bulletin Internal Revenue

HIGHLIGHTS OF THIS ISSUE These synopses are intended only as aids to the reader in identifying the subject matter covered. They may not be relied upon as authoritative interpretations.

INCOME TAX

Rev. Rul. 98–44, page 4. Section 355. This ruling declares Rev. Rul. 70–225 obsolete because it is no longer determinative following modifications made by the Taxpayer Relief Act of 1997, as amended by the Tax Technical Corrections Act of 1998. Rev. Rul. 70–225 addresses a distribution of the stock of a newly formed controlled corporation followed by an acquisition of the stock of the controlled corporation. Rev. Rul. 70–225 obsoleted.

EXCISE TAX

Ct.D. 2064, page 4. The Harbor Maintenance Tax of section 4461 of the Code violates the Export Clause by imposing an ad valorem fee based on the value of the cargo and not on the use of federal harbor services. United States v. United States Shoe Corporation.

ADMINISTRATIVE

REG–106177–97, page 33. Proposed regulations under section 529 of the Code relate to Qualified State Tuition Programs (QSTPs). A public hearing will be held on January 6, 1999.

Finding Lists begin on page 49.

Department of the Treasury Internal Revenue Service

Bulletin No. 1998–37

September 14, 1998

Rev. Proc. 98–47, page 8. Business expenses; environmental remediation costs; election. Procedures are provided for taxpayers to make the election under section 198 of the Code to deduct any qualified environmental remediation expenditure.

Rev. Proc. 98–49, page 9. LIFO; price indexes; inventory price computation method. Guidance is provided to taxpayers using the dollarvalue last-in, first-out (LIFO) inventory method and the inventory price index computation (IPIC) method regarding the computation of a percent change for an index category that is affected by revisions to the CPI Detailed Report or the PPI Detailed Report.

Rev. Proc. 98–52, page 12. Electronic filing; magnetic media. Specifications are set forth for the magnetic or electronic filing of 1998 Forms 8027. The forms may be filed with the Service using ¹ ⁄2 inch magnetic tape; IBM 3480/3490 or AS400 compatible tape cartridges; or 5 ¹ ⁄4-, 3 ¹ ⁄2-inch diskettes and electronic filing through the Information Reporting Program Bulletin Board System (IRB-BBS). Rev. Proc. 92–81 superseded.

Notice 98–47, page 8. Timely filing or payment; private delivery services. An updated list of designated private delivery services is provided for purposes of section 7502 of the Code. The list remains unchanged from the lists published in Notice 97–50, 1997–37 I.R.B. 21 and Notice 97–26, 1997–1 I.R.B. 413.