Part IV. Items — Internal Revenue Bulletin 1996-33

Notice of Proposed Rulemaking

Sale of Seized Property

GL-7-96

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking.

SUMMARY: This document contains proposed regulations relating to the sale of seized property. The proposed regulations reflect changes concerning the setting of a minimum price for seized property by the Tax Reform Act of 1986. The proposed regulations affect all sales of seized property.

DATES: Written comments and requests for a public hearing must be received by September 11, 1996.

ADDRESSES: Send submissions to: CC:DOM:CORP:R (GL-007-96), room 5228, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, DC 20044. In the alternative, submissions may be hand delivered to: CC:DOM:CORP:R (GL-007-96), room 5228, Internal Revenue Service, 1111 Constitution Avenue NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Kevin B. Connelly, (202) 622-3640 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

This document contains proposed amendments to the Procedure and Administration Regulations (26 CFR part 301) relating to the sale of seized property under section 6335 of the Internal Revenue Code (Code). The Tax Reform Act of 1986 amended section 6335(e), relating to the manner and conditions of sale, to authorize the Secretary to determine whether it would be in the best interest of the United States to buy seized property at the minimum price set by the Secretary. These proposed regulations reflect this change.

Explanation of provisions

Section 1570 of the Tax Reform Act of 1986 amended section 6335(e) of the Code to require the Secretary to determine before the sale of seized property

whether it would be in the best interest of the United States to purchase such property at the minimum price set by the Secretary. The best interest determination is to be based on criteria prescribed by the Secretary. If, at the sale, one or more persons offer at least the minimum price, the property shall be sold to the highest bidder. If no one offers at least the minimum price and the Secretary has determined that it would be in the best interest of the United States to purchase the property for the minimum price, the property will be declared sold to the United States for the minimum price. If no one offers the minimum price and the Secretary has not determined that it would be in the best interest of the United States to purchase the property for the minimum price, the property shall be released to the owner of the property and the expense of the levy and sale shall be added to the amount of tax for the collection of which the United States made the levy. Any property released shall remain subject to any lien imposed by subchapter C of chapter 64 of subtitle F of the Code.

The proposed regulations reflect the changes made by the Tax Reform Act of 1986. The regulations propose to authorize district directors to make the required determination whether it would be in the best interest of the United States to purchase seized property for the minimum price. In addition, the regulations propose to set forth factors the district director may consider when determining the best interest of the United States. The district director may consider all relevant facts and circumstances including for example: (1) marketability of the property; (2) cost of maintaining the property; (3) cost of repairing or restoring the property; (4) cost of transporting the property; (5) cost of safeguarding the property; (6) cost of potential toxic waste cleanup; and (7) other factors pertinent to the type of property.

Special Analyses

Act (5 U.S.C. chapter 6) do not apply to these regulations, and, therefore, a Regulatory Flexibility Analysis is not required. Pursuant to section 7805(f) of the Internal Revenue Code, this notice of proposed rulemaking will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

Comments and Requests for a Public Hearing

Before these proposed regulations are adopted as final regulations, consideration will be given to any written comments that are submitted timely (preferably a signed original and eight (8) copies) to the IRS. All comments will be available for public inspection and copying. A public hearing may be scheduled if requested in writing by a person that timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place for the hearing will be published in the Federal Register.

Drafting Information

The principal author of these regulations is Kevin B. Connelly, Office of Assistant Chief Counsel (General Litigation) CC:EL:GL, IRS. However, other personnel from the IRS and Treasury Department participated in their development.

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Proposed Amendments to the Regula- tions

Accordingly, 26 CFR part 301 is proposed to be amended as follows:

PART 301—PROCEDURE AND ADMINISTRATION

Paragraph 1. The authority citation for part 301 continues to read in part as follows:

Authority: 26 U.S.C. 7805 - - Par. 2. Section 301.6335-1 is amended as follows:

Paragraph (c)(3) is revised.
Paragraphs (c)(4) through (c)(9) are redesignated as paragraphs (c)(5) through (c)(10).
New paragraph (c)(4) is added. The additions and revision read as follows:

DC 20044. In the alternative, submissions may be delivered between the hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:R (IA–29–96), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue NW, Washington, DC. The public hearing will be held in the IRS Classroom (room 2617), Internal Revenue Building, 1111 Constitution Avenue NW, Washington, DC.

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Robert A. Testoff of the Office of Assistant Chief Counsel (Income Tax & Accounting) at (202) 622–4960; concerning submissions and the hearing, Christina Vasquez of the Regulations Unit, (202) 622–7190 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

The collection of information contained in this notice of proposed rulemaking has been submitted to the Office of Management and Budget (OMB) for review in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507).

Comments on the collection of information should be sent to the Office of Management and Budget, Attn: Desk Officer for the Department of the Treasury, Office of Information and Regulatory Affairs, Washington, DC 20503, with copies to the Internal Revenue Service, Attn: IRS Reports Clearance Officer, T:FP, Washington, DC 20224. Comments on the collection of information should be received by August 26, 1996. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.

The collection of information is in §§ 301.9100–2T and 301.9100–3T. This information is required for a taxpayer to obtain an extension of time to make an election. This information will be used by the IRS to determine whether to grant an extension of time to make an election. The likely respondents are businesses or other for-profit institutions, small businesses or organizations, nonprofit institutions, individuals or households, and farms.

Books or records relating to the collection of information must be retained as long as their contents may become material in the administration of any

301.6335-1 Sale of seized property.

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(c) - - (3) Determinations relating to mini- mum price —(i) Minimum price. Before the sale of property seized by levy, the district director shall determine a minimum price, taking into account the expenses of levy and sale, for which the property shall be sold. The internal revenue officer conducting the sale may either announce the minimum price before the sale begins, or defer announcement of the minimum price until after the receipt of the highest bid, in which case, if the highest bid is greater than the minimum price, no announcement of the minimum price shall be made.

(ii) Purchase by the United States. Before the sale of property seized by levy, the district director shall determine whether the purchase of property by the United States at the minimum price would be in the best interest of the United States. In determining whether the purchase of property would be in the best interest of the United States, the district director may consider all relevant facts and circumstances including for example—

( a ) Marketability of the property; ( b ) Cost of maintaining the property; ( c ) Cost of repairing or restoring the property;

( d ) Cost of transporting the property; ( e ) Cost of safeguarding the property; ( f ) Cost of potential toxic waste cleanup; and

( g ) Other factors pertinent to the type of property.

(iii) Effective date. This paragraph (c)(3) applies to determinations relating to minimum price made on or after

[date final regualtions are published in the Federal Register ].

(4) Disposition of property at sale (i) Sale to highest bidder at or above minimum price. If one or more persons offer to buy the property for at least the amount of the minimum price, the property shall be sold to the highest bidder.

(ii) Property deemed sold to United States at minimum price. If no one offers at least the amount of the minimum price for the property and the Secretary has determined that it would be in the best interest of the United States to purchase the property for the minimum price, the property shall be declared to be sold to the United States for the minimum price.

(iii) Release to owner. If the property is not declared to be sold under para

graph (c)(4)(i) or (ii) of this section, the property shall be released to the owner of the property and the expense of the levy and sale shall be added to the amount of tax for the collection of which the United States made the levy. Any property released under this paragraph (c)(4)(iii) shall remain subject to any lien imposed by subchapter C of chapter 64 of subtitle F of the Internal Revenue Code.

(iv) Effective date. This paragraph (c)(4) applies to dispositions of property at sale made on or after [date final regulations are published in the Federal Register ].

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Margaret Milner Richardson, Commissioner of Internal Revenue.

(Filed by the Office of the Federal Register on June 12, 1996, 8:45 a.m., and published in the issue of the Federal Register for June 13, 1996, 61 F.R. 30012)

Notice of Proposed Rulemaking and Notice of Public Hearing

Extensions of Time to Make Elections

IA–29–96

AGENCY: Internal Revenue Service (IRS), Treasury.

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

SUMMARY: In TD 8680, on page 5 of this issue of the Bulletin, the IRS is issuing temporary regulations relating to extensions of time for making certain elections under the Internal Revenue Code (Code). The regulations provide the standards that the Commissioner will use to grant taxpayers extensions of time for making these elections. The text of those temporary regulations also serves as the text of these proposed regulations. This document also provides notice of a public hearing on these proposed regulations.

DATES: Written comments must be received by September 25, 1996. Outlines of oral comments to be presented at the public hearing scheduled for Wednesday, October 30, 1996, at 10 a.m. must be received by October 9, 1996.

ADDRESSES: Send submissions to: CC:DOM:CORP:R (IA–29–96), room 5226, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington,

internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.

§§ 301.9100-1T through 301.9100–3T published in TD 8680, on page 5 in this issue of the Bulletin.]

Margaret Milner Richardson, Commissioner of Internal Revenue.

(Filed by the Office of the Federal Register on June 26, 1996, 8:45 a.m., and published in the issue of the Federal Register for June 27, 1996, 61 F.R. 33408)

Notice of Proposed Rulemaking

Generation-Skipping Transfer Tax

PS–22–96

AGENCY: Internal Revenue Service (IRS), Treasury

ACTION: Notice of proposed rulemaking.

SUMMARY: This document contains proposed regulations relating to the final generation-skipping transfer (GST) tax regulations under chapter 13 of the Internal Revenue Code (Code). This document proposes a change to the final regulations and is necessary to provide guidance to taxpayers so that they may comply with chapter 13 of the Code.

DATES: Written comments and requests for a public hearing must be received by September 10, 1996.

ADDRESSES: Send submissions to: CC:DOM:CORP:R (PS–22–96), room 5228, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, DC 20044. In the alternative, submissions may be hand delivered between the hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:R (PS–22–96), Courier’s Desk, Internal Revenue Service, 1111 Constitution NW., Washington, DC. 20224.

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulation, James F. Hogan, (202) 622–3090 (not a toll-free number); concerning submissions, Christina Vasquez, (202) 622– 7180, (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

On December 24, 1992, the IRS published a notice of proposed rulemaking in the Federal Register (57 FR 61356) containing proposed regulations under sections 2611, 2612, 2613, 2632, 2641, 2642, 2652, 2653, 2654, and 2663. On December 27, 1995, the IRS published final regulations in the Federal Register

Estimated total annual reporting

burden: 5,000 hours Estimated annual burden per

respondent: 10 hours. Estimated number of respondents: 500 Estimated annual frequency

of responses: Occasional

The rules of § 601.601(a)(3) apply to the hearing.

Persons that have submitted written comments by September 25, 1996, and want to present oral comments at the hearing must submit, by October 9, 1996, an outline of the topics to be discussed and the time to be devoted to each topic (signed original and eight (8) copies). A period of 10 minutes will be allotted to each person for making comments.

An agenda showing the scheduling of the speakers will be prepared after the deadline for receiving outlines has passed. Copies of the agenda will be available free of charge at the hearing.

Drafting Information

The principal author of the temporary regulations is Robert A. Testoff of the Office of Assistant Chief Counsel (Income Tax and Accounting). However, other personnel from the IRS and Treasury Department participated in their development.

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Proposed Amendments to the Regula- tions

Accordingly, 26 CFR part 301 is proposed to be amended as follows:

PART 301—PROCEDURE AND ADMINISTRATION

Paragraph 1. The authority citation for part 301 is amended by removing the entries for §§ 301.9100–1T through 301.9100–3T and adding entries in numerical order to read as follows:

Authority: 26 U.S.C. 7805 - - Section 301.9100–1 also issued under 26 U.S.C. 6081; Section 301.9100–2 also issued under 26 U.S.C. 6081; Section 301.9100–3 also issued under 26 U.S.C. 6081; - - Par. 2. Sections 301.9100–1 and 301.9100–1T through 301.9100–3T are removed.

Par. 3. Sections 301.9100–1 through 301.9100–3 are added to read as follows:

§ 301.9100–1 Extensions of time to make elections.

§ 301.9100–2 Automatic extensions.

§ 301.9100–3 Other extensions.

[The text of these above proposed sections are the same as the text of

Background

Temporary regulations in TD 8680, on page 5 of this issue of the Bulletin amend 26 CFR part 301. The temporary regulations contain rules relating to extensions of time for making certain elections.

The text of those temporary regulations also serves as the text of these proposed regulations. The preamble to the temporary regulations explains the temporary regulations.

Special Analyses

It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in EO 12866. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) and the Regulatory Flexibility Act (5 U.S.C. chapter 6) do not apply to these regulations, and, therefore, a Regulatory Flexibility Analysis is not required. Pursuant to section 7805(f) of the Internal Revenue Code, this notice of proposed rulemaking will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small businesses.

Comments and Public Hearing

Before these proposed regulations are adopted as final regulations, consideration will be given to any written comments (a signed original and eight (8) copies) that are submitted timely to the IRS. All comments will be available for public inspection and copying.

A public hearing has been scheduled for Wednesday, October 30, 1996, at 10 a.m. in the IRS Classroom (room 2617), Internal Revenue Building, 1111 Constitution Avenue NW, Washington, DC. Because of access restrictions, visitors will not be admitted beyond the building lobby more than 15 minutes before the hearing starts.

(60 FR 66898) under sections 2611, 2612, 2613, 2632, 2641, 2642, 2652, 2653, 2654, and 2663. This proposed regulation will delete § 26.2652– 1(a)(4) and two related examples.

Explanation of Provision

Section 2652(a)(1) provides generally, that the term transferor means—(A) in the case of any property subject to the tax imposed by chapter 11, the decedent, and (B) in the case of any property subject to the tax imposed by chapter 12, the donor. An individual is treated as transferring any property with respect to which the individual is the transferor. Under § 26.2652–1(a)(2), a transfer is subject to Federal gift tax if a gift tax is imposed under section 2501(a) and is subject to Federal estate tax if the value of the property is includible in the decedent’s gross estate determined under section 2031 or section 2103. Under § 26.2652–1(a)(4), the exercise of a power of appointment that is not a general power of appointment is also treated as a transfer subject to Federal estate or gift tax by the holder of the power if the power is exercised in a manner that may postpone or suspend the vesting, absolute ownership, or power of alienation of an interest in property for a period, measured from the date of the creation of the trust, extending beyond any specified life in being at the date of creation of the trust plus a period of 21 years plus, if necessary, a reasonable period of gestation.

The purpose of the rule in § 26.2652–1(a)(4) was to apply the GST tax when it may not otherwise have applied. It was never intended to (nor could it) prevent the application of the tax pursuant to the statutory provisions that apply based on the original taxable transfer. To eliminate any uncertainty concerning the proper application of the GST tax, the regulations under section 2652(a) will be clarified by eliminating § 26.2652– 1(a)(4) and Ex- ample 9 and Example 10 in § 26.2652– 1(a)(6) from the final regulations.

Proposed Effective Date

These amendments apply to transfers to trusts on or after June 12, 1996.

Special Analysis

It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in EO 12866. Therefore, a regulatory assessment is not required. It has also been

determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) and the Regulatory Flexibility Act (5 U.S.C. chapter 6) do not apply to these regulations, and therefore, a Regulatory Flexibility Analysis is not required. Pursuant to section 7805(f) of the Internal Revenue Code, the notice of proposed rulemaking preceding these regulations was submitted to the Small Business Administration for comment on its impact on small business.

Comments and Requests for a Public Hearing

Before this proposed regulation is adopted as a final regulation, consideration will be given to any written comments (a signed original and eight (8) copies) that are submitted timely to the IRS. All comments will be available for public inspection and copying. A public hearing may be scheduled if requested in writing by a person that timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place for the hearing will be published in the Federal Register.

Drafting Information

The principal author of this proposed regulation is James F. Hogan, Office of the Chief Counsel, IRS. Other personnel from the IRS and Treasury Department participated in its development.

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Proposed Amendments to the Regula- tions

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

PART 26—GENERATION-SKIPPING TRANSFER TAX REGULATIONS UNDER THE TAX REFORM ACT OF 1986

Paragraph 1. The authority citation for part 26 continues to read, in part, as follows:

Authority: 26 U.S.C. 7805 - - Par. 2 Section 26.2652–1 is amended as follows:

Paragraph (a)(4) is removed and paragraphs (a)(5) and (a)(6) are redesignated as paragraphs (a)(4) and (a)(5), respectively.
In newly designated paragraph (a)(5), Examples 9 and 10 are removed

and Example 11 is redesignated as Ex- ample 9.

Margaret Milner Richardson, Commissioner of Internal Revenue.

(Filed by the Office of the Federal Register on June 11, 1996, 8:45 a.m., and published in the issue of the Federal Register for June 12, 1996, 61 F.R. 29714)

Announcement 96–71

Assistant Commissioner (International) John T. Lyons has announced the Ninth Annual Institute on Current Issues in International Taxation, co-sponsored with The George Washington University, to be held December 12 and 13 at the J.W. Marriott Hotel in Washington, DC.

Designed for professionals in international tax law, the Institute will cover on the first day sessions with the U.S., Mexican, and Canadian Competent Authorities, treaty issues, collateral consequences of check-the-box, and a U.S. multinational update. The second day will include an ‘‘Ask the IRS’’ session, and sessions on regulatory guidance, intellectual property, and withholding regulations. IRS Commissioner Margaret Milner Richardson will be a featured luncheon speaker.

Those interested in attending may obtain more information from The George Washington University, Office of Conferences and Institutes, by calling (202) 973–1110.

Generation-Skipping Transfer Tax; Correction

Announcement 96–72

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correction to final regulations.

SUMMARY: This document contains corrections to final regulations (TD 8644 [1996–7 I.R.B. 16]) which were published in the Federal Register for Wednesday, December 27, 1995 (60 FR 66898). The final regulations relate to generation-skipping transfer tax.

EFFECTIVE DATE: December 27, 1995.

FOR FURTHER INFORMATION CONTACT: Jim Hogan (202) 622–3090 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

The final regulations that are subject to these corrections are under chapter 13 of the Internal Revenue Code.

Need for Correction

As published, the final regulations

[TD 8644] contain errors that are in need of clarification.

Correction of Publication

Accordingly, the publication of final regulations which are the subject of FR Doc. 95–30873 is corrected as follows:

On page 66899, column 1, in the preamble under the paragraph heading ‘‘Uniform Statutory Rule Against Perpetuities’’, line 13, the language ‘‘alienation of a interest in property for a’’ is corrected to read ‘‘alienation of an interest in property for a’’.
On page 66902, column 1, in the preamble under the paragraph heading ‘‘Division of a Single Trust Into Separate Trusts’’, paragraph 3, line 3 from the bottom, the language ‘‘for under the original trusts. Thus, a’’ is corrected to read ‘‘for under the original trust. Thus, a’’.

§ 26.2601–1 [Corrected]

2a. On page 66907, column 2, § 26.2601–1, paragraph (b)(1)(v)(D), Example 2, eighth line from the bottom of the paragraph, the language, ‘‘of the first addition), $200,000 (.2÷’’ is corrected to read ‘‘of the first addition), $200,000 (.2x’’.

On page 66907, column 2, § 26.2601–1, paragraph (b)(1)(v)(D), Example 4, eighth line from the bottom of the column, the language ‘‘GGC, for life. Upon GGC’s death the’’ is corrected to read ‘‘GGC, for life. Upon GGC’s death, the’’.
On page 66907, column 3, § 26.2601–1, paragraph (b)(1)(v)(D), Example 5, line 3, the language ‘‘Assume the same facts as in Example 3,’’ is corrected to read ‘‘Assume the same facts as in Example 4,’’.
On page 66909, column 2, § 26.2601–1, paragraphs (b)(3)(iii) introductory text, (b)(3)(iii)(A), (b)(3)(iii)(A)( 1 ), (b)(3)(iii)(A)( 2 ), (b)(3)(iii)(B), (b)(3)(iii)(C) are correctly designated (b)(3)(iii)(A) introductory text, (b)(3)(iii)(A)( 1 ), (b)(3)(iii)(A)( 1 )( i ), (b)(3)(iii)(A)( 1 )( ii ), (b)(3)(iii)(A)( 2 ), and (b)(3)(iii)(A)( 3 ), respectively.
On page 66909, column 2, § 26.2601–1, newly designated paragraph (b)(3)(iii)(A)(3) is corrected and paragraph (b)(3)(iii)(B) is added to read as follows:

§ 26.2601–1 Effective dates.

- - - -

(b) - - (3) - - (iii) - - (A) - - ( 3 ) Any judgement or decree relating to the decedent’s incompetency that was made after October 22, 1986.

(B) Such items in paragraphs (b)(3)(iii)(A), (B), and (C) of this section will be considered relevant, but not determinative, in establishing the decedent’s state of competency.

On page 66909, column 3, § 26.2601–1, paragraph (b)(4)(i), line 5, the language ‘‘rules in paragraph (b)(2) or (3) of this’’ is corrected to read ‘‘rules in paragraph (b)(1), (2) or (3) of this’’.
On page 66910, column 2, § 26.2601–1, paragraph (c), line 5 from the top of the column, the language ‘‘on or after [December 27, 1995].’’ is corrected to read ‘‘on or after December 27, 1995.’’.

§ 26.2612–1 [Corrected]

On page 66910, column 3, § 26.2612–1, paragraph (a)(2)(ii), lines 5 and 6, the language ‘‘the transferor would be assigned to a lower generation by reason of that’’ is corrected to read ‘‘the lineal descendant would be assigned to a higher generation by reason of that’’.
On page 66910, column 3, § 26.2612–1, paragraph (b)(1)(i), last 3 lines are corrected by removing the language ‘‘(i.e., a new transferor is determined with respect to the property)’’.

§ 26.2632–1 [Corrected]

On page 66914, column 3, § 26.2632–1, paragraph (d)(1), line 3 from the top of the column, the language ‘‘706 or Form 706NA and is effective as’’ is corrected to read ‘‘706, Form 706NA or Form 709 (filed on or before the due date of the transferor’s estate tax return) and is effective as’’.

§ 26.2642–2 [Corrected]

On page 66916, column 2, § 26.2642–2, paragraph (b)(3)(ii)(B),

line 6, the language ‘‘date of death and the date of’’ is corrected to read ‘‘valuation date and the date of’’.

§ 26.2642–4 [Corrected]

On page 66917, column 3, § 26.2642–4, paragraph (a)(3), lines 5 through 9 from the top of the column, the language ‘‘not allocated to the trust, the applicable fraction immediately before death is not changed, if the trust was not subject to an ETIP at the time GST exemption was allocated to the trust. The denominator’’ is corrected to read ‘‘not allocated to the trust, then, except as provided in this paragraph (a)(3), the applicable fraction immediately before death is not changed, if the trust was not subject to an ETIP at the time GST exemption was allocated to the trust. In any event, the denominator’’.
On page 66918, column 2, § 26.2642–4, paragraph (b), paragraph (i) of Example 5, the last line, the language ‘‘is .50 (1 � ($100,000/ $200,000 = .50)’’ is corrected to read ‘‘is .50 (1 � ($100,000/$200,000))’’.

§ 26.2652–1 [Corrected]

On page 66918, column 3, § 26.2652–1, paragraph (a)(2), line 2, the language ‘‘ or gift tax . For purposes of this section,’’ is corrected to read ‘‘ or gift tax . For purposes of this chapter,’’.
On page 66919, column 1, § 26.2652–1, paragraph (a)(2), line 3 from the top of the column, the language ‘‘2501(a). A transfer is subject to Federal’’ is corrected to read ‘‘2501(a) (without regard to exemptions, exclusions, deductions, and credits). A transfer is subject to Federal’’.
On page 66919, columns 1 and 2, § 26.2652–1, paragraph (a)(6) Example 1, last two lines in column 1 and first line in column 2, the language ‘‘benefit of T’s grandchild. The transfer is a completed gift under § 25.2511–2 of this chapter. Thus, for purposes of chapter 13, T’’ is corrected to read ‘‘benefit of T’s grandchild. The transfer is subject to Federal gift tax because a gift tax is imposed under section 2501(a) (without regard to exemptions, exclusions, deductions, and credits). Thus, for purposes of chapter 13, T’’.
On page 66919, column 2, § 26.2652–1, paragraph (a)(6), Example 5, lines 13 and 14, the language ‘‘transfer by T is a completed transfer within the meaning of § 25.2511–2 of this chapter’’ is corrected to read ‘‘transfer

by T is subject to Federal gift tax because a gift tax is imposed under section 2501(a) (without regard to exemptions, exclusions, deductions, and credits)’’.

§ 26.2654–1 [Corrected]

On page 66921, column 2, § 26.2654–1, paragraph (a)(1)(ii)(A), last line, the language ‘‘person; or’’ is corrected to read ‘‘person; and’’.
On page 66922, column 2, § 26.2654–1, paragraph (a)(5), Example 6, line 10 from the top of the column, the language ‘‘contribution is 3/4 ((2/3 x $180,000) +’’ is corrected to read ‘‘contribution is 3/4 (((2/3 x $180,000) +’’.
On page 66922, column 2, § 26.2654–1, paragraph (a)(5), Example 8, line 4 from the bottom of the paragraph, the language ‘‘same if, the trust instrument provided that’’ is corrected to read ‘‘same if the trust instrument provided that’’.
On page 66922, column 2, § 26.2654–1, paragraph (b)(1)(ii)(A), lines 1 and 2, the language ‘‘(A) The terms of each of the new trusts provide for the same succession of’’ is corrected to read ‘‘(A) The terms of the new trusts provide in the aggregate for the same succession of’’.
On page 66922, column 3, § 26.2654–1, paragraph (b)(1)(ii)(C)( 1 ), line 2 from the bottom of the paragraph, the language ‘‘measured from the date of death to the’’ is corrected to read ‘‘measured from the valuation date to the’’.

§ 26.2662–1 [Corrected]

On page 66923, column 3, § 26.2662–1, paragraph (c)(2)(vi), Ex- ample 1, line 6, the language ‘‘T’s grandchild GC, was named the sole’’ is corrected to read ‘‘T’s grandchild, GC, was named the sole’’.

§ 26.2663–2 [Corrected]

On page 66925, column 1, § 26.2663–2, paragraph (c)(2), the last line, the language ‘‘the trust).’’ is corrected to read ‘‘the trust)).’’.
On page 66925, column 2, § 26.2663–2, paragraph (d), Example 3, line 8 from the bottom of the paragraph, the language ‘‘Generation-Skipping Transfer) Tax return’’ is corrected to read ‘‘Generation-Skipping Transfer) Tax Return’’.
On page 66925, column 3, § 26.2663–2, paragraph (e), line 11, the

language ‘‘prescribed in section 2632(c). Thus, an’’ is corrected to read ‘‘prescribed in section 2632(c). Thus, a’’.

Cynthia E. Grigsby Chief, Regulations Unit Assistant Chief Counsel (Corporate)

(Filed by the Office of the Federal Register on June 11, 1996, 8:45 a.m., and published in the issue of the Federal Register for June 12, 1996, 61 F.R. 29653)

Foundations Status of Certain Organizations

Announcement 96–73

The following organizations have failed to establish or have been unable to maintain their status as public charities or as operating foundations. Accordingly, grantors and contributors may not, after this date, rely on previous rulings or designations in the Cumulative List of Organizations (Publication 78), or on the presumption arising from the filing of notices under section 508(b) of the Code. This listing does not indicate that the organizations have lost their status as organizations described in section 501(c)(3), eligible to receive deductible contributions.

Former Public Charities . The following organizations (which have been treated as organizations that are not private foundations described in section 509(a) of the Code) are now classified as private foundations: American Research Center Inc.,

Bernardino Coutinho Foundation Inc.,

Detroit, MI C Incorporated Support for Visions in

Action, Hopewell, NJ Ellis Swim Team, Philadelphia, PA Goldstone-Trust Press and Educational

Division, Great Barrington, MA Harold E. Byrd Educational Foundation,

Inc., East Bradenton, FL Isadora Duncan International, New York,

Newark, NJ Bill Gold Drive for Life Inc.,

Ridgewood, NJ Biosphere Resources Group Inc.,

Takoma Park, MD Birmingham Football Foundation, Inc.,

Birmingham, AL Black College AIDS Awareness

Foundation, Washington, DC Blacks Networking for Progress Inc.,

Philadelphia, PA Black Teenage World Educational Fund

Inc., Washington, DC Blue Mountain Community Library Inc.,

Pen Argyl, PA Bon Aqua Volunteer Fire Dept, Bon

Aqua Volunteer, TN Bulgarian-American Charitable &

Educational Center, Potomac, MD Caesar Rodney High School Cheerleader

Booster Club, Dover, DE Cambodia Development International,

Washington, DC Capella Productions Inc., Merion, PA Capital Hill Tollgate Association,

Washington, DC Captain Thomas Clifford Bland Jr

Memorial & Scholarship Fund, Gaithersburg, MD Care Group Inc., Calhoun, GA Cecil Soccer League Inc., Elkton, MD Central and Southern Africa Legal

Assistance Foundation, Harrisburg, PA Christians United in Business—CUBE,

Aberdeen, MD Arundel Singers Inc., Baltimore, MD Assisting Dads & Moms Inc., West

Long Branch, NJ Association for a Better Environment,

NY KOP Art, Inc., Brooklyn, NY Lebanon Opera House Improvement

McMurray, PA Association for Innovative Education

Inc., Philadelphia, PA Association for Puerto Ricans in Science

Corporation, Lebanon, NY Manhattan International Cultural

and Engineering, Washington, DC Association of Pharmaceutical

Technologists Incorporated, Union, NJ Atlantic City Urban Beautification

Studios, Inc., New York, NY Massachusetts Association of Women

Lawyers Scholarship Trust, Boston, MA Massachusetts Vigil Society

Corporation, Ipswich, MA Mayors Youth Leadership Corps, Inc.,

Committee Inc., Atlantic City, NJ Autumn Place Inc., Frederick, MD Aware Safety Group Inc., Richmond,

Boston, MA Medius Corporation, New York, NY Melrose Launch, Inc., Melrose, MA Merrimack County Mental Health

VA Bangladesh Society of NJ Inc.,

Lawrenceville, NJ Bergmans Butterflies Parents

Association, Mays Landing, NJ

Consumers Association, Concord, NH Minnesota Decoy Foundation, St. Paul,

Monadnock Area Foster Parent Support

Valley Grove School District

Group, Keene, NH Music Mobile International, Inc., New

York, NY Nash County Foundation to Reduce the

Scholarship Fund, Franklin, PA Whitfield Education Foundation, Inc.,

Dalton, GA Youth Hi Tech ZK Inc., Silver Spring,

Use of Drugs, Nashville, TN National Cancer Research Center, Inc.,

Aberdeen, MD Northwest Community and Business

Council, Inc., Lake Wales, FL Paralysis Research Organization,

Littleton, MA Parents Teachers Advisory Group,

Fitchburg, MA Pasos Bailandos Therapeutic Riding

Center, Bridgeton, ME Planet Well Incorporated, Tallahassee,

FL Precious Jewels Day Care Center, Inc.,

Buffalo, NY P.S. 234 Parents and Teachers

Association, Inc., New York, NY Quidditas, Inc., Salem, NY Recreational Association for Deaf Youth,

MD If an organization listed above submits information that warrants the renewal of its classification as a public charity or as a private operating foundation, the Internal Revenue Service will issue a ruling or determination letter with the revised classification as to foundation status. Grantors and contributors may thereafter rely upon such ruling or determination letter as provided in section 1.509(a)–7 of the Income Tax Regulations. It is not the practice of the Service to announce such revised classification of foundation status in the Internal Revenue Bulletin.

no longer qualifies. However, the Service is not precluded from disallowing a deduction for any contributions made after an organization ceases to qualify under section 170(c)(2) if the organization has not timely filed a suit for declaratory judgment under section 7428 and if the contributor (1) had knowledge of the revocation of the ruling or determination letter, (2) was aware that such revocation was imminent, or (3) was in part responsible for or was aware of the activities or omissions of the organization that brought about this revocation.

If on the other hand a suit for declaratory judgment has been timely filed, contributions from individuals and organizations described in section 170(c)(2) that are otherwise allowable will continue to be deductible. Protection under section 7428(c) would begin on August 12, 1996, and would end on the date the court first determines that the organization is not described in section 170(c)(2) as more particularly set forth in section 7428(c)(1). For individual contributors, the maximum deduction protected is $1,000, with a husband and wife treated as one contributor. This benefit is not extended to any individual who was responsible, in whole or in part, for the acts or omissions of the organization that were the basis for revocation. Fellowship Outreach Ministries, Inc.

Inc., Avon, MA Relapse Preventions Therapy and

Preventive Measure, Inc., Providence, RI Serving Our Selves, Inc., Bronx, NY Shaw Memorial Ame Zion Church

Gathering, Providence, RI Shelter Works, Inc., Bloomfield, CT Spiritual Vision, Inc., Tallahassee, FL Sugarloaf Foundation, Gray, ME Take-One Theatre Arts, Inc., St. James,

NY Tilton-Northfield Baseball Organization,

Tilton, NH Turnpike Camerata, Inc., New York, NY

Deletions from Cumulative List of Organizations Contributions to Which Are Deductible Under Section 170 of the Code

Announcement 96–74

The names of organizations that no longer qualify as organizations described in section 170(c)(2) of the Internal Revenue Code of 1986 are listed below.

Generally, the Service will not disallow deductions for contributions made to a listed organization on or before the date of announcement in the Internal Revenue Bulletin that an organization

Jacksonville, FL Fund for the Duluth Clinic

Duluth, MN

Numerical Finding List ¹

Bulletins 1996–27 through 1996–32

Announcements: 96–61, 1996–27 I.R.B. 72 96–62, 1996–28 I.R.B. 55 96–63, 1996–29 I.R.B. 18 96–64, 1996–29 I.R.B. 18 96–65, 1996–29 I.R.B. 18 96–66, 1996–29 I.R.B. 19 96–67, 1996–30 I.R.B. 27 96–68, 1996–31 I.R.B. 45 96–69, 1996–32 I.R.B. 38 96–70, 1996–32 I.R.B. 40

Notices: 96–36, 1996–27 I.R.B. 11 96–37, 1996–31 I.R.B. 29 96–38, 1996–31 I.R.B. 29 96–39, 1996–32 I.R.B. 8

Proposed Regulations: CO–24–96, 1996–30 I.R.B. 22 CO–25–96, 1996–31 I.R.B. 30 CO–26–96, 1996–31 I.R.B. 31 FI–28–96, 1996–31, I.R.B. 33 FI–48–95, 1996–31 I.R.B. 36 FI–59–94, 1996–30 I.R.B. 23 IA–26–94, 1996–30 I.R.B. 24 IA-292-84, 1996–28 I.R.B. 38

Railroad Retirement Quarterly Rate 1996–29 I.R.B. 14

Revenue Procedures:

96–36, 1996–27 I.R.B. 11 96–37, 1996–29 I.R.B. 16 96–40, 1996–32 I.R.B. 8 96–41, 1996–32 I.R.B. 9 96–42, 1996–32 I.R.B. 14

Revenue Rulings:

96–33, 1996–27 I.R.B. 4 96–34, 1996–28 I.R.B. 4 96–35, 1996–31 I.R.B. 4 96–36, 1996–30 I.R.B. 6 96–37, 1996–32 I.R.B. 4

Tax Conventions:

1996–28 I.R.B. 36

Treasury Decisions: 8673, 1996–27 I.R.B. 4 8674, 1996–28 I.R.B. 7 8675, 1996–29 I.R.B. 5 8676, 1996–30 I.R.B. 4 8677, 1996–30 I.R.B. 7 8678, 1996–31 I.R.B. 11 8679, 1996–31 I.R.B. 4

1A cumulative list of all Revenue Rulings, Revenue Procedures, Treasury Decisions, etc., published in Internal Revenue Bulletins 1996–1 through 1996–26 will be found in Internal Revenue Bulletin 1996–27, dated July 1, 1996.

Finding List of Current Action on Previously Published Items ¹

Bulletins 1996–27 through 1996–32

*Denotes entry since last publication

Revenue Procedures:

80–27 Modified by 96–40, 1996–32 I.R.B. 8

95–29 Superseded by 96–36, 1996–27 I.R.B. 11

95–29A Superseded by 96–36, 1996–27 I.R.B. 11

95–30 Superseded by 96–42, 1996–32 I.R.B. 4

1A cumulative finding list for previously published items mentioned in Internal Revenue Bulletins 1996–1 through 1996–26 will be found in Internal Revenue Bulletin 1996–27, dated July 1, 1996.