SECTION 1. PURPOSE

This notice provides guidance regarding the election under § 1161 of the Taxpayer Relief Act of 1997, Pub. L. No. 105–34, 111 Stat. 788 (1997) (Taxpayer Relief Act). Section 1161(a) provides that to the extent prescribed in regulations by the Secretary of the Treasury or his delegate, a trust that was in existence on August 20, 1996 (other than a trust treated as owned by the grantor under subpart E of part I of subchapter J of chapter 1 of the Internal Revenue Code of 1986), and that was treated as a United States person on August 19, 1996, may elect to continue to be treated as a United States person notwithstanding § 7701(a)(30)(E). The Internal Revenue Service and the Department of the Treasury will incorporate the guidance contained in this notice in regulations. Accordingly, trusts should follow the procedures set forth in this notice.