Part III. Administrative, Procedural, and Miscellaneous

Regulatory Reinvention Initiative— Request For Comments

Notice 96–35

As part of the President’s Regulatory Reinvention Initiative, the Treasury Department and the Internal Revenue Service have identified obsolete regulations that relate to prior law, provide

elections for prior years, or are otherwise outdated due to changes in the underlying statutory provisions. The Treasury Department and the Internal Revenue Service believe that the regulations listed below should be withdrawn or removed.

Public comments are requested prior to August 1, 1996, regarding whether any of these regulations should be

retained. Comments should be addressed to Office of Chief Counsel, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Attn: CC:CORP:R (Regulatory Reinvention Initiative), Room 5228, Washington, D.C. 20044. For further information, contact Philip Bennet, (202) 622-3926 (not a toll-free number).

SECTION SUBJECT

1.921–1T(c) Export Trade Corporations 1.1502–81T Alaskan Native Corporations 5c.103–1, 5c.103–2 and 5c.103–3 Leases and industrial development bonds; Leases and arbitrage; Special rules for leases

FEDERAL REGISTER CITE AND PROJECT NUMBER SECTION SUBJECT

44 FR 31228 (5/31/79) (EE–16–78) 1.402(a)–1 Taxability of beneficiary under a trust which meets the 40 FR 18798 (4/30/75) requirements of section 401(a) 44 FR 31228 (5/31/79) (EE–16–78) 1.402(e)–2 Treatment of certain lump sum distributions made after 1973 44 FR 31228 (5/31/79) (EE–16–78) 1.402(e)–14 Election to treat pre-1974 participation as post-1973 participation (the ‘‘402(e)(4)(L) election’’) 40 FR 18798 (4/30/75) 1.403(a)–1 Taxability of beneficiary under a qualified annuity plan 44 FR 31228 (5/31/79) (EE–16–78) 1.403(a)–2 Capital gains treatment for certain distributions 40 FR 18798 (4/30/75)

40 FR 18798 (4/30/75) 1.405–3 Taxation of retirement bonds

26 CFR 601.602: Tax forms and instructions. (Also Part I, Sections 6012, 6061; 1.6012–5, 1.6061–1.)

Rev. Proc. 96–35

CONTENTS

SECTION 1 PURPOSE SECTION 2 BACKGROUND AND CHANGES SECTION 3 TRANSMITTED MEDIA FILING PARTICIPANTS—DEFINITIONS SECTION 4 ACCEPTANCE INTO THE 1040NR PROGRAM SECTION 5 RESPONSIBILITIES OF A 1040NR FILER SECTION 6 PENALTIES SECTION 7 FORM 8453–NR, U.S. NONRESIDENT ALIEN INCOME TAX DECLARATION FOR MAGNETIC MEDIA FILING SECTION 8 OBLIGATIONS OF A 1040NR RETURN ORIGINATOR TO THE TAXPAYER SECTION 9 DIRECT DEPOSIT OF REFUNDS SECTION 10 BALANCE DUE RETURNS SECTION 11 ADVERTISING STANDARDS FOR A 1040NR FILER AND A FINANCIAL INSTITUTION SECTION 12 MONITORING AND SUSPENSION OF A 1040NR FILER SECTION 13 ADMINISTRATIVE REVIEW PROCESS FOR DENIAL OF PARTICIPATION IN THE 1040NR PROGRAM SECTION 14 ADMINISTRATIVE REVIEW PROCESS FOR SUSPENSION FROM THE 1040NR PROGRAM SECTION 15 EFFECT ON OTHER DOCUMENTS

8

SECTION 16 EFFECTIVE DATE SECTION 17 PROJECT OFFICE INFORMATION

(8) procedures are provided for submitting balance due returns (section 10); (9) a 1040NR Filer must adhere to all relevant federal, state, and local consumer protection laws that relate to advertising and soliciting (section 11.02); (10) a 1040NR Filer may be suspended for having more than one MTFIN for the same business entity at the same location unless the Service has issued more than one MTFIN to a business entity (section 12.05(9)); and

(11) the two-year period for denial or suspension is clarified (section 12.08).