SECTION 1. PURPOSE

.01 This revenue procedure updates Rev. Proc. 97–56, 1997–2 C.B. 582, and identifies circumstances under which the disclosure on a taxpayer’s return of a position with respect to an item is adequate for the purpose of reducing the understatement of income tax under § 6662(d) of the Internal Revenue Code (relating to the substantial understatement aspect of the accuracy-related penalty), and for the purpose of avoiding the preparer penalty under § 6694(a) (relating to understatements due to unrealistic positions). This revenue procedure does not apply with respect to any other penalty provision (including the negligence or disregard provisions of the § 6662 accuracy-related penalty).

.02 This revenue procedure applies to any return filed on 1998 tax forms for a taxable year beginning in 1998, and to any return filed on 1998 tax forms in 1999 for short taxable years beginning in 1999.

.24 Attorney Fee Awards. For calendar year 1999, for costs incurred on or before January 18, 1999, the attorney fee award limitation under § 7430(c)(1)(B)(iii) is $120 per hour. For costs incurred after January 18, 1999, the attorney fee award limitation under § 7430(c)(1)(B)(iii) is $130 per hour.

.25 Periodic Payments Received under Qualified Long-Term Care Insurance Contracts or under Certain Life Insur- ance Contracts. For calendar year 1999, the stated dollar amount of the per diem limitation under § 7702B(d)(4), regarding periodic payments received under a qualified long-term care insurance contract or periodic payments received under a life insurance contract that are treated as paid by reason of the death of a chronically ill individual, is $190.