SECTION 3. PROCEDURES FOR

ESTABLISHING A TREASURY DIRECT ACCOUNT

The procedures for establishing a Treasury Direct Account with the Service are as follows:

.01 Taxpayers must complete the Form 8693, Low Income Housing Tax Credit Disposition Bond, (see, however, any further revisions to the Form 8693 and its instructions for any changes in reporting) to determine the required amount of Treasury securities to be pledged as follows:

(1) write the words “TREASURY DIRECT ACCOUNT” across the top of Form 8693;

(2) complete Part I of the Form 8693 which includes lines 1 through 5 (substi

tuting the word “security” wherever the word “bond” appears in line 4), skip line 6, and indicate on line 7a the name and address of the taxpayer;

(3) sign the perjury statement under Part II;

(4) complete Part III, if applicable; (5) compute the bond amount by completing the worksheet in the instructions; and

(6) submit the completed Form 8693 to:

Internal Revenue Service Low-Income Housing Tax Credit Examination Group Room 3426 P.O. Box 12040 Philadelphia, PA 19105 .02 Upon receipt of the Form 8693, the Service will verify that the appropriate dollar amount of Treasury securities has been pledged and will provide the taxpayer with a Treasury Direct collateral customer package and approval memorandum authorizing the establishment of the Treasury Direct Account. The taxpayer must then:

(1) complete the Bureau of Public Debt New Account Request Form (PD 5182) including the following information:

(a) taxpayer identification number (TIN);

(b) taxpayer mailing address; (c) telephone number; and (d) the direct deposit information for the taxpayer’s bank account to which payments will be credited and purchases debited.

(2) submit the PD 5182 with the Service approval memorandum to:

Bureau of the Public Debt IRS Collateral - DCS (PD-DCS) 200 Third Street P.O. Box 428 Parkersburg, WV 26106 .03 Upon receipt of PD 5182, the Bureau of the Public Debt (PD-DCS) will establish a zero par collateral account (that is, an account without a balance). Taxpayers will then have 60 days to fund the account through original issue or secondary market purchases of eligible Treasury securities, which are: 26-week Treasury bills, $1,000 minimum, $1,000 multiples; and 52-week Treasury bills, $1,000 minimum, $1,000 multiples.

1999–2 I.R.B 15 January 11, 1999

(2) PD-DCS reports to the Service all Form 1099 information concerning the accounts.

(3) All refund payments are credited electronically to the bank account of record on the previously established Treasury Direct Account. A refund payment on a Treasury bill is an amount equal to the difference between the face value and the price paid for the bill when purchased at original issue.

(4) Taxpayers are subject to annual maintenance or other fees applicable generally to investors holding Treasury securities in Treasury Direct. Refer to annual Federal Register notices for the schedule of maintenance fees.

.05 Taxpayers are not able, without written authorization from the Service, to transfer securities or initiate other changes to the collateral account. However, taxpayers may communicate directly with PD-DCS with any change in bank account information.

.06 At the end of the required posting period, the taxpayer must complete a Security Transfer Request Form (PD 5179), and forward the Request Form PD 5179 to the Service at the address noted in Section 3.01(6) of this revenue procedure. The

Service will review the taxpayer’s request and notify PD-DCS to return the posted securities. PD-DCS will not process any transfer request from the taxpayer unless it has been reviewed by the Service.

.07 The taxpayer has two options in receiving back the securities from the Treasury Direct Account. The taxpayer may:

(1) establish a new Treasury Direct Account using the Public Debt New Account Request Form or designate an existing Treasury Direct Account in the taxpayer’s name and complete the Security Transfer Request Form (PD 5179) to transfer the securities into the new or existing Treasury Direct Account; or

(2) complete the Security Transfer and Sale Request Form (PD-5179-1) to transfer the securities to the commercial market’s National Book-Entry System (NBES). The securities are transferred from the Treasury Direct system into the Federal Reserve’s Bank of Chicago’s account in NBES to be sold on the secondary market.

.08 Questions regarding the computation of the required amount of collateral can be directed to:

Internal Revenue Service

Low Income Housing Tax Credit

Examination Group Room 3426 P.O. Box 12040 Philadelphia, PA 19105 Phone Number: (215) 861-1212 (Ext. 144) .09 Administrative questions concerning the establishment of the Treasury Direct Account should be directed to:

Bureau of the Public Debt IRS Collateral-DCS 200 Third Street P.O. Box 428 Parkersburg, WV 26106 Phone Number: (304) 480-6158