SECTION 1. PURPOSE AND

NATURE OF CHANGES

.01 The purpose of this revenue procedure is to update Rev. Proc. 96–3, 1996–1 C.B. 456, as amplified and modified by subsequent revenue procedures, by providing a revised list of those areas of the Internal Revenue Code under the jurisdiction of the Associate Chief Counsel (Domestic) and the Associate Chief Counsel (Employee Benefits and Exempt Organizations) relating to issues on which the Internal Revenue Service will not issue advance letter rulings or determination letters. For a list of areas under the jurisdiction of the Associate Chief Counsel (International) relating to international issues on which the Service will not issue advance letter rulings or determination letters, see Rev. Proc. 97–7, this Bulletin. For a list of areas under the jurisdiction of the Assistant Commissioner (Employee Plans and Exempt Organizations) relating to issues, plans or plan amendments on which the Service will not issue letter rulings and determination letters, see, respectively, section 8 of Rev. Proc. 97–4, this Bulletin, and section 3.02 of Rev. Proc. 97–6, this Bulletin.

.02 Changes (1) Old section 3.01(15), dealing with § 274, has been updated to reference Rev. Procs. 96–28, 1996–1 C.B. 686, and 96–64, 1996–53 I.R.B. 52.

(2) Old section 3.01(23), dealing with corporate business purpose under § 355(b), has been deleted. See Rev. Proc. 96–30, 1996–1 C.B. 696.

(3) Old sections 3.01(22) and 3.01(25), dealing with §§ 351 and 368(a)(1)(B), now include a sentence emphasizing that these no-rule provisions apply only to transactions involving the formation of a holding company.

(4) New section 3.01(23), dealing with § 368, has been moved to section 3 from the section 5 under study area to reflect the Service’s unwillingness to rule on certain combining transactions. See Rev. Proc. 96–22, 1996–1 C.B. 662.

(5) Old sections 3.01(45) and 4.01(45), (46), and (47), dealing with § 7701, have been deleted to reflect the new provisions under § 301.7701–1, –2, and –3 of the regulations dealing with partnerships. See T.D. 8697.

(6) New section 4.01(32), dealing with § 355, has been added to reflect

the Service’s unwillingness, in general, to rule where the gross assets of the active businesses constitute less than 5 percent of the fair market value of the corporation’s total gross assets. See Rev. Proc. 96–43, 1996–35 I.R.B. 6.

(7) Old section 5.05, dealing with § 104, has been deleted from the under study no-rule area to indicate that the Service will rule as to whether certain amounts received are excludable from gross income under § 104(a)(2) in situations affected by Commissioner v. Schleier, 515 U.S. (1995), 115 S.Ct. 2159. See Rev. Rul. 96–65, 1996–53 I.R.B. 5. (8) New section 5.05, dealing with §§ 101, 761, and 7701, has been added to the under study no-rule area to indicate that, in certain situations where a life insurance policy is transferred to an unincorporated organization, the Service will not issue rulings: (i) as to whether the organization will be treated as a partnership under §§ 761 and 7701; and (ii) as to whether the transfer will be exempt from the transfer-for-value rules of § 101. See Rev. Proc. 96–12, 1996–1 C.B. 616.

(9) New section 5.06, dealing with § 101, has been added to the under study no-rule area to indicate that the Service will not issue rulings as to whether there has been a transfer for value for purposes of § 101(a) in certain situations involving a grantor and a trust. This no-rule area deals with certain aspects of transactions that fall under the existing no-rule area under section 5.21, dealing with § 671, and is added to advise taxpayers of the Service’s long standing ruling practice that this § 671 no-rule area cannot be avoided by rephrasing the question so as to present it under § 101.

(10) New Section 5.09, dealing with § 115, has been added to the under study no-rule area to indicate that the Service will not issue rulings as to certain questions regarding plans or arrangements created by state statute for paying post-secondary education costs. See Rev. Proc. 96–34, 1996–1 C.B. 721.

(11) New section 5.17, dealing with § 355, has been added to the under study no-rule area to indicate that the Service will not issue rulings where there have been negotiations, agreements or arrangements with respect to transactions or events which, if treated as consummated before the distribution, would result in the distribution of stock or securities of a corporation which is not controlled by the distributing corpo

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tions and problems as well as general areas. Section 5 lists specific areas for which the Service is temporarily not issuing advance rulings and determinations because those matters are under extensive study. Finally, section 6 of this revenue procedure lists specific areas where the Service will not ordinarily issue advance rulings because the Service has provided automatic approval procedures for these matters.

See Rev. Proc. 97–1, page 11, this Bulletin, particularly section 7 captioned ‘‘Under What Circumstances Does the Service Have Discretion to Issue Letter Rulings and Determination Letters?’’ for general instructions and other situations in which the Service will not or ordinarily will not issue letter rulings or determination letters.

With respect to the items listed, revenue rulings or revenue procedures may be published in the Internal Revenue Bulletin from time to time to provide general guidelines regarding the position of the Service.

Additions or deletions to this revenue procedure as well as restatements of items listed will be made by modification of this revenue procedure. Changes will be published as they occur throughout the year and will be incorporated annually in a new revenue procedure published as the third revenue procedure of the year. These lists should not be considered all-inclusive. Decisions not to rule on individual cases (as contrasted with those that present significant pattern issues) are not reported in this revenue procedure and will not be added to subsequent revisions.

.02 Scope of Application This revenue procedure does not preclude the submission of requests for technical advice to the national office from the Office of a District Director of the Internal Revenue or a Chief, Appeals Office.