Part I. Rulings and Decisions Under the Inernal Revenue Code of 1986

In accordance with directions in Section 15(a) of the Railroad Retirement Act of 1974, the Railroad Retirement Board has determined that for the quarter beginning April 1, 1997, 31.5 percent of the taxes collected under Sections 3211(b) and 3221(c) of the Railroad Retirement Tax Act shall be credited to the Railroad Retirement Account and 68.5 percent of the taxes collected under such Sections 3211(b) and 3221(c) plus 100 percent of the taxes collected under Section 3221(d) of the Railroad Retirement Tax Act shall be credited to the Railroad Retirement Supplemental Account.

Dated February 25, 1997. By Authority of the Board.

Beatrice Ezerski, Secretary to the Board.

(Filed by the Office of the Federal Register on March 5, 1997, 8:45 a.m., and published in the issue of the Federal Register for March 6, 1997, 62 F.R. 10297)

Section 4980C.—Requirements for Issuers of Qualified Long-term Care Insurance Contracts

Interim guidance is provided relating to the definition of a ‘‘chronically ill individual’’ for purposes of the term ‘‘qualified long-term care insurance contract’’ and to certain issues relating to consumer protection, rules for adjustments to nonforfeiture benefits, and grandfather rules for certain pre-1997 insurance contracts. See Notice 97–31, page 5.

Section 7121.—Closing Agreements

26 CFR 301.7121–1: Closing agreements.

What is the method by which a taxpayer requests early referral of one or more unagreed empolyment tax issues from the District to Appeals? See Announcement 97–52, page 22.

Section 7702B.—Treatment of Qualified Long-Term Care Insurance

Interim guidance is provided relating to the definition of a ‘‘chronically ill individual’’ and to certain issues relating to consumer protection, rules for adjustments to nonforfeiture benefits, and grandfather rules for certain pre-1997 insurance contracts. See Notice 97–31, page 5.

Section 101.—Certain Death Benefits

26 CFR 1.101–1: Exclusion from gross income of proceeds of life insurance contracts payable by reason of death.

Interim guidance is provided relating to the definition of a ‘‘chronically ill individual’’ for purposes of the treatment of certain accelerated death benefits. See Notice 97–31, page 5.

Section 104.—Compensation for Injuries or Sickness

26 CFR 1.104–1: Compensation for injuries or sickness.

Interim guidance is provided relating to the definition of a ‘‘chronically ill individual’’ for purposes of the definition of a ‘‘qualified longterm care insurance contract’’ under section 7702B. See Notice 97–31, page 5.

Section 105.—Amounts Received Under Accident and Health Plans

26 CFR 1.105–2: Amounts expended for medical care.

Interim guidance is provided relating to the definition of a ‘‘chronically ill individual’’ for purposes of the definition of a ‘‘qualified longterm care insurance contract’’ under section 7702B. See Notice 97–31, page 5.

Section 213.—Medical, Dental, Etc., Expenses

26 CFR 1.213–1: Medical, dental, etc., expenses.

Interim guidance is provided relating to the definition of a ‘‘chronically ill individual’’ for purposes of the definitions of ‘‘qualified long-term care services’’ and a ‘‘qualified long-term care insurance contract’’ under section 213(d). See Notice 97–31, page 5.

Section 446.—General Rule for Methods of Accounting

26 CFR 1.446–1: General rule for methods of accounting.

General procedures are provided under section 1.446–1(e) for obtaining the Commissioner’s consent to change a method of accounting. See Rev. Proc. 97–27, page 10.

Section 481.—Adjustments Required by Changes in Method of Accounting

26 CFR 1.481–1: Adjustments in general.

General procedures are provided under section 1.446–1(e) for obtaining the Commissioner’s con

sent to change a method of accounting. See Rev. Proc. 97–27, page 10.

26 CFR 1.481–4: Adjustments taken into account with consent.

General procedures are provided under section 1.446–1(e) for obtaining the Commissioner’s consent to change a method of accounting. See Rev. Proc. 97–27, page 10.

Section 807.—Rules for Certain Reserves

The notice sets forth the interim rules regarding the rate of interest to be used by insurance companies to compute under sections 807(c)(3) or 807(d)(2) reserves for modified guaranteed contracts as defined in section 817A, and the determination of policy interest under section 812 with regard to these contracts.

Section 812.—Definition of Company’s Share and Policyholders’ Share

The notice sets forth the interim rules regarding the rate of interest to be used by insurance companies to compute under sections 807(c)(3) or 807(d)(2) reserves for modified guaranteed contracts as defined in section 817A, and the determination of policy interest under section 812 with regard to these contracts.

Section 817A.—Special Rules for Modified Guaranteed Contracts

The notice sets forth the interim rules regarding the rate of interest to be used by insurance companies to compute under sections 807(c)(3) or 807(d)(2) reserves for modified guaranteed contracts as defined in section 817A, and the determination of policy interest under section 812 with regard to these contracts.

Section 3221.—Rate of Tax

Determination of Quarterly Rate of Excise Tax for Railroad Retirement Supplemental Annuity Program

In accordance with directions in Section 3221(c) of the Railroad Retirement Tax Act (16 U.S.C., Section 3221(c)), the Railroad Retirement Board has determined that the excise tax imposed by such Section 3221(c) on every employer, with respect to having individuals in his employ, for each work-hour for which compensation is paid by such employer for services rendered to him during the quarter beginning April 1, 1997, shall be at the rate of 35 cents.

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