she will. The disclaiming heir or de-
visee, in contrast, does not restore the sta-
tus quo, for the decedent cannot be re-
vived. Thus, the heir inevitably exercises
dominion over the property. He deter-
mines who will receive the property –
himself if he does not disclaim, a known
other if he does. This power to channel
the estate’s assets warrants the conclusion
that Drye held “property” or a “righ[t] to
property” subject to the Government’s
liens under Sec. 6321. Pp. 9-11.
152 F. 3d 892, affirmed.
GINSBURG, J., delivered the opinion for
a unanimous Court.
SUPREME COURT
OF THE UNITED STATES
No. 98-1101
ROHN F. DRYE, JR., ET AL., PETI-
TIONER v. UNITED STATES
528 U.S. _____(1999)
CERTIORARI TO THE UNITED
STATES COURT OF APPEALS
FOR THE EIGHTH CIRCUIT
[December 7, 1999]
JUSTICE GINSBURG delivered the
opinion of the Court.
This case concerns the respective
provinces of state and federal law in de-
termining what is property for purposes
of federal tax lien legislation. At the
time of his mother’s death, petitioner
Rohn F. Drye, Jr., was insolvent and
owed the Federal Government some
$325,000 on unpaid tax assessments for
which notices of federal tax liens had
been filed. His mother died intestate,
leaving an estate with a total value of ap-
proximately $233,000 to which he was
sole heir. After the passage of several
months, Drye disclaimed his interest in
his mother’s estate, which then passed
by operation of state law to his daughter.
This case presents the question whether
Drye’s interest as heir to his mother’s es-
tate constituted “property” or a “righ[t]
to property” to which the federal tax
liens attached under 26 U.S.C. Sec.
6321, despite Drye’s exercise of the pre-
rogative state law accorded him to dis-
claim the interest retroactively.
We hold that the disclaimer did not de-
feat the federal tax liens. The Internal
Revenue Code’s prescriptions are most
sensibly read to look to state law for de-
lineation of the taxpayer’s rights or inter-
ests, but to leave to federal law the deter-
mination whether those rights or interests
constitute “property” or “rights to prop-
erty” within the meaning of Sec. 6321.
“[O]nce it has been determined that state
law creates sufficient interests in the [tax-
payer] to satisfy the requirements of [the
federal tax lien provision], state law is in-
operative to prevent the attachment of
liens created by federal statutes in favor
of the United States.” United Statesv.
Bess, 357 U.S. 51, 5657 (1958).
I
A
The relevant facts are not in dispute. On
August 3, 1994, Irma Deliah Drye died
intestate, leaving an estate worth approxi-
mately $233,000, of which $158,000 was
personalty and $75,000 was realty located
in Pulaski County, Arkansas. Petitioner
Rohn F. Drye, Jr., her son, was sole heir to
the estate under Arkansas law. See Ark.
Code Ann. Sec. 28-9-214 (1987) (intes-
tate interest passes “[f]irst, to the children
of the intestate”). On the date of his
mother’s death, Drye was insolvent, and
owed the Government approximately
$325,000, representing assessments for
tax deficiencies in years 1988, 1989, and
1990. The Internal Revenue Service (IRS
or Service) had made assessments against
Drye in November, 1990 and May, 1991,
and had valid tax liens against all of
Drye’s “property and rights to property”
pursuant to 26 U.S.C. Sec. 6321.
Drye petitioned the Pulaski County
Probate Court for appointment as admin-
istrator of his mother’s estate, and was so
appointed on August 17, 1994. Almost six
months later, on February 4, 1995, Drye
filed in the Probate Court and land
records of Pulaski County a written dis-
claimer of all interests in his mother’s es-
tate. Two days later, Drye resigned as ad-
ministrator of the estate.
Under Arkansas law, an heir may disavow
his inheritance by filing a written dis-
claimer no later than nine months after the
death of the decedent. Ark. Code Ann.
Secs. 28-2-101, 28-2-107 (1987). The
disclaimer creates the legal fiction that the
disclaimant predeceased the decedent;
consequently, the disclaimant’s share of
the estate passes to the person next in line
to receive that share. The disavowing
heir’s creditors, Arkansas law provides,
may not reach property thus disclaimed.
Sec. 28-2-108. In the case at hand, Drye’s
disclaimer caused the estate to pass to his
daughter, Theresa Drye, who succeeded
her father as administrator and promptly
established the Drye Family 1995 Trust
(Trust).
On March 10, 1995, the Probate Court
declared valid Drye’s disclaimer of all in-
terest in his mother’s estate, and accord-
ingly ordered final distribution of the estate
to Theresa Drye. Theresa Drye then used
the estate’s proceeds to fund the Trust, of
which she and, during their lifetimes, her
April 10, 20008642000–15 I.R.B.

parents are the beneficiaries. Under the
Trust’s terms, distributions are at the discre-
tion of the trustee, Drye’s counsel Daniel
M. Traylor, and may be made only for the
health, maintenance, and support of the
beneficiaries. The Trust is spendthrift, and,
under state law, its assets are therefore
shielded from creditors seeking to satisfy
the debts of the Trust’s beneficiaries.
Also in 1995, the IRS and Drye began
negotiations regarding Drye’s tax liabili-
ties. During the course of the negotiations,
Drye revealed to the Service his beneficial
interest in the Trust. Thereafter, on April
11, 1996, the IRS filed with the Pulaski
County Circuit Clerk and Recorder a notice
of federal tax lien against the Trust as
Drye’s nominee. The Service also served a
notice of levy on accounts held in the
Trust’s name by an investment bank, and
notified the Trust of the levy.
B
On May 1, 1996, invoking 26 U.S.C.
Sec. 7426(a)(1), the Trust filed a wrongful
levy action against the United States in
the United States District Court for the
Eastern District of Arkansas. The Gov-
ernment counterclaimed against the Trust,
the trustee, and the trust beneficiaries,
seeking to reduce to judgment the tax as-
sessments against Drye, confirm its right
to seize the Trust’s assets in collection of
those debts, foreclose on its liens, and sell
the Trust property. On cross-motions for
summary judgment, the District Court
ruled in the Government’s favor.
The United States Court of Appeals for
the Eighth Circuit affirmed the District
Court’s judgment. Drye Family 1995
Trustv. United States, 152 F.3d 892
(1998). The Court of Appeals understood
our precedents to convey that “state law
determines whether a given set of circum-
stances creates a right or interest; federal
law then dictates whether that right or in-
terest constitutes “property” or the “right
to property” under Sec. 6321.” Id. at 898.
We granted certiorari, 526 U.S. __
(1999), to resolve a conflict between the
Eighth Circuit’s holding and decisions of
the Fifth and Ninth Circuits.
1
We now af-
firm.
II
Under the relevant provisions of the Inter-
nal Revenue Code, to satisfy a tax defi-
ciency, the Government may impose a lien
on any “property” or “rights to property”
belonging to the taxpayer. Section 6321
provides: “If any person liable to pay any
tax neglects or refuses to pay the same after
demand, the amount . . . shall be a lien in
favor of the United States upon all property
and rights to property, whether real or per-
sonal, belonging to such person.” 26 U.S.C.
Sec. 6321. A complementary provision,
Sec. 6331(a), states:
“If any person liable to pay any
tax neglects or refuses to pay the
same within 10 days after notice
and demand, it shall be lawful
for the Secretary to collect such
tax . . . by levy upon all property
and rights to property (except
such property as is exempt under
section 6334) belonging to such
person or on which there is a lien
provided in this chapter for the
payment of such tax.
2
The language in Secs. 6321 and 6331(a),
this Court has observed, “is broad, and re-
veals on its face that Congress meant to
reach every interest in property that a tax-
payer might have.” United Statesv. Na-
tional Bank of Commerce, 472 U.S. 713,
719720 (1985) (citing 4 B. Bittker, Federal
Taxation of Income, Estates and Gifts Par.
111.5.4, p. 111100 (1981)); see also Glass
City Bankv. United States, 326 U.S. 265,
267 (1945) (“Stronger language could
hardly have been selected to reveal a pur-
pose to assure the collection of taxes.”).
When Congress so broadly uses the term
“property,” we recognize, as we did in the
context of the gift tax, that the Legislature
aims to reach “`every species of right or in-
terest protected by law and having an ex-
changeable value.’” Jewettv. Commis-
sioner, 455 U.S. 305, 309 (1982) (quoting
S.Rep. No. 665, 72d Cong., 1st Sess., 39
(1932); H.R.Rep. No. 708, 72d Cong., 1st
Sess., 27 (1932)).
Section 6334(a) of the Code is corrobora-
tive. That provision lists property exempt
from levy. The list includes 13 categories of
items; among the enumerated exemptions
are certain items necessary to clothe and
care for one’s family, unemployment com-
pensation, and workers’ compensation ben-
efits. Secs. 6334(a)(1), (2), (4), (7). The
enumeration contained in Sec. 6334(a),
Congress directed, is exclusive: “Notwith-
standing any other law of the United States .
. . , no property or rights to property shall be
exempt from levy other than the property
specifically made exempt by subsection
(a).” Sec. 6334(c). Inheritances or devises
disclaimed under state law are not included
in Sec. 6334(a)’s catalog of property exempt
from levy. See Bess, 357 U.S. at 57 (“The
fact that . . . Congress provided specific ex-
emptions from distraint is evidence that
Congress did not intend to recognize further
exemptions which would prevent attach-
ment of [federal tax] liens[.]”); United
Statesv. Mitchell, 403 U.S. 190, 205 (1971)
(“Th[e] language [of Sec. 6334] is specific,
and it is clear, and there is no room in it for
automatic exemption of property that hap-
pens to be exempt from state levy under
state law.”). The absence of any recognition
of disclaimers in Secs. 6321, 6322, 6331(a),
and 6334(a) and (c), the relevant tax collec-
tion provisions, contrasts with Sec. 2518(a)
of the Code, which renders qualifying state
law disclaimers “with respect to any interest
in property” effective for federal wealth-
transfer tax purposes and for those purposes
only.
3
Drye nevertheless refers to cases indicat-
2000–15 I.R.B.865April 10, 2000
1
In the view of those courts, state law holds sway.
Under their approach, in a State adhering to an
acceptance-rejection theory, under which a property
interest vests only when the beneficiary accepts the
inheritance or devise, the disclaiming taxpayer pre-
vails and the federal liens do not attach. If, instead,
the State holds to a transfer theory, under which the
property is deemed to vest in the beneficiary imme-
diately upon the death of the testator or intestate, the
taxpayer loses and the federal lien runs with the
property. See Leggettv. United States, 120 F. 3d
592, 594 (CA5 1997); Mapesv. United States, 15 F.
3d 138, 140 (CA9 1994); accord, United Statesv.
Davidson, 55 F. Supp. 2d 1152, 1155 (Colo. 1999).
Drye maintains that Arkansas adheres to the accep-
tance-rejection theory.
2
The Code further provides:
“Unless another date is specifically fixed by law, the
lien imposed by section 6321 shall arise at the time
the assessment is made and shall continue until the
liability for the amount so assessed (or a judgment
against the taxpayer arising out of such liability) is
satisfied or becomes unenforceable by reason of
lapse of time.” 26 U.S.C. Sec. 6322.
3
See Pennell, Recent Wealth Transfer Tax
Developments, in Sophisticated Estate Planning
Techniques 69, 117-118 (ALI-ABA Continuing
Legal Ed. 1997) (“The fact that a qualified dis-
claimer by an estate beneficiary is deemed to relate
back to the decedent’s death for state property law or
federal gift tax purposes is not sufficient to preclude
a federal tax lien for the disclaimant’s delinquent
taxes from attaching to the disclaimed property as of
the moment of the decedent’s death. . . . [T]he qual-
ified disclaimer provision in Sec. 2518 only applies
for purposes of Subtitle B and the lien provisions are
in Subtitle F.”).

ing that state law is the proper guide to the
critical determination whether his interest
in his mother’s estate constituted “prop-
erty” or “rights to property” under Sec.
6321. His position draws support from two
recent appellate opinions: Leggettv.
United States, 120 F.3d 592, 597 (CA5
1997) (“Section 6321 adopts the state’s def-
inition of property interest.”); and Mapesv.
United States, 15 F.3d 138, 140 (CA9
1994) (“For the answer to th[e] question
[whether taxpayer had the requisite interest
in property], we must look to state law, not
federal law.”). Although our decisions in
point have not been phrased so meticu-
lously as to preclude Drye’s argument,
4
we
are satisfied that the Code and interpretive
case law place under federal, not state, con-
trol the ultimate issue whether a taxpayer
has a beneficial interest in any property
subject to levy for unpaid federal taxes.
III
As restated in National Bank of Com-
merce: “The question whether a state law
right constitutes ‘property’ or ‘rights to
property’ is a matter of federal law.” 472
U.S. at 727. We look initially to state law
to determine what rights the taxpayer has in
the property the Government seeks to
reach, then to federal law to determine
whether the taxpayer’s state-delineated
rights qualify as “property” or “rights to
property” within the compass of the federal
tax lien legislation. Cf. Morganv. Commis-
sioner, 309 U.S. 78, 80 (1940) (“State law
creates legal interests and rights. The fed-
eral revenue acts designate what interests or
rights, so created, shall be taxed.”).
In line with this division of competence,
we held that a taxpayer’s right under state
law to withdraw the whole of the proceeds
from a joint bank account constitutes
“property” or the “righ[t] to property” sub-
ject to levy for unpaid federal taxes, al-
though state law would not allow ordinary
creditors similarly to deplete the account.
National Bank of Commerce, 472 U.S. at
723-727. And we earlier held that a tax-
payer’s right under a life insurance policy
to compel his insurer to pay him the cash
surrender value qualifies as “property” or a
“righ[t] to property” subject to attachment
for unpaid federal taxes, although state law
shielded the cash surrender value from
creditors’ liens. Bess, 357 U.S. at 5657.
5
By contrast, we also concluded, again as a
matter of federal law, that no federal tax
lien could attach to policy proceeds un-
available to the insured in his lifetime. Id.
at 55-56 (“It would be anomalous to view
as “property” subject to lien proceeds never
within the insured’s reach to enjoy.”).
6
Just as “exempt status under state law
does not bind the federal collector,”
Mitchell, 403 U.S. at 204, so federal tax law
“is not struck blind by a disclaimer,” United
Statesv. Irvine, 511 U.S. 224, 240 (1994).
Thus, in Mitchell, the Court held that, al-
though a wife’s renunciation of a marital in-
terest was treated as retroactive under state
law, that state law disclaimer did not deter-
mine the wife’s liability for federal tax on
her share of the community income realized
before the renunciation. See 403 U.S. at 204
(right to renounce does not indicate that tax-
payer never had a right to property).
IV
The Eighth Circuit, with fidelity to the
relevant Code provisions and our case
law, determined first what rights state
law accorded Drye in his mother’s es-
tate. It is beyond debate, the Court of
Appeals observed, that, under Arkansas
law, Drye had, at his mother’s death, a
valuable, transferable, legally protected
right to the property at issue. See 152
F.3d at 895 (although Code does not de-
fine “property” or “rights to property,”
appellate courts read those terms to en-
compass “state law rights or interests
that have pecuniary value and are trans-
ferable”). The court noted, for example,
that a prospective heir may effectively
assign his expectancy in an estate under
Arkansas law, and the assignment will be
enforced when the expectancy ripens
into a present estate. See id.at 895-896
(citing several Arkansas Supreme Court de-
cisions, including: Clarkv. Rutherford,
227 Ark. 270, 270-271, 298 S.W. 2d 327,
330 (1957); Bradley Lumber Co. of Ark. v.
Burbridge, 213 Ark. 165, 172, 210 S.W. 2d
284, 288 (1948); Leggettv. Martin, 203
Ark. 88, 94, 156 S.W. 2d 71, 74-75
(1941)).
7
{7}
Drye emphasizes his undoubted right
under Arkansas law to disclaim the inheri-
tance, see Ark.Code Ann. Sec. 28-2-101
(1987), a right that is indeed personal and
not marketable. See Brief for Petitioners
13 (right to disclaim is not transferable and
has no pecuniary value). But Arkansas law
primarily gave Drye a right of considerable
value–the right either to inherit or to chan-
nel the inheritance to a close family mem-
ber (the next lineal descendant). That right
simply cannot be written off as a mere
“personal right . . . to accept or reject [a]
gift.” Brief for Petitioners 13.
In pressing the analogy to a rejected
gift, Drye overlooks this crucial distinc-
April 10, 20008662000–15 I.R.B.
4
See, e.g., United Statesv. National Bank of
Commerce, 472 U.S. 713, 722 (1985) (“[T]he feder-
al statute ‘creates no property rights, but merely
attaches consequences, federally defined, to rights
created under state law.’”) (quoting United Statesv.
Bess, 357 U.S. 51, 55 (1958)).
7
In recognizing that state law rights that have pecu-
niary value and are transferable fall within Sec.
6321, we do not mean to suggest that transferability
is essential to the existence of “property” or “rights
to property” under that section. For example,
although we do not here decide the matter, we note
that an interest in a spendthrift trust has been held to
constitute “‘property’ for purposes of Sec. 6321”
even though the beneficiary may not transfer that
interest to third parties. See Bank One, 80 F. 3d at
176. Nor do we mean to suggest that an expectancy
that has pecuniary value and is transferable under
state law would fall within Sec. 6321 prior to the
time it ripens into a present estate.
5
5. Accord, Bank One Ohio Trust Co. v. United States,
80 F. 3d 173, 176 (CA6 1996) (“Federal law did not cre-
ate [the taxpayer’s] equitable income interest [in a
spendthrift trust], but federal law must be applied in
determining whether the interest constitutes ‘property’
for purposes of Sec. 6321.”); 21 West Lancaster Corp.
v. Main Line Restaurant, Inc., 790 F. 2d 354, 357358
(CA3 1986) (although a liquor license did not constitute
“property” and could not be reached by creditors under
state law, it was nevertheless “property” subject to fed-
eral tax lien); W. Plumb, Federal Tax Liens 27 (3d ed.
1972) (“[I]t is not material that the economic benefit to
which the [taxpayer’s local law property] right pertains
is not characterized as ‘property’ by local law.”).
6
Compatibly, in Aquilino v. United States, 363 U.S.
509 (1960), we held that courts should look first to
state law to determine “‘the nature of the legal inter-
est’” a taxpayer has in the property the Government
seeks to reach under its tax lien. Id.at 513 (quoting
Morganv. Commissioner, 309 U.S. 78, 82 (1940)).
We then reaffirmed that federal law determines
whether the taxpayer’s interests are sufficient to con-
stitute “property” or “rights to property” subject to
the Government’s lien. Id.at 513-514. We remand-
ed in Aquilinofor a determination whether the con-
tractor-taxpayer held any beneficial interest, as
opposed to “bare legal title,” in the funds at issue.
Id. at 515-516; see also Note, Property Subject to the
Federal Tax Lien, 77 Harv. L. Rev. 1485, 1491
(1964) (“Aquilinosupports the view that the Court
has chosen to apply a federal test of classification,
for the contractor concededly had legal title to the
funds and yet in remanding the Court indicated that
this statecreated incident of ownership was not a suf-
ficient ‘right to property’ in the contract proceeds to
allow the tax lien to attach. In this sense Aquilino
follows Bessin requiring that the taxpayer must have
a beneficial interest in any property subject to the
lien.” (footnote omitted)).

tion. A donee who declines an inter vivos
gift generally restores the status quo ante,
leaving the donor to do with the gift what
she will. The disclaiming heir or devisee,
in contrast, does not restore the status
quo, for the decedent cannot be revived.
Thus, the heir inevitably exercises domin-
ion over the property. He determines who
will receive the property – himself if he
does not disclaim, a known other if he
does. See Hirsch, The Problem of the In-
solvent Heir, 74 Cornell L. Rev. 587, 607-
608 (1989). This power to channel the es-
tate’s assets warrants the conclusion that
Drye held “property” or a “righ[t] to prop-
erty” subject to the Government’s liens.
* * * *
In sum, in determining whether a fed-
eral taxpayer’s state law rights constitute
“property” or “rights to property,” “[t]he
important consideration is the breadth of
the control the [taxpayer] could exercise
over the property.” Morgan,309 U.S. at
83. Drye had the unqualified right to re-
ceive the entire value of his mother’s es-
tate (less administrative expenses), see
National Bank of Commerce, 472 U.S. at
725 (confirming that unqualified “right to
receive property is itself a property right”
subject to the tax collector’s levy), or to
channel that value to his daughter. The
control rein he held under state law, we
hold, rendered the inheritance “property”
or “rights to property” belonging to him
within the meaning of Sec. 6321, and
hence subject to the federal tax liens that
sparked this controversy.
For the reasons stated, the judgment of
the Court of Appeals for the Eighth Cir-
cuit is
Affirmed.
Section 6513 — Time Return
Filed and Tax Considered Paid
Ct. D. 2066
SUPREME COURT
OF THE UNITED STATES
No. 98-1667
DAVID H. BARAL, PETITIONER v.
UNITED STATES
528 U.S. ___(2000)
CERTIORARI TO THE UNITED
STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA
CIRCUIT
[February 22, 2000]
Syllabus
Two remittances were made to the In-
ternal Revenue Service toward petitioner
Baral’s income tax liability for the 1988
tax year: a withholding of $4,104 from
Baral’s wages throughout 1988 by his em-
ployer, and an estimated income tax of
$1,100 remitted in January 1989 by Baral.
Baral’s income tax return for 1988 was
due on April 15, 1989. Though he re-
ceived an extension until August 15, he
missed this deadline and did not file the
return until June 1, 1993. On the return,
he claimed a $1,175 overpayment and
asked the Service to apply this excess as a
credit toward his outstanding tax obliga-
tions for the 1989 tax year. The Service
denied the requested credit, concluding
that the claim exceeded the ceiling im-
posed by 26 U.S.C. Sec. 6511(b)(2)(A),
which states that the amount of the credit
or refund shall not exceed the portion of
the tax paid within the period, immedi-
ately preceding the filing of the claim,
equal to 3 years plus the period of any ex-
tension of time for filing the return. Since
Baral filed his return on June 1, 1993, and
received a 4-month extension from the
initial due date, the relevant look-back pe-
riod under Sec. 6511(b)(2)(A) extended
from June 1, 1993, back to February 1,
1990 (i.e., three years plus four months).
According to the Service, Baral had paid
no portion of the overpaid tax during that
period, and so faced a ceiling of zero on
any allowable refund or credit. Baral
commenced this suit for refund in the
Federal District Court, which granted the
Service summary judgment. The Court of
Appeals affirmed, concluding that both
remittances were “paid” on April 15,
1989.
Held:Remittances of estimated income
tax and withholding tax are “paid” on the
due date of a calendar year taxpayer’s in-
come tax return. Sections 6513(b)(1) and
(2) unequivocally provide that the two re-
mittances were “paid” on April 15, 1989,
for purposes of Sec. 6511(b)(2)(A), so
that they precede the look-back period,
which began on February 1, 1990. Sub-
section (1) resolves when the remittance
of Baral’s employer’s withholding tax
was “paid,” and subsection (2) determines
when his remittance of estimated income
tax was “paid.” Because neither these re-
mittances nor any others were “paid”
within the look-back period, the ceiling
on Baral’s requested $1,175 credit is zero,
and the Service was correct to deny that
credit. Contrary to Baral’s claim, the
withholding tax and estimated tax are not
taxes in their own right (separate from the
income tax), that are converted into in-
come tax only on the income tax return.
Rather, they are methods for collecting in-
come taxes. And the Tax Code directly
contradicts Baral’s notion that income tax
is “paid” under Sec. 6511(b)(2)(A) only
when the income tax is assessed. See Sec.
6151(a). His position also finds no sup-
port in Rosenmanv. United States, 323
U.S. 658, and would work to the detri-
ment of timely taxpayers, who would be
denied interest for the time between filing
a return claiming a refund or credit and
the Service’s assessment. Pp. 3-9.
172 F. 3d 918 affirmed.
THOMAS, J., delivered the opinion for a
unanimous Court.
SUPREME COURT
OF THE UNITED STATES
No. 98-1667
DAVID H. BARAL,
PETITIONER v.
UNITED STATES
ON WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF
APPEALS FOR THE DISTRICT OF
COLUMBIA CIRCUIT
[February 22, 2000]
JUSTICE THOMAS delivered the
opinion of the Court.
Internal Revenue Code Sec.
6511(b)(2)(A) imposes a ceiling on the
amount of credit or refund to which a tax-
payer is entitled as compensation for an
overpayment of tax: “[T]he amount of the
credit or refund shall not exceed the por-
tion of the tax paid within the period, im-
mediately preceding the filing of the
claim, equal to 3 years plus the period of
any extension of time for filing the re-
turn.” 26 U.S.C. Sec. 6511(b)(2)(A). We
are called upon in this case to decide
2000–15 I.R.B.867April 10, 2000

when two types of remittance are “paid”
for purposes of this section: a remittance
by a taxpayer of estimated income tax,
and a remittance by a taxpayer’s em-
ployer of withholding tax. The plain lan-
guage of a nearby Code section, Sec.
6513(b), provides the answer: these re-
mittances are “paid” on the due date of
the taxpayer’s income tax return.
I
The relevant facts are not disputed.
Two remittances were made to the Inter-
nal Revenue Service toward petitioner
David H. Baral’s income tax liability for
the 1988 tax year. The first, a withhold-
ing of $4,104 from Baral’s wages
throughout 1988, was a garden-variety
collection of income tax by the employer,
see Sec. 3402. The second, an estimated
income tax of $1,100 remitted in January
1989, was sent by Baral himself out of
concern that his employer’s withholding
might be inadequate to meet his tax oblig-
ation for the year, see Sec. 6654. In the
ordinary course, Baral’s income tax return
for 1988 was due to be filed on April 15,
1989. Though he applied for and re-
ceived an extension of time until August
15, Baral missed this deadline; he did not
file the return until nearly four years later,
on June 1, 1993. The Service, on July 19,
1993, assessed the tax liability reported
on this belated return.
On the return, Baral claimed that he
(and his employer on his behalf) had re-
mitted $1,175 more with respect to the
1988 taxable year than he actually owed.
Baral requested that the Service apply this
excess as a credit toward his outstanding
tax obligations for the 1989 taxable year.
The Service denied the requested credit.
It did not dispute that Baral had timely
filed the request under the relevant filing
deadline — “within 3 years from the time
the return was filed or 2 years from the
time the tax was paid, whichever of such
periods expires the later.” Sec. 6511(a);
see Sec. 6511(b)(1). But the Service con-
cluded that the claim exceeded the ceiling
imposed by Sec. 6511(b)(2)(A). That
provision states that “the amount of the
credit or refund shall not exceed the por-
tion of the tax paid within the period, im-
mediately preceding the filing of the
claim, equal to 3 years plus the period of
any extension of time for filing the re-
turn.” Ibid.; see generally Commissioner
v. Lundy, 516 U.S. 235, 240 (1996) (ex-
plaining that Sec. 6511 contains two sepa-
rate timeliness provisions: (1) Sec.
6511(b)(1)’s filing deadline and (2) Sec.
6511(b)(2)’s ceilings, which are defined
by reference to that provision’s “look-
back period[s]”). Since Baral had filed
his return on June 1, 1993, and had earlier
received a 4-month extension from the
initial due date, the relevant look-back pe-
riod under Sec. 6511(b)(2)(A) extended
from June 1, 1993, back to February 1,
1990 (i.e., three years plus four months).
According to the Service, Baral had paid
no portion of the overpaid tax during that
period, and so faced a ceiling of zero on
any allowable refund or credit.
Baral then commenced the instant suit
for refund in Federal District Court. That
court sustained the Service’s position and
granted summary judgment in its favor.
The Court of Appeals affirmed. App. to
Pet. for Cert. A-1, judgt. order reported at
172 F. 3d 918 (CADC 1999). The Court
of Appeals looked to Sec. 6513(b)(1),
which states that amounts of tax withheld
from wages “shall . . . be deemed to have
been paid by [the taxpayer] on the 15th
day of the fourth month following the
close of his taxable year,” and to Sec.
6513(b)(2), which makes similar provi-
sion for amounts submitted as estimated
income tax, and concluded that, under
these subsections, both of the remittances
at issue were “paid” on April 15, 1989.
Accord, e.g., Dantzlerv. United States,
183 F. 3d 1247, 1250-1251 (CA11 1999)
(estimated income tax); Ertmanv. United
States, 165 F. 3d 204, 207 (CA2 1999)
(same); Ehlev. United States, 720 F. 2d
1096, 1096-1097 (CA9 1983) (withhold-
ing from wages). In view of apparent ten-
sion between this approach and a decision
of the Court of Appeals for the Fifth Cir-
cuit, Fordv. United States, 618 F. 2d 357,
360-361, and n. 4 (1980) (suggesting that
a remittance respecting any sort of tax is
“paid” under Sec. 6511 only when the
Service assesses the tax liability), we
granted certiorari, 527 U.S. 1067 (1999).
II
The parties renew before us the con-
tentions advanced below. The Govern-
ment submits that Sec. 6513(b)(1) and (2)
unequivocally provide that the two remit-
tances at issue were “paid” on April 15,
1989 for purposes of Sec. 6511(b)(2)(A),
so that they precede the look-back period,
which, as noted, commenced on February
1, 1990. Baral, on the other hand, urges
that a tax cannot be “paid” within the
meaning of Sec. 6511(b)(2)(A) until the
tax liability is assessed (i.e., the value of
the liability is definitively fixed). Ac-
cording to Baral, the requisite assessment
might be made either when the taxpayer
files his return (here June 1, 1993) or
when the Service, under Sec. 6201, for-
mally assesses the liability (here July 19,
1993), though he seems to prefer the latter
date. See Brief for Petitioner 9 (“Pay-
ment of the income tax . . . occurred at the
earliest on June 1, 1993, when the amount
of that tax first became known, and more
precisely on July 19, 1993, when the in-
come tax was assessed”).
We agree with the Government that
Sec. 6513(b)(1) and (2) settle the matter.
We set out these provisions in full:
“(b) Prepaid Income Tax
“For purposes of section 6511 or
6512 —
“(1) Any tax actually deducted
and withheld at the source during
any calendar year under chapter 24
shall, in respect of the recipient of
the income, be deemed to have been
paid by him on the 15th day of the
fourth month following the close of
his taxable year with respect to
which such tax is allowable as a
credit under section 31.
“(2) Any amount paid as esti-
mated income tax for any taxable
year shall be deemed to have been
paid on the last day prescribed for
filing the return under section 6012
for such taxable year (determined
without regard to any extension of
time for filing such return).”
Subsection (1) resolves when the remit-
tance of withholding tax by Baral’s em-
ployer was “paid”: Since Baral is a calen-
dar year taxpayer, the $4,104 withheld
from his wages during the 1988 calendar
year was “paid” on April 15, 1989. Sub-
section (2) determines when Baral’s re-
mittance of estimated income tax was
“paid”: Since the referenced Sec. 6012 to-
gether with Sec. 6072(a) require that a
calendar year taxpayer like Baral file his
income tax return on the April 15th fol-
lowing the close of the calendar year, the
$1,100 remitted as an estimated income
tax in respect of Baral’s 1988 tax liability
April 10, 20008682000–15 I.R.B.

was likewise “paid” on April 15, 1989.
And both of these statutorily defined pay-
ment dates apply “[f]or purposes of sec-
tion 6511,” the provision directly at issue
in this case. This means that, under Sec.
6511(b)(2)(A), both remittances at issue
(the withholding and the estimated in-
come tax) fall before, and hence outside,
the look-back period, which commenced
on February 1, 1990. Because neither
these remittances nor any others were
“paid” within the look-back period (Feb-
ruary 1, 1990, to June 1, 1993), the ceiling
on Baral’s requested credit of $1,175 is
zero, and the Service was correct to deny
the requested credit.
Baral disputes this reading of Sec.
6513(b). He claims that Secs. 6513(b)(1)
and (2) establish a “deemed paid” date for
payment of estimated taxand withholding
tax, but in no sense prescribe when the in-
come tax is “paid,” which is the crucial
inquiry under Sec. 6511(b)(2)(A). Ac-
cording to Baral, withholding tax and es-
timated tax are taxes in their own right
(separate from the income tax), and are
converted into income tax only on the in-
come tax return. (On this view, payment
of the income tax occurred no earlier than
June 1, 1993, when Baral filed the return.)
This reading is evident, he says, from the
significance that the Treasury Regulations
place on the filing of the return, see 26
CFR Sec. 301.6315-1 (1999) (“The ag-
gregate amount of the payments of esti-
mated tax should be entered upon the in-
come tax return for such taxable year as
payments to be applied against the tax
shown on such return”); Sec. 301.6402-
3(a)(1) (providing that “in the case of an
overpayment of income taxes, a claim for
credit or refund of such overpayment
shall be made on the appropriate income
tax return”), and from the fact that the
Code’s provisions regarding withholding
and estimated tax are found in different
subtitles (C and F, respectively) from the
provisions governing income tax (A).
We disagree. Withholding and esti-
mated tax remittances are not taxes in
their own right, but methods for collect-
ing the income tax. Thus, Sec. 31(a)(1) of
the Code provides that amounts withheld
from wages “shall be allowed to the recip-
ient of the income as a credit against the
[income] tax,” and Sec. 6315 states that
“[p]ayment of the estimated income tax,
or any installment thereof, shall be con-
sidered payment on account of the income
taxes imposed by subtitle A for the tax-
able year.” Similarly, one of the regula-
tions cited by Baral explains that a remit-
tance of estimated income tax “shall be
considered payment on account of the in-
come taxfor the taxable year for which
the estimate is made.” 26 CFR Sec.
301.6315-1 (1999) (emphasis added).
Baral’s reading fails, moreover, to give
any meaning to 26 U.S.C. Sec. 6513.
That section exists “[f]or purposes of sec-
tion 6511,” and Sec. 6511 concerns cred-
its and refunds, which result only when
the aggregate of remittances (such as
withholding tax and estimated income
tax) exceedthe tax liability, see Sec.
6401. Thus, the concepts of credit or re-
fund have no meaning as applied to
Baral’s notion of withholding taxes and
estimated taxes as freestanding taxes.
Not surprisingly, the caption to Sec.
6513(b) describes withholding and esti-
mated income tax remittances as “[p]re-
paid income tax.”
Taking a more metaphysical tack, Baral
contends that income tax is “paid” under
Sec. 6511(b)(2)(A) only when the income
tax is assessed — here, June 1 or July 19,
1993, see supraat 4– because the concept
of payment makes sense only when the li-
ability is “defined, known, and fixed by
assessment,” Brief for Petitioner 9. But
the Code directly contradicts the notion
that payment may not occur before as-
sessment. See Sec. 6151(a) (“[T]he per-
son required to make [a return of tax]
shall, without assessmentor notice and
demand from the Secretary, paysuch tax .
. . at the time and place fixed for filing the
return” (emphasis added)); Sec.
6213(b)(4) (“Any amount paid as a tax or
in respect of a tax may be assessed upon
the receipt of such payment”(emphasis
added)). Nor does Baral’s argument find
support in our decision in Rosenmanv.
United States, 323 U.S. 658 (1945),
where we applied Sec. 6511’s predecessor
to a remittance of estimated estate tax. To
be sure, a part of our opinion seems to en-
dorse petitioner’s view that payment only
occurs at assessment:
“It is [the] erroneous assessment
that gave rise to a claim for re-
fund. Not until then was there
such a claim as could start the
time running for presenting the
claim. In any responsible sense
payment was then made by the
application of the balance cred-
ited to the petitioners in the sus-
pense account . . ..” Id., at 661.
But the remittance in Rosenman, unlike
the ones here, was not governed by a
“deemed paid” provision akin to Sec.
6513, and we therefore had no occasion to
consider the implications of such a provi-
sion for determining when a tax is “paid”
under the predecessor to Sec. 6511. See
ibid. (noting that “no extraneous relevant
aids to construction have been called to
our attention”). Moreover, if the quoted
passage had represented our holding, we
would have broadly rejected the Govern-
ment’s argument that payment occurred
when the remittance of estimated estate
tax was made, instead of rejecting the ar-
gument, as we did, only because it was
not in accord with the “tenor” of the
“business transaction,” id.at 663.
1
We observe, finally, that Baral’s posi-
tion — to the extent he submits that pay-
ment occurs only at the Service’s assess-
ment — would work to the detriment of
taxpayers who timely file their returns
and claim a refund or credit as compensa-
tion for an overpayment. The Service
will not always assess the taxpayer’s lia-
bility immediately upon receiving the re-
turn; the Service generally has three years
in which to do so, see 26 U.S.C. Sec.
6501(a) (1994 ed., Supp. III). The Code
does allow for payment of interest to the
taxpayer on overpayments once the return
has been filed and the tax paid, 26 U.S.C.
Sec. 6611 (1994 ed. and Supp. III), but,
under Baral’s view, no interest could ac-
crue during the time between the filing of
the return and the Service’s assessment.
Fortunately for the timely taxpayer, the
Code definitively rejects Baral’s position
in this setting. Section 6611(d) of 26
U.S.C. explains that the date of payment
2000–15 I.R.B.869April 10, 2000
1
Central to our analysis in this regard was a concern
that the Service should not be able to treat the same
remittance as a paymentfor statute of limitations
purposes—disadvantaging the taxpayer by decreas-
ing the time in which a refund claim could be filed—
and as a deposit for purposes of accrual of interest on
overpayments—disadvantaging the taxpayer by
starting the accrual of interest only at assessment.
Rosenman, 323 U.S. at 662-663. Indeed, we sug-
gested that an amendment to the Code disapproving
of the Service’s treatment of remittances as deposits
for interest purposes might change the analysis. Id.
at 663 (citing Current Tax Payment Act of 1943, Sec.
4(d), 57 Stat. 140) (presently codified at 26 U.S.C.
Sec. 6401(c)).

is determined according to the provisions
of Sec. 6513, which, as noted, supraat 5,
plainly set a deemed date of payment for
remittances of withholding and estimated
income tax on the April 15 following the
relevant taxable year.
2
* * * *
For the foregoing reasons, we affirm
the judgment below.
It is so ordered.
April 10, 20008702000–15 I.R.B.
2
We need not address the proper treatment under
Sec. 6511 of remittances that, unlike withholding
and estimated income tax, are not governed by a
“deemed paid” provision akin to Sec. 6513(b). Such
remittances might include remittances of estimated
estate tax, as in Rosenman, or remittances of any sort
of tax by a taxpayer under audit in order to stop the
running of interest and penalties, see, e.g., Moranv.
United States, 63 F. 3d 663 (CA7 1995). In the lat-
ter situation, the taxpayer will often desire treatment
of the remittance as a deposit — even if this means
forfeiting the right to interest on an overpayment-in
order to preserve jurisdiction in the Tax Court, which
depends on the existence of a deficiency, 26 U.S.C.
Sec. 6213 (1994 ed. and Supp. III), a deficiency that
would be wiped out by treatment of the remittance as
a payment. We note that the Service has promulgat-
ed procedures to govern classification of a remit-
tance as a deposit or payment in this context. See
Rev. Proc. 84–58, 1984–2 Cum. Bull. 501.

2000–15 I.R.B.871April 10, 2000
Notice of Proposed Rulemaking
Tax Treatment of Cafeteria
Plans
REG–117162–99
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Partial withdrawal of notice of
proposed rulemaking; amendment to no-
tice of proposed rulemaking; and notice
of proposed rulemaking.
SUMMARY: This document withdraws
portions of the notice of proposed rule-
making published in the Federal Regis-
teron March 7, 1989 and amends pro-
posed regulations under section 125.
These proposed regulations clarify the
circumstances under which a section 125
cafeteria plan election may be changed.
The proposed regulations permit an em-
ployer to allow a section 125 cafeteria
plan participant to revoke an existing
election and make a new election during a
period of coverage for accident or health
coverage, group-term life insurance cov-
erage, dependent care assistance, and
adoption assistance.
DATES: Written and electronic com-
ments and requests for a public hearing
must be received by June 22, 2000.
ADDRESSES: Send submissions to:
CC:DOM:CORP:R (REG–117162–99),
room 5226, Internal Revenue Service,
POB 7604, Ben Franklin Station, Wash-
ington, DC 20044. Submissions may be
hand delivered between the hours of 8
a.m. and 5 p.m. to: CC:DOM:CORP:R
(REG–117162–99), Courier’s Desk, In-
ternal Revenue Service, 1111 Constitution
Avenue NW., Washington, DC. Alterna-
tively, taxpayers may submit comments
electronically via the internet by selecting
the “Tax Regs” option on the IRS Home
Page, or by submitting comments directly
to the IRS internet site at
http://www.irs.gov/tax_regs/regslist.html.
FOR FURTHER INFORMATION CON-
TACT: Concerning the regulations, Janet
A. Laufer or Christine L. Keller at (202)
622–6080; concerning submissions or to
request a public hearing, LaNita Van
Dyke at (202) 622-7180. These are not
toll-free numbers.
SUPPLEMENTARY INFORMATION:
Background
Section 125
1
permits an employer to
offer employees the choice between tax-
able income and certain nontaxable or
“qualified benefits”
2
through a cafeteria
plan, without the employees having to
recognize the taxable income. In 1984
and 1989, proposed regulations were pub-
lished relating to the administration of
cafeteria plans.
3
In general, the 1984 and
1989 proposed regulations require that for
benefits to be provided on a pre-tax basis
under section 125, an employee may
make changes during a plan year only in
certain circumstances.
4
Specifically,
§§1.125–1, Q&A–8 and 1.125–2, Q&A-
6(b), (c) and (d) permit participants to
make benefit election changes during a
plan year pursuant to changes in cost or
coverage, changes in family status, and
separation from service.
In 1997, temporary and proposed regu-
lations were issued addressing the stan-
dards under which a cafeteria plan may
permit a participant to change his or her
group health coverage election during a
period of coverage to conform with the
special enrollment rights under section
9801(f) (added to the Internal Revenue
Code by the Health Insurance Portability
and Accountability Act of 1996 (HIPAA))
and to change his or her group health or
group-term life insurance coverage in a
variety of change in status situations.
5
The 1997 regulations are being published
as final regulations in T.D. 8878, page
857.
Explanation of Provisions
A. Summary.
The proposed regulations being pub-
lished in this notice of proposed rulemak-
ing were developed as part of an inte-
grated package with the final regulations
that are being published at the same time.
These proposed regulations supplement
the final regulations by permitting a mid-
year cafeteria plan election change in con-
nection with dependent care assistance
and adoption assistance under change in
status standards that are the same as the
standards in the final regulations for acci-
dent or health plans and for group-term
life insurance, and by adding change in
status standards that are specific to depen-
dent care and adoption assistance. These
proposed regulations also refine and ex-
pand upon the approach adopted in the
1989 proposed regulations (at §1.125–2,
Q&A-6(b)) by providing that a cafeteria
plan may permit employees to make mid-
year election changes with respect to
group-term life insurance, dependent care
assistance, and adoption assistance as
well as accident or health coverage, on
account of changes in cost or coverage.
This expansion of the cost or coverage
rules would also allow employees to
make election changes if, during a period
of coverage, (1) a new benefit package
option is offered, or a benefit package op-
tion is eliminated, under the plan or (2) a
Part IV. Items of General Interest
1
Revenue Act of 1978, Public Law 95-600
(November 6, 1978): Sen. Rep. 95-1263, 95
th
Cong.,
2d Sess., 74–78, 186–187 (October 1, 1978); H.R.
Rep. No. 95–1445, 95
th
Cong., 2d Sess., 63–66
(August 4, 1978); H.R. Rep. No. 95–250, 96
th
Cong., 2d Sess., 206–207, 253–254 (October 15,
1978).
2
“Qualified benefits” are generally any benefits
excluded from income, including coverage under an
employer-provided accident or health plan under
sections 105 and 106; group-term life insurance
under section 79; elective contributions under a
qualified cash or deferred arrangement within the
meaning of section 401(k); dependent care assis-
tance under section 129; and adoption assistance
under section 137. The following are not qualified
benefits: products advertised, marketed, or offered
as long-term care insurance; medical savings
accounts under section 106(b); qualified scholar-
ships under section 117; educational assistance pro-
grams under section 127; and fringe benefits under
section 132. Qualified benefits can be provided
under a cafeteria plan either through insured
arrangements or arrangements that are not insured.
3
49 FR 19321 (May 7, 1984) and 54 FR 9460
(March 7, 1989), respectively.
4
Those proposed regulations contain special rules
with respect to flexible spending arrangements. A
flexible spending arrangement (FSA) is defined in
section 106(c)(2). Under section 106(c)(2), an FSA
is generally a benefit program under which the max-
imum reimbursement reasonably available for cov-
erage is less than 500% of the value of the coverage.
5
62 FR 60196 (November 7, 1997) and 62 FR
60165 (November 7, 1997), respectively. IRS
Announcement 98–105 (1998–49 I.R.B. 21
(November 23, 1998)) states that the Service will
amend the effective date of these temporary regula-
tions (§1.125–4T) and proposed regulations
(§1.125–4) so that they will not be effective before
plan years beginning at least 120 days after further
guidance is issued.

coverage change is made under a plan of
the employer of an employee’s spouse or
dependent. These proposed regulations
include a variety of examples illustrating
how the rules apply in specific situations.
B. Change in Status.
The proposed regulations published in
this notice of proposed rulemaking com-
plement the final regulations being pub-
lished in T.D. 8878, page 857, with re-
spect to special enrollment rights and
changes in status for accident or health
coverage and group-term life insurance
coverage. These proposed regulations
take into account comments received on
the 1997 temporary and proposed regula-
tions, including comments suggesting the
desirability of uniformity in the rules for
different types of qualified benefits to the
extent appropriate given the nature of the
benefits.
In response to comments, the new pro-
posed regulations address circumstances
under which a cafeteria plan may permit
an employee to change an election for de-
pendent care assistance under section 129
and adoption assistance under section 137
during a plan year. The proposed change
in status rules for dependent care assis-
tance and adoption assistance parallel the
change in status rules for accident or
health coverage and group-term life insur-
ance coverage contained in the final regu-
lations, with some additional rules spe-
cific to dependent care and adoption
assistance. For example, while a change
in the number of dependents is a status
change for other types of qualified bene-
fits, a change in the number of qualifying
individuals, as defined in section
21(b)(1), is a change in status for pur-
poses of dependent care assistance. Like-
wise, these proposed regulations allow an
additional change in status event for
adoption assistance (the commencement
or termination of an adoption proceed-
ing). The consistency rule in the pro-
posed regulations is the same as the con-
sistency rule in the final regulations, with
certain provisions that are specific to de-
pendent care and adoption assistance
changes.
6
C. Change in Cost or Coverage.
The new proposed regulations also ad-
dress election changes to reflect signifi-
cant cost and coverage changes for all
types of qualified benefits provided
under a cafeteria plan. The new proposed
regulations refine and expand upon the
approach taken in the 1989 proposed reg-
ulations at §1.125–2, Q&A-6 with re-
spect to changes in cost or coverage
under the plan. For example, in response
to comments, the new proposed regula-
tions provide that if a plan adds a new
benefit package option (such as a new
HMO option), the cafeteria plan may per-
mit affected participants to elect that op-
tion and make a corresponding election
change with respect to other benefit
package options during a period of cover-
age.
The new proposed regulations also
generally extend the cost or coverage
rules under §1.125–2, Q&A-6(b) to per-
mit election changes for self-insured ac-
cident or health plans, group-term life in-
surance, dependent care assistance and
adoption assistance coverage under a
cafeteria plan. Thus, for example, if the
cost of a self-insured accident or health
plan increases, a plan may automatically
make a corresponding change in the
salary reduction charge. In addition, the
new proposed regulations treat a change
of dependent care provider as similar to
the addition of a new HMO option under
an accident or health plan, with the result
that a corresponding election change can
be made when one dependent care
provider is replaced by another. While
the coverage change rules apply to de-
pendent care regardless of whether the
dependent care provider is related to the
employee, the cost change rules do not
apply to dependent care if the dependent
care provider is a relative of the em-
ployee making the election.
Commentators on the 1997 temporary
and proposed regulations also raised a
concern that when the plan of the em-
ployer of a spouse conducts annual open
enrollment for group health benefits be-
ginning at a different time of the year
than the annual open enrollment for
group health benefits offered by the em-
ployee’s employer, the employee is un-
necessarily restricted from making elec-
tion changes that correspond with
elections made by the employee’s spouse.
These commentators suggested that if
one spouse makes an election change
during an open enrollment period, a cor-
responding change should be permitted
for the other spouse. In response to these
comments, the new proposed regulations
provide that a cafeteria plan may permit
an employee to make an election change,
during a period of coverage, correspond-
ing with an open enrollment period
change made by a spouse or dependent
when the plan of that individual’s em-
ployer has a different period of coverage.
In addition, the new proposed regula-
tions provide that a cafeteria plan may
permit an employee to make an election
change in the event that a spouse or de-
pendent makes an election change under
a cafeteria plan (or qualified benefits
plan) maintained by that individual’s em-
ployer, provided that the spouse or de-
pendent’s election change satisfies the
election change rules under the proposed
regulation. For example, under this pro-
vision, if the plan of a spouse’s employer
adds a new HMO option to its group
health plan, and the spouse elects to en-
roll the family in that new option, a cafe-
teria plan may permit the employee to
drop family coverage. These new rules
apply only if the change made by the em-
ployee is on account of and corresponds
with the change made under the other
employer’s plan. This expansion of the
existing cost or coverage change rules
permits employees to make election
changes to ensure consistent coverage of
family members and eliminate duplicate
coverage.
The cost or coverage rules in the new
proposed regulations have not been ex-
tended to health flexible spending
arrangements. This ensures that those
arrangements will not permit election
changes in a manner that is inconsistent
with the requirement, under §§1.125–1,
Q&A-17 and 1.125–2, Q&A-7 of the ex-
isting proposed regulations, that such
arrangements exhibit the risk-shifting
and risk-distribution characteristics of in-
surance.
Although the final regulations (T.D.
8878, page 857) permit election changes
in the event an individual becomes eligi-
ble (or loses eligibility) for Medicare or
Medicaid, these proposed regulations do
not address election changes to reflect an
individual’s eligibility for other govern-
April 10, 20008722000–15 I.R.B.
6
Conforming changes have also been made to
Q&A-8 of the 1984 proposed regulations under
§1.125-1.

ment programs that pay for or subsidize
health coverage.
7
For example, the new
rules do not address the possibility that
an employee’s child may cease to be eli-
gible for coverage under a state’s chil-
dren’s health insurance program (CHIP)
designed in accordance with Title XXI of
the Social Security Act.
8
Comments are
requested on whether eligibility or ineli-
gibility for such a government program
should be added to the types of events
that allow a cafeteria plan election
change (including any special adminis-
trative difficulties that employers might
have in identifying this type of event)
and, if so, the types of government pro-
grams that should be permitted to be
taken into account.
D. Effective Date and Reliance.
The new proposed regulations do not
specify a proposed effective date. Any ef-
fective date will be prospective, and com-
ments are requested on the extent of lead
time necessary for employers to be able to
implement the new proposed regulations
after they are adopted as final regulations.
Until the effective date of further guid-
ance, taxpayers may rely on the new pro-
posed regulations. In addition, until the
effective date of further guidance, taxpay-
ers may continue to rely on the change in
family status rules in the existing pro-
posed regulations (at §1.125–2, Q&A-
6(c)) with respect to benefits other than
accident and health coverage and group-
term life insurance coverage, and on the
cost or coverage change rules in the exist-
ing proposed regulations (at §1.125–2,
Q&A-6(b)) with respect to all types of
qualified benefits.
Special Analyses
It has been determined that this notice
of proposed rulemaking is not a signifi-
cant regulatory action as defined in Exec-
utive Order 12866. Therefore, a regula-
tory assessment is not required. It also
has been determined that section 553(b)
of the Administrative Procedure Act (5
U.S.C. chapter 5) do not apply to these
regulations, and because the regulations
do not impose a collection of information
on small entities, the Regulatory Flexibil-
ity Act (5 U.S.C. chapter 6) does not
apply. Pursuant to section 7805(f) of the
Internal Revenue Code, these proposed
regulations will be submitted to the Chief
Counsel for Advocacy of the Small Busi-
ness Administration for comment on their
impact on small business.
Comments and Public Hearing
Before these proposed regulations are
adopted as final regulations, considera-
tion will be given to any written and elec-
tronic comments (a signed original and
eight (8) copies) that are submitted timely
to the IRS. The IRS and Treasury specifi-
cally request comments on the clarity of
the proposed regulations and how they
may be made easier to understand. All
comments will be available for public in-
spection and copying. A public hearing
will be scheduled if requested in writing
by any person that timely submits written
comments. If a public hearing is sched-
uled, notice of the date, time, and place
for the hearing will be published in the
Federal Register.
Drafting Information
The principal authors of these proposed
regulations are Janet A. Laufer and Chris-
tine L. Keller, Office of the Associate
Chief Counsel (Employee Benefits and
Exempt Organizations). However, other
personnel from the IRS and Treasury De-
partment participated in their develop-
ment.
* * * * *
Partial Withdrawal of Notice of
Proposed Rulemaking
Under the authority of 26 U.S.C. 7805,
§1.125 Q&A-6(c) and (d) in the notice of
proposed rulemaking that was published
on March 7, 1989 (54 FR 9460) is with-
drawn.
Amendments to Previously Proposed
Rules
The proposed rules published on May 7,
1984 (49 FR 19321) and March 7, 1989
(54 FR 9460), and amended on November
7, 1997 (62 FR 60196), are amended as
set forth below.
Proposed Amendments to the
Regulations
Accordingly, 26 CFR part 1 is pro-
posed 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. In §1.125–1, as proposed to be
added on May 7, 1984 (49 FR 19322), in
Q&A-8, Q-8 is republished and A-8 is
amended by adding two sentences at the
end of the answer to read as follows:
§1.125–1 Questions and answers relating
to cafeteria plans.
* * * * *
Q-8: What requirements apply to par-
ticipants’ elections under a cafeteria plan?
A-8: * * * For benefit elections relating
to accident or health plans and group-term
life insurance coverage, a cafeteria plan
may permit a participant to revoke a bene-
fit election after the period of coverage
has commenced and to make a new elec-
tion with respect to the remainder of the
period of coverage under the rules set
forth in §1.125–4 pertaining to permitted
election changes. For additional rules
governing benefit elections, see
§1.125–4.
* * * * *
Par. 3. In §1.125–2, as proposed to be
added on March 7, 1989 (54 FR 9500)
and amended November 7, 1997 (62 FR
60197), in Q&A-6, Q-6 is republished
and A-6 is amended by:
1. Adding a sentence at the end of
paragraph (b)(2).
2. Revising the last sentence of para-
graph (c).
3. Revising the last sentence of para-
graph (d).
The additions and revisions read as fol-
lows:
§1.125–2 Miscellaneous cafeteria plan
questions and answers.
* * * * *
Q-6: In what circumstance may partic-
ipants revoke existing elections and make
new elections under a cafeteria plan?
A-6: * * *
(b) * * *
(2) * * * For additional rules govern-
ing cafeteria plan election changes in con-
nection with a significant cost or coverage
change, see §1.125–4.
2000–15 I.R.B.873April 10, 2000
7
The loss of coverage under a government program
may give rise to a special enrollment right under sec-
tion 9801(f) and, thus, the issue addressed here is
relevant only in cases in which the special enroll-
ment rules do not apply.
8
Added to the Social Security Act by section 4901
of the Balanced Budget Act of 1997, Public Law
105-33 (August 5, 1997).

(c) Certain changes in family status.
*** For additional rules governing cafete-
ria plan election changes in connection
with certain changes in status, see
§1.125–4.
(d) Separation from service. ***For
additional rules governing cafeteria plan
election changes in connection with an
employee’s separation from service, see
§1.125–4.
* * * * *
Par. 4. §1.125–4 is amended as fol-
lows:
1. Paragraph (c) is amended as fol-
lows:
a. Revising paragraph (c)(1)(iii).
b. Adding paragraph (c)(2)(vi).
c. Revising paragraph (c)(3)(ii).
d. Adding paragraphs (c)(4)Example
3(iii) and (c)(4)Example 9.
2. Revising paragraph (f).
3. Revising paragraph (g).
4. Revising paragraph (i)(3).
The additions and revisions read as fol-
lows:
§1.125–4 Permitted election changes.
* * * * *
(c) * * * (1) * * *
(iii) Application to other qualified ben-
efits. This paragraph (c) applies to plans
providing qualified benefits other than
those listed in paragraph (c)(1)(ii) of this
section.
(2) * * *
(vi) Adoption assistance. For purposes
of adoption assistance provided through a
cafeteria plan, the commencement or ter-
mination of an adoption proceeding.
(3) * * *
(ii) Application to other qualified bene-
fits. An election change satisfies the re-
quirements of this paragraph (c)(3) with
respect to other qualified benefits if the
election change is on account of and cor-
responds with a change in status that af-
fects eligibility for coverage under an em-
ployer’s plan. An election change also
satisfies the requirements of this para-
graph (c)(3) if the election change is on
account of and corresponds with a change
in status that affects expenses described in
section 129 (including employment-re-
lated expenses as defined in section
21(b)(2)) with respect to dependent care
assistance, or expenses described in sec-
tion 137 (including qualified adoption ex-
penses as defined in section 137(d)) with
respect to adoption assistance.
* * * * *
(4) * * *
Example 3. * * *
(iii) In addition, under paragraph (f)(4) of this
section, if Fmakes an election change to cover G
under F’s employer’s plan, then Emay make a cor-
responding change to elect employee-only coverage
under P’s cafeteria plan.
* * * * *
Example 9.(i) Employee Ahas one child, B.
Employee A’s employer, X, maintains a calendar
year cafeteria plan that allows employees to elect
coverage under a dependent care FSA. Prior to the
beginning of the calendar year, Aelects salary reduc-
tion contributions of $4,000 during the year to fund
coverage under the dependent care FSA for up to
$4,000 of reimbursements for the year. During the
year, Breaches the age of 13, and Awants to cancel
coverage under the dependent care FSA.
(ii) When Bturns 13, Bceases to satisfy the defi-
nition of “qualifying individual” under section
21(b)(1) of the Internal Revenue Code. Accord-
ingly, B’s attainment of age 13 is a change in status
under paragraph (c)(2)(iv) of this section that affects
A’s employment-related expenses as defined in sec-
tion 21(b)(2). Therefore, Amay make a correspond-
ing change under X’s cafeteria plan to cancel cover-
age under the dependent care FSA.
* * * * *
(f) Significant cost or coverage
changes— (1) In general. Paragraphs
(f)(2) through (5) of this section set forth
rules for election changes as a result of
changes in cost or coverage. This para-
graph (f) does not apply to an election
change with respect to a health FSA (or
on account of a change in cost or cover-
age under a health FSA).
(2) Cost changes— (i) Automatic
changes. If the cost of a qualified bene-
fits plan increases (or decreases) during a
period of coverage and, under the terms
of the plan, employees are required to
make a corresponding change in their
payments, the cafeteria plan may, on a
reasonable and consistent basis, automati-
cally make a prospective increase (or de-
crease) in affected employees’ elective
contributions for the plan.
(ii) Significant cost increases. If the
cost of a benefit package option (as de-
fined in paragraph (i)(2) of this section)
significantly increases during a period of
coverage, the cafeteria plan may permit
employees either to make a corresponding
prospective increase in their payments, or
to revoke their elections and, in lieu
thereof, to receive on a prospective basis
coverage under another benefit package
option providing similar coverage. For
example, if the cost of an indemnity op-
tion under an accident or health plan sig-
nificantly increases during a period of
coverage, employees who are covered by
the indemnity option may make a corre-
sponding prospective increase in their
payments or may instead elect to revoke
their election for the indemnity option
and, in lieu thereof, elect coverage under
an HMO option.
(iii) Application to dependent care.
This paragraph (f)(2) applies in the case
of a dependent care assistance plan only if
the cost change is imposed by a depen-
dent care provider who is not a relative of
the employee. For this purpose, a relative
is an individual who is related as de-
scribed in section 152(a)(1) through (8),
incorporating the rules of section
152(b)(1) and (2).
(3) Coverage changes— (i) Significant
curtailment. If the coverage under a plan is
significantly curtailed or ceases during a
period of coverage, the cafeteria plan may
permit affected employees to revoke their
elections under the plan. In that case, each
affected employee may make a new elec-
tion on a prospective basis for coverage
under another benefit package option pro-
viding similar coverage. Coverage under
an accident or health plan is significantly
curtailed only if there is an overall reduc-
tion in coverage provided to participants
under the plan so as to constitute reduced
coverage to participants generally.
(ii) Addition (or elimination) of benefit
package option providing similar cover-
age. If during a period of coverage a plan
adds a new benefit package option or
other coverage option (or eliminates an
existing benefit package option or other
coverage option) the cafeteria plan may
permit affected employees to elect the
newly-added option (or elect another op-
tion if an option has been eliminated)
prospectively on a pre-tax basis and make
corresponding election changes with re-
spect to other benefit package options
providing similar coverage.
(4) Change in coverage of spouse or
dependent under other employer’s plan.
A cafeteria plan may permit an employee
to make a prospective election change
that is on account of and corresponds with
a change made under the plan of the
spouse’s, former spouse’s or dependent’s
employer if - -
(i) A cafeteria plan or qualified benefits
plan of the spouse’s, former spouse’s, or
dependent’s employer permits partici-
pants to make an election change that
April 10, 20008742000–15 I.R.B.

would be permitted under paragraphs (b)
through (g) of this section (disregarding
this paragraph (f)(4)); or
(ii) The cafeteria plan permits partici-
pants to make an election for a period of
coverage that is different from the period
of coverage under the cafeteria plan or
qualified benefits plan of the spouse’s,
former spouse’s, or dependent’s em-
ployer.
(5) Examples. The following exam-
ples illustrate the application of this para-
graph (f):
Example 1. (i) A calendar year cafeteria plan is
maintained pursuant to a collective bargaining
agreement for the benefit of Employer M’s employ-
ees. The cafeteria plan offers various benefits, in-
cluding indemnity health insurance and a health
FSA. As a result of mid-year negotiations, premi-
ums for the indemnity health insurance are reduced
in the middle of the year, insurance co-payments for
office visits are reduced under the indemnity plan,
and an HMO option is added.
(ii) Under these facts, the reduction in health in-
surance premiums is a reduction in cost. Accord-
ingly, under paragraph (f)(2)(i) of this section, the
cafeteria plan may automatically decrease the
amount of salary reduction contributions of affected
participants by an amount that corresponds to the
premium change. However, the plan may not per-
mit employees to change their health FSA elections
to reflect the mid-year change in copayments under
the indemnity plan.
(iii) Also, the addition of the HMO option is an
addition of a benefit package option. Accordingly,
under paragraph (f)(3)(ii) of this section, the cafete-
ria plan may permit affected participants to make an
election change to elect the new HMO option. How-
ever, the plan may not permit employees to change
their health FSA elections to reflect differences in
copayments under the HMO option.
Example 2. (i) Employer Nsponsors a group
health plan under which employees may elect either
employee-only coverage or family health coverage.
The 12-month period of coverage under N’s cafete-
ria plan begins January 1, 2001. N’s employee, A, is
married to B. Employee Aelects employee-only
coverage under N’s plan. B’s employer, O, offers
health coverage to O’s employees under its group
health plan under which employees may elect either
employee-only coverage or family coverage. O’s
plan has a 12-month period of coverage beginning
September 1, 2001. Bmaintains individual cover-
age under O’s plan at the time Aelects coverage
under N’s plan, and wants to elect no coverage for
the plan year beginning on September 1, 2001,
which is the next period of coverage under O’s
group health plan.
(ii) Under paragraph (f)(4)(ii) of this section, N’s
cafeteria plan may permit Ato change A’s election
prospectively to family coverage under that plan ef-
fective September 1, 2001 if Bactually elects no
coverage under O’s group health plan for the plan
year beginning on September 1, 2001.
Example 3. (i) Employer Psponsors a calendar
year cafeteria plan under which employees may elect
either employee-only or family health coverage. Be-
fore the beginning of the year, P’s employee, C,
elects family coverage under P’s cafeteria plan. C
also elects coverage under the health FSA for up to
$200 of reimbursements for the year to be funded by
salary reduction contributions of $200 during the
year. Cis married to D, who is employed by Em-
ployer Q. Qdoes not maintain a cafeteria plan, but
does maintain a group health plan providing its em-
ployees with employee-only coverage. During the
calendar year, Qadds family coverage as an option
under its health plan. Delects family coverage under
Q’s plan, and Cwants to revoke C’s election for
health coverage and elect no health coverage under
P’s cafeteria plan for the remainder of the year.
(ii) Q’s addition of family coverage as an option
under its health plan constitutes a new coverage op-
tion described in paragraph (f)(3)(ii) of this section.
Accordingly, pursuant to paragraph (f)(4)(i) of this
section, P’s cafeteria plan may permit Cto revoke
C’s health coverage election if Dactually elects
family health coverage under Q’s group health plan.
Employer P’s plan may not permit Cto change C’s
health FSA election.
Example 4. (i) Employer Rmaintains a cafeteria
plan under which employees may elect accident or
health coverage under either an indemnity plan or an
HMO. Before the beginning of the year, R’s em-
ployee, Eelects coverage under the HMO at a pre-
mium cost of $100 per month. During the year, E
decides to switch to the indemnity plan, which
charges a premium of $140 per month.
(ii) E’s change from the HMO to indemnity plan
is not a change in cost or coverage under this para-
graph (f), and none of the other election change rules
under paragraphs (b) through (e) of this section
apply. While R’s health plan may permit Eto make
the change from the HMO to the indemnity plan, R’s
cafeteria plan may not permit Eto make an election
change to reflect the increased premium. Accord-
ingly, if Eswitches from the HMO to the indemnity
plan, Emay pay the $40 per month additional cost
on an after-tax basis.
Example 5. (i) Employee Ais married to Em-
ployee Band they have one child, C. Employee A’s
employer, M, maintains a calendar year cafeteria
plan that allows employees to elect coverage under a
dependent care FSA. Child Cattends X’s on site
child care center at an annual cost of $3,000. Prior
to the beginning of the year, Aelects salary reduc-
tion contributions of $3,000 during the year to fund
coverage under the dependent care FSA for up to
$3,000 of reimbursements for the year. Employee A
now wants to revoke A’s election of coverage under
the dependent care FSA, because A has found a new
child care provider.
(ii) The availability of dependent care services
from the new child care provider (whether the new
provider is a household employee or family member
of Aor Bor a person who is independent of Aand B)
is a significant change in coverage similar to a bene-
fit package option becoming available. Thus, M’s
cafeteria plan may permit Ato elect to revoke A’s
previous election of coverage under the dependent
care FSA, and make a corresponding new election to
reflect the cost of the new child care provider.
Example 6. (i) Employee Dis married to Em-
ployee Eand they have one child, F. Employee D’s
employer, N, maintains a calendar year cafeteria
plan that allows employees to elect coverage under a
dependent care FSA. Child Fis cared for by Y, D’s
household employee, who provides child care ser-
vices five days a week from 9 a.m. to 6 p.m. at an
annual cost in excess of $5,000. Prior to the begin-
ning of the year, Delects salary reduction contribu-
tions of $5,000 during the year to fund coverage
under the dependent care FSA for up to $5,000 of re-
imbursements for the year. During the year, Fbe-
gins school and, as a result, Y’s regular hours of
work are changed to five days a week from 3 p.m. to
6 p.m. Employee Dnow wants to revoke D’s elec-
tion under the dependent care FSA, and make a new
election under the dependent care FSA to an annual
cost of $4,000 to reflect a reduced cost of child care
due to Y’s reduced hours.
(ii) The change in the number of hours of work
performed by Yis a change in coverage. Thus, N’s
cafeteria plan may permit Dto reduce D’s previous
election under the dependent care FSA to $4,000.
Example 7. (i) Employee Gis married to Em-
ployee Hand they have one child, J. Employee G’s
employer, O, maintains a calendar year cafeteria
plan that allows employees to elect coverage under a
dependent care FSA. Child Jis cared for by Z, G’s
household employee, who is not a relative of Gand
who provides child care services at an annual cost of
$4,000. Prior to the beginning of the year, Gelects
salary reduction contributions of $4,000 during the
year to fund coverage under the dependent care FSA
for up to $4,000 of reimbursements for the year.
During the year, Graises Z’s salary. Employee G
now wants to revoke G’s election under the depen-
dent care FSA, and make a new election under the
dependent care FSA to an annual amount of $4,500
to reflect the raise.
(ii) The raise in Z’s salary is a significant increase
in cost under paragraph (f)(2)(ii) of this section, and
an increase in election to reflect the raise corre-
sponds with that change in status. Thus, O’s cafete-
ria plan may permit Gto elect to increase G’s elec-
tion under the dependent care FSA.
(g) Special requirements relating to the
Family and Medical Leave Act. [Re-
served]
* * * * *
(i) * * *
(3) Dependent. A dependent means a de-
pendent as defined in section 152, except
that, for purposes of accident or health cov-
erage, any child to whom section152(e) ap-
plies is treated as a dependent of both par-
ents, and, for purposes of dependent care
assistance provided through a cafeteria
plan, a dependent means a qualifying indi-
vidual (as defined in section 21(b)(1)) with
respect to the employee.
* * * * *
Robert E. Wenzel,
Deputy Commissioner
of Internal Revenue.
(Filed by the Office of the Federal Register on
March 22, 2000, 8:45 a.m., and published in the
issue of the Federal Register for March 23, 2000, 65
F.R. 15587)
2000–15 I.R.B.875April 10, 2000

April 10, 20008762000–15 I.R.B.
Substantiation of Business
Expenses; Correction
Announcement 2000–26
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Correction to final regulations.
SUMMARY: This correction relates to
final regulations (T.D. 8864, 2000–7
I.R.B. 614), which were published in the
Federal Registeron Wednesday, January
26, 2000 (65 FR 4121), relating to certain
business expenses under section 274 of
the Internal Revenue Code affecting indi-
viduals and other taxpayers who claim or
reimburse certain business expenses.
DATES: This correction is effective Janu-
ary 26, 2000.
FOR FURTHER INFORMATION CON-
TACT: Edwin B. Cleverdon at (202) 622-
4920 (not a toll-free call).
SUPPLEMENTARY INFORMATION:
Background
The final regulations that are the sub-
ject of this correction are under section
274 of the Internal Revenue Code.
Need for Correction
As published, the final regulations (TD
8864) contain an omission in need of cor-
rection.
Correction of Publication
Accordingly, the publication of the
final regulations in TD 8864, which were
the subject of FR Doc. 00–1382, is cor-
rected as follows:
§1.274–5 [Corrected]
1. On page 4123, column 1, in
§1.274–5(c), add paragraphs (c)(3)
through (7) to read as follows:
§1.274–5 Substantiation requirements.
* * * * *
(c) * * *
(3) through (7) [Reserved]. For further
guidance, see §1.274–5T(c)(3) through
(7).
* * * * *
Dale D. Goode,
Federal Register Liaison,
Assistant Chief Counsel (Corporate).
(Filed by the Office of the Federal Register on
March 22, 2000, 8:45 a.m., and published in the
issue of the Federal Register for March 23, 2000, 65
F.R. 15547)
Compliance Monitoring and
Miscellaneous Issues Relating to
the Low-Income Housing Credit;
Correction
Announcement 2000–27
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Correction to final regulations.
SUMMARY: This document contains
corrections to final regulations (T.D.
8859, 2000–5 I.R.B. 429), which were
published in the Federal Registeron Fri-
day, January 14, 2000 (65 FR 2323), af-
fecting owners of low-income housing
projects who claim the credit and the
Agencies who administer the credit.
DATES: This correction is effective Janu-
ary 1, 2001.
FOR FURTHER INFORMATION CON-
TACT: Paul Handleman at (202) 622-
3040 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The final regulations that are the sub-
ject of these corrections relate to owners
of low-income housing projects who
claim the credit and the Agencies who ad-
minister the credit.
Need for Correction
As published, the final regulations (TD
8859) contain errors that are in need of
clarification.
Correction of Publication
Accordingly, the publication of the
final regulations (TD 8859), which were
the subject of FR Doc. 00–111, is cor-
rected as follows:
§1.42–5 [Corrected]
1. On page 2327, column 2,
§1.42–5(c)(1)(xi), line 14, the language
“1537s” is corrected to read “1437f”.
§1.42–6 [Corrected]
2. On page 2328, column 1, Instruc-
tional Par. 3, paragraph 1, in line 4, the
language “Report”” is corrected to read
“Report,”” and in line 6, the language
“Report’” is corrected to read “Report,’”.
Dale D. Goode,
Federal Register Liaison,
Assistant Chief Counsel (Corporate).
(Filed by the Office of the Federal Register on
March 27, 2000, 8:45 a.m., and published in the
issue of the Federal Register for March 28, 2000, 65
F.R. 16317)
Section 663(c); Separate Share
Rules Applicable to Estates;
Correction
Announcement 2000–28
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Correction to final regulations.
SUMMARY: This document contains
corrections to final regulations (T.D.
8849, 2000–2 I.R.B. 245), which were
published in the Federal Registeron
Tuesday, December 28, 1999 (64 FR
72540), relating to separate share rules
applicable to estates under section 663(c)
of the Internal Revenue Code.
DATES: This correction is effective De-
cember 28, 1999.
FOR FURTHER INFORMATION CON-
TACT: Laura Howell at (202) 622-3060
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The final regulations that are the sub-
ject of this correction are under 663(c) of
the Internal Revenue Code.
Need for Correction
As published, the final regulations (TD
8849) contain errors that may prove to be
misleading and are in need of clarifica-
tion.
Correction of Publication
Accordingly, the publication of the
final regulations (TD 8849), which were
the subject of FR Doc. 99–32694, is cor-
rected as follows:

1. On page 72542, in the preamble, 3
rd
column, under the heading “Effective
Dates”, line 4, the language “with respect
to decedents who die after” is corrected to
read “with respect to decedents who die
on or after”.
§1.663(c)–5 [Corrected]
2. On page 72544, column 3,
§1.663(c)–5 Example 4(i), lines 6 and 7,
the language, “the child in the amount
needed to reduce the estate taxes to zero
and a bequest of the” is corrected to read
“the child of the largest amount that can
pass free of Federal estate tax and a be-
quest of the”.
§1.663(c)–6 [Corrected]
3. On page 72545, column 3,
§1.663(c)–6, line 5, the language “dece-
dents who die after December 28,” is cor-
rected to read “decedents who die on or
after December 28,”.
Dale D. Goode,
Federal Register Liaison,
Assistant Chief Counsel (Corporate).
(Filed by the Office of the Federal Register on
March 27, 2000, 8:45 a.m., and published in the
issue of the Federal Register for March 28, 2000, 65
F.R. 16317)
Travel and Tour Activities of Tax-
Exempt Organizations; Correction
Announcement 2000–29
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Correction to final regula-
tions.
SUMMARY: This document contains
corrections to final regulations (T.D.
8874, 2000–8 I.R.B. 644), which were
published in the Federal Registeron
Monday, February 7, 2000 (65 FR 5771),
clarifying when the travel and tour activi-
ties of tax-exempt organizations are sub-
stantially related to the purposes of which
exemptions was granted.
DATES: This correction is effective Feb-
ruary 7, 2000.
FOR FURTHER INFORMATION CON-
TACT: Robin Ehrenberg at (202) 622-
6080 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The final regulations that are the sub-
ject of these corrections are under section
513 of the Internal Revenue Code.
Need for Correction
As published, the final regulations (TD
8874) contain errors that may prove to be
misleading and are in need of clarifica-
tion.
Correction of Publication
Accordingly, the publication of the
final regulations (TD 8874), which were
the subject of FR Doc. 00–2154, is cor-
rected as follows:
1. On page 5772, in the first column,
under the caption “Background”, in the
last line of the first paragraph, the language,
“circumstances test in four situations” is
corrected to read “circumstances test”.
§1.513–7 [Corrected]
2.On page 5774, third column, in
§1.513–7(b) Example7, line 10, the lan-
guage, “contribution to W of q dollars.
Each year, W” is corrected to read “con-
tribution to W of $q. Each year, W”.
Dale D. Goode,
Federal Register Liaison,
Assistant Chief Counsel (Corporate).
(Filed by the Office of the Federal Register on
March 24, 2000, 8:45 a.m., and published in the
issue of the Federal Register for March 27, 2000, 65
F.R. 16143)
Passive Foreign Investment
Companies; Definition of Market-
able Stock; Correction
Announcement 2000–30
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Correction to final regulations.
SUMMARY: This document contains a
correction to final regulations (T.D. 8867,
2000–7 I.R.B. 620), which were pub-
lished in the Federal Registeron Tues-
day, January 25, 2000 (65 FR 3817), re-
lating to the new mark-to-market election
for stock of a passive foreign investment
company.
DATES: This correction is effective Janu-
ary 25, 2000.
FOR FURTHER INFORMATION CON-
TACT: Robert Laudeman at (202) 622-
3840 (not a toll-free call).
SUPPLEMENTARY INFORMATION:
Background
The final regulations that are the sub-
ject of this correction are under section
1296 of the Internal Revenue Code.
Need for Correction
As published, the final regulations (TD
8867) contain an error in the title of the
official signing the document.
Correction of Publication
Accordingly, the publication of the
final regulations (TD 8867), which were
the subject of FR Doc. 00–1530, is cor-
rected as follows:
1. On page 3820, third column, at the
end of TD 8867, the title of the official
signing the document, “Assistant Secre-
tary of the Treasury.” is corrected to read
“Acting Assistant Secretary of the Trea-
sury (Tax Policy).”
Dale D. Goode,
Federal Register Liaison,
Assistant Chief Counsel (Corporate).
(Filed by the Office of the Federal Register on
March 23, 2000, 8:45 a.m., and published in the
issue of the Federal Register for March 24, 2000, 65
F.R. 15862)
General Revision of Regulations
Relating to Withholding of Tax on
Certain U.S. Source Income Paid
to Foreign Persons and Related
Collection, Refunds, and Credits;
Revision of Information Report-ing
and Backup Withholding Regu-
lations; and Removal of Regu-
lations Under Parts 1 and 35a and
of Certain Regulations Under
Income Tax Treaties; Correction
Announcement 2000–31
AGENCY: Internal Revenue Service
(IRS), Treasury.
2000–15 I.R.B.877April 10, 2000

ACTION: Correction to final regulations.
SUMMARY: This document contains
corrections to final regulations (T.D.
8856, 2000–3 I.R.B. 298), which were
published in the Federal Registeron
Thursday, December 30, 1999 (64 FR
73408) relating to the withholding of in-
come tax on certain U.S. source income
payments to foreign persons.
DATES: This correction is effective Janu-
ary 1, 2001.
FOR FURTHER INFORMATION CON-
TACT: Laurie Hatten-Boyd at (202) 622-
3840 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The final regulations that are subject to
these corrections provide guidance under
sections 1441, 1442, and 1443 of the In-
ternal Revenue Code.
Need for Correction
As published, the final regulations (TD
8856) contain errors that may prove to be
misleading and are in need of clarification.
Correction of Publication
Accordingly, the publication of the
final regulations (TD 8856), which were
the subject of FR Doc. 99–33515, is cor-
rected as follows:
§1.1441–1 [Corrected]
1. On page 73409, column 2,
§1.1441–1(f)(2)(i), line 24, the language,
“valid after December 31, 2001. The
rule” is corrected to read “valid after De-
cember 31, 2000. The rule”.
§1.1441–6 [Corrected]
2. On page 73410, column 2,
§1.1441–6(g)(2), line 10, the language
“Form 1001 or 8233 is valid on or after”
is corrected to read “Form 1001 or 8233
that is valid on or after”.
Dale D. Goode,
Federal Register Liaison,
Assistant Chief Counsel (Corporate).
(Filed by the Office of the Federal Register on
March 27, 2000, 8:45 a.m., and published in the
issue of the Federal Register for March 28, 2000, 65
F.R. 16319)
Passthrough of Items of an S
Corporation to its Shareholders;
Correction
Announcement 2000–32
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Correction of a correction to
final regulations.
SUMMARY: This document contains a
correction to Announcement 2000–18
(2000–13 I.R.B. 846) relating to the
passthrough of items of an S corporation
to its shareholders, the adjustments to the
basis of stock of the shareholders, and the
treatment of distributions by an S corpo-
ration.
DATES: This correction is effective De-
cember 22, 1999.
FOR FURTHER INFORMATION CON-
TACT: Martin Schaffer, Deane Burke, or
David Shulman at (202) 622-3070, or
Brenda Stewart at (202) 622-3120 (not
toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
The correction to final regulations that
are subject to this correction is under sec-
tions 1366, 1367, and 1368 of the Internal
Revenue Code.
Need for Correction
As published, the correction to final
regulations (TD 8852) contains a typo-
graphical error that may prove to be mis-
leading and is in need of clarification.
Correction of Publication
Accordingly, the publication of the cor-
rection of the final regulations (TD 8852),
which was the subject of FR Doc.
00–5244, is corrected as follows:
§1.1367–1 [Corrected]
1. On page 12471, third column, the
penultimate line of the correction for
§1.1367–1, the reference “§1.1377(b)(1)”
is corrected to read “§1.1377–1(b)(1)”.
Dale D. Goode,
Federal Register Liaison,
Assistant Chief Counsel (Corporate).
(Filed by the Office of the Federal Register on
March 27, 2000, 8:45 a.m., and published in the
issue of the Federal Register for March 28, 2000, 65
F.R. 16318)
Recharacterizing Financing
Arrangements Involving Fast-
Pay Stock; Correction
Announcement 2000–33
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Correction to final regulations.
SUMMARY: This document contains
corrections to final regulations (T.D.
8853, 2000–4 I.R.B. 377) published in the
Federal Register on January 10, 2000 (65
FR 1310), that recharacterize, for tax
purposes, financing arrangements involv-
ing fast-pay stock.
DATES: This correction is effective Janu-
ary 10, 2000.
FOR FURTHER INFORMATION CON-
TACT: Jonathan Zelnik, (202) 622-3920
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The final regulations that are the sub-
ject of this correction are under section
7701(l) of the Internal Revenue Code.
Need for Correction
As published, the final regulations (TD
8853) contain an error that may prove to be
misleading and is in need of clarification.
Correction of Publication
Accordingly, the publication of the
final regulations (TD 8853), which were
the subject of FR Doc. 00–114, is cor-
rected as follows:
§1.7701(l)–3 [Corrected]
1. On page 1316, in
§1.7701(l)–3(g)(2)(iii) Example 1, para-
graph (ii)(C)(2), in the third column of the
table, the heading “Amortizable premium”
is corrected to read “Accrued discount”.
Dale D. Goode,
Federal Register Liaison,
Assistant Chief Counsel (Corporate).
April 10, 20008782000–15 I.R.B.

(Filed by the Office of the Federal Register on
March 27, 2000, 8:45 a.m., and published in the
issue of the Federal Register for March 28, 2000, 65
F.R. 16316)
General Rules for Making and
Maintaining Qualified Electing
Fund Elections; Correction
Announcement 2000–34
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Correction of final regulations.
SUMMARY: This document contains
corrections to final regulations (T.D.
8870, 2000–8 I.R.B. 647), which were
published in the Federal Registeron
Monday, February 7, 2000 (65 FR 5777),
relating to a passive foreign investment
company (PFIC) shareholder that makes
the election under section 1295 to treat
the PFIC as a qualified electing fund, and
for PFIC shareholders that wish to make a
section 1295 election that will apply on a
retroactive basis.
DATES: This correction is effective Feb-
ruary 7, 2000.
FOR FURTHER INFORMATION CON-
TACT: Margaret A. Fung, (202) 622-
3840 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The final regulations that are the sub-
ject of these corrections are under sec-
tions 1291, 1293, 1295 and 1298 of the
Internal Revenue Code.
Need for Correction
As published, the final regulations (TD
8870) contain errors that are in need of
clarification.
Correction of Publication
Accordingly, the publication of the
final regulations (TD 8870), which were
the subject of FR Doc.00–1892, is cor-
rected as follows:
PART 1—[Corrected]
1. On page 5779, beginning in column
1, instructional Paragraph 1. and the author-
ity citation are corrected to read as follows:
Paragraph 1. The authority citation for
part 1 is amended by removing the entries
for 1.1291–1T, 1.1293–1T, 1.1295–1T,
and 1.1295–3T, and by adding entries in
numerical order to read in part as fol-
lows:”
Authority: 26 U.S.C. 7805 * * *
Sec. 1.1291–1 also issued under 26
U.S.C. 1291. * * *
Sec. 1.1293–1 also issued under 26
U.S.C. 1293. * * *
Sec. 1.1295–1 also issued under 26
U.S.C. 1295.
Sec. 1.1295–3 also issued under 26
U.S.C. 1295. * * *
§1.1293–0 [Corrected]
2. On page 5779, column 2, a new in-
structional paragraph 2a. is added to read
as follows:
Par. 2a. Section 1.1293–0 is amended by:
1. Removing the reference
“1.1293–1T” in the introductory text of
the section and adding “1.1293–1” in its
place.
2. Removing the “T” and the paren-
thetical “(temporary)” from the entry for
§1.1293–1T.
§1.1295–0 [Corrected]
3. On page 5779, column 2, instruction
5 of instructional Par. 4. is corrected by
removing the reference “1.195–3”, and
adding “1.1295–3” in its place.
Dale D. Goode,
Federal Register Liaison,
Assistant Chief Counsel (Corporate).
(Filed by the Office of the Federal Register on
March 27, 2000, 8:45 a.m., and published in the
issue of the Federal Register for March 28, 2000, 65
F.R. 16319)
2000–15 I.R.B.879April 10, 2000

April 10, 2000i2000–15 I.R.B.
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplified describes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus,
if an earlier ruling held that a principle
applied to A, and the new ruling holds
that the same principle also applies to B,
the earlier ruling is amplified. (Compare
with modified, below).
Clarified is used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously
published ruling and points out an essen-
tial difference between them.
Modified is used where the substance
of a previously published position is
being changed. Thus, if a prior ruling
held that a principle applied to A but not
to B, and the new ruling holds that it ap-
plies to both A and B, the prior ruling is
modified because it corrects a published
position. (Compare with amplified and
clarified, above).
Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used
in a ruling that lists previously published
rulings that are obsoleted because of
changes in law or regulations. A ruling
may also be obsoleted because the sub-
stance has been included in regulations
subsequently adopted.
Revoked describes situations where the
position in the previously published rul-
ing is not correct and the correct position
is being stated in the new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a pe-
riod of time in separate rulings. If the
new ruling does more than restate the
substance of a prior ruling, a combination
of terms is used. For example, modified
and superseded describes a situation
where the substance of a previously pub-
lished ruling is being changed in part and
is continued without change in part and it
is desired to restate the valid portion of
the previously published ruling in a new
ruling that is self contained. In this case
the previously published ruling is first
modified and then, as modified, is super-
seded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and
that list is expanded by adding further
names in subsequent rulings. After the
original ruling has been supplemented
several times, a new ruling may be pub-
lished that includes the list in the original
ruling and the additions, and supersedes
all prior rulings in the series.
Suspended is used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.
Abbreviations
The following abbreviations in current use and for-
merly used will appear in material published in the
Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C.—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contribution Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign Corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statements of Procedral Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.
Definition of Terms

2000–15 I.R.B.iiApril 10, 2000
Numerical Finding List
1
Bulletins 2000–1 through 2000–14
Announcements:
2000–1, 2000–2 I.R.B. 294
2000–2, 2000–2 I.R.B. 295
2000–3, 2000–2 I.R.B. 296
2000–4, 2000–3 I.R.B. 317
2000–5, 2000–4 I.R.B. 427
2000–6, 2000–4 I.R.B. 428
2000–7, 2000–6 I.R.B. 586
2000–8, 2000–6 I.R.B. 586
2000–9, 2000–9 I.R.B. 733
2000–10, 2000–9 I.R.B. 733
2000–11, 2000–10 I.R.B. 739
2000–12, 2000–12 I.R.B. 835
2000–13, 2000–11 I.R.B. 771
2000–14, 2000–11 I.R.B. 772
2000–15, 2000–12 I.R.B. 837
2000–16, 2000–12 I.R.B. 837
2000–17, 2000–13 I.R.B. 846
2000–18, 2000–13 I.R.B. 846
2000–24, 2000–14 I.R.B. 855
2000–25, 2000–14 I.R.B. 855
Notices:
2000–1, 2000–2 I.R.B. 288
2000–2, 2000–9 I.R.B. 727
2000–3, 2000–4 I.R.B. 413
2000–4, 2000–3 I.R.B. 313
2000–5, 2000–3 I.R.B. 314
2000–6, 2000–3 I.R.B. 315
2000–7, 2000–4 I.R.B. 419
2000–8, 2000–4 I.R.B. 420
2000–9, 2000–5 I.R.B. 449
2000–10, 2000–5 I.R.B. 451
2000–11, 2000–6 I.R.B. 572
2000–12, 2000–9 I.R.B. 727
2000–13, 2000–9 I.R.B. 732
2000–14, 2000–10 I.R.B. 737
2000–15, 2000–12 I.R.B. 826
2000–16, 2000–12 I.R.B. 826
2000–17, 2000–12 I.R.B. 827
2000–18, 2000–13 I.R.B. 845
2000–19, 2000–13 I.R.B. 845
2000–20, 2000–14 I.R.B. 851
Proposed Regulations:
REG–208280–86, 2000–8 I.R.B. 654
REG–209135–88, 2000–8 I.R.B. 681
REG–208254–90, 2000–6 I.R.B. 577
REG–209601–92, 2000–12 I.R.B. 829
REG–100276–97, 2000–8 I.R.B. 682
REG–101492–98, 2000–3 I.R.B. 326
REG–106012–98, 2000–2 I.R.B. 290
REG–110311–98, 2000–11 I.R.B. 767
REG–103831–99, 2000–5 I.R.B. 452
REG–103882–99, 2000–8 I.R.B. 706
REG–105089–99, 2000–6 I.R.B. 580
REG–105279–99, 2000–8 I.R.B. 707
REG–105606–99, 2000–4 I.R.B. 421
REG–111119–99, 2000–5 I.R.B. 455
REG–113572–99, 2000–7 I.R.B. 624
REG–116048–99, 2000–6 I.R.B. 584
REG–116567–99, 2000–5 I.R.B. 463
Proposed Regulations—continued:
REG–116704–99, 2000–3 I.R.B. 325
REG–100163–00, 2000–7 I.R.B. 633
REG–103735–00, 2000–11 I.R.B. 770
REG–103736–00, 2000–11 I.R.B. 768
Railroad Retirement Quarterly Rate:
2000–9 I.R.B. 721
Revenue Procedures:
2000–1, 2000–1 I.R.B. 4
2000–2, 2000–1 I.R.B. 73
2000–3, 2000–1 I.R.B. 103
2000–4, 2000–1 I.R.B. 115
2000–5, 2000–1 I.R.B. 158
2000–6, 2000–1 I.R.B. 187
2000–7, 2000–1 I.R.B. 227
2000–8, 2000–1 I.R.B. 230
2000–9, 2000–2 I.R.B. 280
2000–10, 2000–2 I.R.B. 287
2000–11, 2000–3 I.R.B. 309
2000–12, 2000–4 I.R.B. 387
2000–13, 2000–6 I.R.B. 515
2000–15, 2000–5 I.R.B. 447
2000–16, 2000–6 I.R.B. 518
2000–17, 2000–11 I.R.B. 766
2000–18, 2000–9 I.R.B. 722
2000–19, 2000–12 I.R.B. 785
2000–20, 2000–6 I.R.B. 553
Revenue Rulings:
2000–1, 2000–2 I.R.B. 250
2000–2, 2000–3 I.R.B. 305
2000–3, 2000–3 I.R.B. 297
2000–4, 2000–4 I.R.B. 331
2000–5, 2000–5 I.R.B. 436
2000–6, 2000–6 I.R.B. 512
2000–7, 2000–9 I.R.B. 712
2000–8, 2000–7 I.R.B. 617
2000–9, 2000–6 I.R.B. 497
2000–10, 2000–8 I.R.B. 643
2000–11, 2000–10 I.R.B. 734
2000–12, 2000–11 I.R.B. 744
2000–13, 2000–12 I.R.B. 774
2000–14, 2000–12 I.R.B. 779
2000–15, 2000–12 I.R.B. 774
2000–16, 2000–12 I.R.B. 780
2000–17, 2000–13 I.R.B. 842
2000–18, 2000–14 I.R.B. 847
2000–19, 2000–14 I.R.B. 849
Treasury Decisions:
8849, 2000–2 I.R.B. 245
8850, 2000–2 I.R.B. 265
8851, 2000–2 I.R.B. 275
8852, 2000–2 I.R.B.253
8853, 2000–4 I.R.B.377
8854, 2000–3 I.R.B.306
8855, 2000–4 I.R.B.374
8856, 2000–3 I.R.B.298
8857, 2000–4 I.R.B.365
8858, 2000–4 I.R.B.332
8859, 2000–5 I.R.B.429
8860, 2000–5 I.R.B.437
8861, 2000–5 I.R.B.441
8862, 2000–6 I.R.B.466
Treasury Decisions—continued:
8863, 2000–6 I.R.B.488
8864, 2000–7 I.R.B.614
8865, 2000–7 I.R.B.589
8866, 2000–6 I.R.B.495
8867, 2000–7 I.R.B.620
8868, 2000–6 I.R.B.491
8869, 2000–6 I.R.B.498
8870, 2000–8 I.R.B.647
8871, 2000–8 I.R.B.641
8872, 2000–8 I.R.B.639
8873, 2000–9 I.R.B.713
8874, 2000–8 I.R.B.644
8875, 2000–11 I.R.B.761
8876, 2000–11 I.R.B.753
8877, 2000–11 I.R.B.747
1
A cumulative list of all revenue rulings, revenue
procedures, Treasury decisions, etc., published in
Internal Revenue Bulletins 1999–27 through
1999–52 is in Internal Revenue Bulletin 2000–1,
dated January 3, 2000.

April 10, 2000iii2000–15 I.R.B.
Finding List of Current Actions on
Previously Published Items
1
Bulletins 2000–1 through 2000–14
Announcements:
99–50
Modified by
Rev. Proc. 2000–20, 2000–6 I.R.B. 553
Notices:
88–125
Obsoleted by
T.D. 8870, 2000–8 I.R.B. 647
92–48
Obsoleted by
Notice 2000–11, 2000–6 I.R.B. 572
97–19
Modified by
Rev. Proc. 2000–1, 2000–1 I.R.B. 4
98–22
Obsoleted by
T.D. 8870, 2000–8 I.R.B. 647
98–52
Modified by
Notice 2000–3, 2000–4 I.R.B. 413
98–61
Modified and superseded by
Rev. Proc. 2000–15, 2000–5 I.R.B. 447
99–8
Obsoleted by
Rev. Proc. 2000–12, 2000–4 I.R.B. 387
2000–4
Corrected by
Announcement 2000–9, 2000–9 I.R.B. 733
Proposed Regulations:
REG–101492–98
Corrected by
Announcement 2000–16, 2000–12 I.R.B. 837
Revenue Procedures:
80–18
Modified by
Rev. Proc. 2000–13, 2000–6 I.R.B. 515
89–9
Superseded by
Rev. Proc. 2000–20, 2000–6 I.R.B. 553
89–13
Superseded by
Rev. Proc. 2000–20, 2000–6 I.R.B. 553
90–21
Superseded by
Rev. Proc. 2000–20, 2000–6 I.R.B. 553
91–66
Superseded by
Rev. Proc. 2000–20, 2000–6 I.R.B. 553
92–13
Modified, amplified, and superseded by
Rev. Proc. 2000–11, 2000–3 I.R.B. 309
Revenue Procedures—Continued:
92–13A
Modified, amplified, and superseded by
Rev. Proc. 2000–11, 2000–3 I.R.B. 309
92–41
Superseded by
Rev. Proc. 2000–20, 2000–6 I.R.B. 553
93–9
Superseded by
Rev. Proc. 2000–20, 2000–6 I.R.B. 553
93–10
Superseded by
Rev. Proc. 2000–20, 2000–6 I.R.B. 553
94–12
Modified, amplified, and superseded by
Rev. Proc. 2000–11, 2000–3 I.R.B. 309
95–42
Superseded by
Rev. Proc. 2000–20, 2000–6 I.R.B. 553
96–13
Modified by
Rev. Proc. 2000–1, 2000–1 I.R.B. 4
98–22
Modified and superseded by
Rev. Proc. 2000–16, 2000–6 I.R.B. 518
98–27
Superseded by
Rev. Proc. 2000–12, 2000–4 I.R.B. 387
98–64
Superseded by
Rev. Proc. 2000–9, 2000–2 I.R.B. 280
98–65
Superseded by
Rev. Proc. 2000–19, 2000–12 I.R.B. 785
99–1
Superseded by
Rev. Proc. 2000–1, 2000–1 I.R.B. 4
99–2
Superseded by
Rev. Proc. 2000–2, 2000–1 I.R.B. 73
99–3
Superseded by
Rev. Proc. 2000–3, 2000–1 I.R.B. 103
99–4
Superseded by
Rev. Proc. 2000–4, 2000–1 I.R.B. 115
99–5
Superseded by
Rev. Proc. 2000–5, 2000–1 I.R.B. 158
99–6
Superseded by
Rev. Proc. 2000–6, 2000–1 I.R.B. 187
99–7
Superseded by
Rev. Proc. 2000–7, 2000–1 I.R.B. 227
99–8
Superseded by
Rev. Proc. 2000–8, 2000–1 I.R.B. 230
Revenue Procedures—Continued:
99–13
Modified and superseded by
Rev. Proc. 2000–16, 2000–6 I.R.B. 518
99–31
Modified and superseded by
Rev. Proc. 2000–16, 2000–6 I.R.B. 518
99–49
Modified and amplified by
Rev. Rul. 2000–4, 2000–4 I.R.B. 331
Rev. Rul. 2000–7, 2000–9 I.R.B. 712
Notice 2000–4, 2000–3 I.R.B. 313
99–51
Superseded by
Rev. Proc. 2000–3, 2000–1 I.R.B. 103
2000–6
Modified by
Rev. Proc. 2000–20, 2000–6 I.R.B. 553
2000–8
Modified by
Rev. Proc. 2000–16, 2000–6 I.R.B. 518
Rev. Proc. 2000–20, 2000–6 I.R.B. 553
2000–16
Corrected by
Announcement 2000–17, 2000–13 I.R.B. 846
Revenue Rulings:
88–36
Modified by
Rev. Rul. 2000–6, 2000–6 I.R.B. 512
89–89
Obsoleted by
Rev. Rul. 2000–2, 2000–3 I.R.B. 305
92–19
Supplemented by
Rev. Rul. 2000–17, 2000–13 I.R.B. 842
98–30
Amplified and superseded by
Rev. Rul. 2000–8, 2000–7 I.R.B. 617
Treasury Decisions:
8734
Modified by
T.D. 8856, 2000–3 I.R.B. 298
8804
Modified by
T.D. 8856, 2000–3 I.R.B. 298
8845
Corrected by
Announcement 2000–6, 2000–4 I.R.B. 428
8846
Corrected by
Announcement 2000–3, 2000–2 I.R.B. 296
8847
Corrected by
Announcement 2000–13, 2000–11 I.R.B. 771
8852
Corrected by
Announcement 2000–18, 2000–13 I.R.B. 846
1
A cumulative list of current actions on previously
published items in Internal Revenue Bulletins
1999–27 through 1999–52 is in Internal Revenue
Bulletin 2000–1, dated January 3, 2000.

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