Part IV. Items of General Interest

Foundations Status of Certain Organizations

Announcement 96–120

Sachar-Saval Elijah Fund, Inc., Chestnut

Hill, MA Trinity Building Corporation, Charlotte,

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: ABT Health Care Research Foundation,

NC Youth Incorporated, Anderson, IN Youth Organized for Integrity and

Nuturing Citizenship Inc., Jackson, MS 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.

SUPPLEMENTARY INFORMATION:

Background

Section 1621(a) of the Small Business Job Protection Act of 1996, Public Law 104–188, 110 Stat. 1755 (August 20, 1996), amends the Internal Revenue Code (Code) by adding new part V (sections 860H–860L) to subchapter M of chapter 1. These provisions authorize a new statutory vehicle, called a Financial Asset Securitization Investment Trust (FASIT), that will facilitate the securitization of debt obligations, including credit card receivables and automobile loans. In general, a FASIT will use such obligations to issue new, debt-like securities, referred to as regular interests. No Federal income tax is imposed on a FASIT, even if the underlying arrangement is otherwise regarded for tax purposes as a corporation, trust, partnership, or segregated pool of assets.

A FASIT must have a single ownership interest, which has to be held entirely by a non-exempt domestic C corporation other than a corporation that qualifies as a RIC, REIT, REMIC, or subchapter T cooperative. Because a FASIT is not subject to income tax, the holder of the ownership interest generally includes in its taxable income all of the FASIT’s items of income, gain, deduction and loss. In addition, the holder recognizes gain (but not loss) when (1) the FASIT acquires property from the holder or an unrelated third party, or (2) the holder uses property to support a regular interest issued by the FASIT.

A FASIT may issue one or more classes of regular interests. Regular interests are treated as debt for all purposes of the Code. Ordinarily, a regular interest may be held by any person, unless the interest is a high-yield interest, in which case it may be held only by another FASIT or a corporation that is allowed to hold an ownership interest.

The FASIT provisions become effective on September 1, 1997. Special transitional rules apply to a securitization arrangement existing on August 31, 1997, that elects FASIT treatment (a pre- effective date FASIT).

In addition to the general authority under section 7805 to prescribe regulations, the Treasury and IRS have specific authority under section 860L(h) to issue regulations that carry out the purposes of the FASIT provisions, includ

Cambridge, MA Adoptive Families Together AFT,

Houston, TX Alternative Educational Environments,

Toledo, OH Amputee Peer Services Inc., N. Little

Rock, AR Anderson Urban League, Anderson, SC Apalachicola Bay Oyster Farmers

Association Inc., Apalachicola, FL Choice Alternative Care Service Inc.,

Greensboro, NC Committee to Save the RKO Keiths

Theatre of Flushing, Inc., Flushing, NY Freeport Saving Lives, Inc., Freeport, IL Georgia Association for Family Day

Financial Asset Securitization Investment Trusts (FASITs)

Announcement 96–121

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Solicitation for comments.

SUMMARY: The Treasury Department and the IRS are soliciting comments on issues to be considered in developing guidance under the newly enacted FASIT provisions of the Internal Revenue Code.

DATES: Comments are requested on or before December 31, 1996.

ADDRESSES: Send written comments to: Internal Revenue Service, Attn: CC:DOM:CORP:R (FASIT solicitation), room 5226, POB 7604, Ben Franklin Station, Washington, DC 20044. Alternatively, taxpayers may submit comments in writing, by hand delivery to CC:DOM:CORP:R (FASIT solicitation), Courier’s Desk, Internal Revenue Service, 1111 Constitution Ave., NW., Washington, D.C., or, electronically, via the IRS Internet site at: http:// www.irs.ustreas.gov/prod/tax_regs/ comments.html.

FOR FURTHER INFORMATION CONTACT: David L. Meyer at 202–622– 3960 (not a toll-free number).

Care-Educational Fund, Smyrna, GA Ichabod Ministries Incorporated,

Pittsfield, MA Japanese Cultural Exchange, Inc., New

York, NY Kentucky River Housing Corporation

Inc., Hazard, KY Midwest Coalition for Affordable

Housing, Clinton Township, MI New York State Shooting Sports

Foundation Inc., Huntington Sta, NY Ocean Park Historical Society Inc.,

Ocean Park, ME Putnam County Child Abuse Prevention

Council Inc., Greencastle, IN ing rules to prevent the abuse of the purposes of the FASIT provisions through transactions that are not primarily related to securitization of debt instruments by a FASIT.

Comments

To develop needed guidance timely, the Treasury Department and the IRS invite interested persons to submit comments (in the manner described under the ADDRESSES caption) on issues arising under the FASIT provisions. Treasury and the IRS encourage respondents to give particular attention to the following: rules that would allow more than one member of an affiliated group to hold ownership interests in the same FASIT; transitional rules for preeffective date FASITs; and any other rules that should be in place before September 1, 1997.

If a respondent is submitting written comments, a signed original and eight

(8) copies are requested. All comments will be available for public inspection and copying in their entirety.

JUDITH C. DUNN, Associate Chief Counsel (Domestic).

(Filed by the Office of the Federal Register on November 1, 1996, 8:45 a.m., and published in the issue of the Federal Register for November 4, 1996, 61 F.R. 56647)

Availability of Publication 938 on the Internet and IRS Electronic Bulletin Board (IRP-BBS) and Conversion to a Quarterly Publication

Announcement 96–122

The Service will not produce a printed version of future updates of Publication 938, Real Estate Mortgage Investment Conduits (REMICs) Reporting Information (And Other Collateralized Debt Obligations (CDOs)). The

1996 update and future quarterly updates will be available only on the Internet and the IRP-BBS. You can download the publication from the IRPBBS if you have a computer with a modem. Dial 1–304–264–7070 and follow the instructions. (This is not a toll-free call.) To download the publication from the Internet, connect to the IRS Home Page at:

http://www.irs.ustreas.gov The directory portion of Publication 938 will be updated each quarter. The text portion will be updated only once each year. The first update will contain a directory based on the Forms 8811 the Service receives from September 1 through December 31, 1996.

To order back issues (1991 through 1995) of the printed versions of Publication 938, call 1–800–TAX–FORM (1– 800–829–3676), or mail Form 6112, Prior Years’ Tax Forms Order. Be sure to specify which edition you want.

13 1996–47 I.R.B.