SECTION 4. EFFECTIVE DATE

This revenue procedure is effective for taxable years beginning after December 31, 1997.

DRAFTING INFORMATION

The principal author of this revenue procedure is John W. Rogers III of the Office of the Associate Chief Counsel (International). For further information regarding this revenue procedure, please contact Mr. Rogers at (202) 622-3870 (not a tollfree call), or write to the Internal Revenue Service, Office of the Associate Chief Counsel (International), 1111 Constitution Avenue, NW, Washington, DC 20224, Attention: CC:INTL:Br5, Room 4554.

August 2, 1999 222 1999–31 I.R.B.

Revenue rulings and revenue procedures (hereinafter referred to as “rulings”) that have an effect on previous rulings use the following defined terms to de- scribe the effect:

Amplified describes a situation where no change is being made in a prior published position, but the prior position is being extended to apply to a variation of the fact situation set forth therein. Thus, if an earlier ruling held that a principle applied to A, and the new ruling holds that the same principle also applies to B, the earlier ruling is amplified. (Compare with modified, below).

Clarified is used in those instances where the language in a prior ruling is being made clear because the language has caused, or may cause, some confusion. It is not used where a position in a prior ruling is being changed.

Distinguished describes a situation where a ruling mentions a previously published ruling and points out an essential difference between them.

Modified is used where the substance of a previously published position is being changed. Thus, if a prior ruling held that a principle applied to A but not to B, and the new ruling holds that it ap

The following abbreviations in current use and for- merly used will appear in material published in the Bulletin.

A —Individual. Acq. —Acquiescence. B —Individual. BE —Beneficiary. BK —Bank. B.T.A. —Board of Tax Appeals. C. —Individual. C.B. —Cumulative Bulletin. CFR —Code of Federal Regulations. CI —City. COOP —Cooperative. Ct.D. —Court Decision. CY —County. D —Decedent. DC —Dummy Corporation. DE —Donee. Del. Order —Delegation Order. DISC —Domestic International Sales Corporation. DR —Donor. E —Estate. EE —Employee.

plies to both A and B, the prior ruling is modified because it corrects a published position. (Compare with amplified and clarified, above).

Obsoleted describes a previously published ruling that is not considered determinative with respect to future transactions. This term is most commonly used in a ruling that lists previously published rulings that are obsoleted because of changes in law or regulations. A ruling may also be obsoleted because the substance has been included in regulations subsequently adopted.

Revoked describes situations where the position in the previously published ruling is not correct and the correct position is being stated in the new ruling.

Superseded describes a situation where the new ruling does nothing more than restate the substance and situation of a previously published ruling (or rulings). Thus, the term is used to republish under the 1986 Code and regulations the same position published under the 1939 Code and regulations. The term is also used when it is desired to republish in a single ruling a series of situations, names, etc., that were previously published over a period of time in separate rulings. If the

E.O. —Executive Order. ER —Employer. ERISA —Employee Retirement Income Security Act. EX —Executor. F —Fiduciary. FC —Foreign Country. FICA —Federal Insurance Contribution Act. FISC —Foreign International Sales Company. FPH —Foreign Personal Holding Company. F.R. —Federal Register. FUTA —Federal Unemployment Tax Act. FX —Foreign Corporation. G.C.M. —Chief Counsel’s Memorandum. GE —Grantee. GP —General Partner. GR —Grantor. IC —Insurance Company. I.R.B. —Internal Revenue Bulletin. LE —Lessee. LP —Limited Partner. LR —Lessor. M —Minor. Nonacq. —Nonacquiescence. O —Organization. P —Parent Corporation.

new ruling does more than restate the substance of a prior ruling, a combination of terms is used. For example, modified and superseded describes a situation where the substance of a previously published ruling is being changed in part and is continued without change in part and it is desired to restate the valid portion of the previously published ruling in a new ruling that is self contained. In this case the previously published ruling is first modified and then, as modified, is superseded.

Supplemented is used in situations in which a list, such as a list of the names of countries, is published in a ruling and that list is expanded by adding further names in subsequent rulings. After the original ruling has been supplemented several times, a new ruling may be published that includes the list in the original ruling and the additions, and supersedes all prior rulings in the series.

Suspended is used in rare situations to show that the previous published rulings will not be applied pending some future action such as the issuance of new or amended regulations, the outcome of cases in litigation, or the outcome of a Service study.

PHC —Personal Holding Company. PO —Possession of the U.S. PR —Partner. PRS —Partnership. PTE —Prohibited Transaction Exemption. Pub. L. —Public Law. REIT —Real Estate Investment Trust. Rev. Proc. —Revenue Procedure. Rev. Rul. —Revenue Ruling. S —Subsidiary. S.P.R. —Statements of Procedral Rules. Stat. —Statutes at Large. T —Target Corporation. T.C. —Tax Court. T.D. —Treasury Decision. TFE —Transferee. TFR —Transferor. T.I.R. —Technical Information Release. TP —Taxpayer. TR —Trust. TT —Trustee. U.S.C. —United States Code. X —Corporation. Y —Corporation. Z —Corporation.

August 2, 1999 i 1999–31 I.R.B.

Numerical Finding List ¹

Bulletins 1999–27 through 1999–30

Announcements: 99–47, 1999–28 I.R.B. 29 99–64, 1999–27 I.R.B. 7 99–65, 1999–27 I.R.B. 9 99–66, 1999–27 I.R.B. 9 99–67, 1999–28 I.R.B. 31 99–68, 1999–28 I.R.B. 31 99–69, 1999–28 I.R.B. 33 99–70, 1999–29 I.R.B. 118 99–72, 1999–30 I.R.B. 132 99–73, 1999–30 I.R.B. 133 99–74, 1999–30 I.R.B. 133 99–75, 1999–30 I.R.B. 134 Notices: 99–35, 1999–28 I.R.B. 26 99–37, 1999–30 I.R.B. 124

Proposed Regulations:

REG–101519–97, 1999–29 I.R.B. 114 REG–108287–98, 1999–28 I.R.B. 27 REG–105327–99, 1999–29 I.R.B. 117 REG–113909–98, 1999–30 I.R.B. 125

Revenue Procedures:

99–28, 1999–29 I.R.B. 109

Revenue Rulings:

99–29, 1999–27 I.R.B. 3 99–30, 1999–28 I.R.B. 24

Treasury Decisions:

8822, 1999–27 I.R.B. 5 8823, 1999–29 I.R.B. 34 8824, 1999–29 I.R.B. 62 8825, 1999–28 I.R.B. 19 8826, 1999–29 I.R.B. 107 8827, 1999–30 I.R.B. 120 8828, 1999–30 I.R.B. 120

1 A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 1999–1 through 1999–26 will be found in Internal Revenue Bulletin 1999–27, dated July 6, 1999.

1999–31 I.R.B. ii August 2, 1999

Finding List of Current Action on Previously Published Items ¹

Bulletins 1999–27 through 1999–30

Notices:

97–73 Modified by 99–37, 1999–30 I.R.B. 124

98–7 Modified by 99–37, 1999–30 I.R.B. 124

98–46 Modified by 99–37, 1999–30 I.R.B. 124

98–54 Modified by 99–37, 1999–30 I.R.B. 124

98–59 Modified by 99–37, 1999–30 I.R.B. 124

Revenue Procedures:

96–9 Superseded by Rev. Proc. 99–28, 1999–29 I.R.B. 109 Rev. Proc. 99–23, 1999–16 I.R.B. 5

98–52 Modified by Rev. Proc. 99–23, 1999–16 I.R.B. 5

98–61 Modified by 99–29, 1999–21 I.R.B. 8

99–5 Modified by Rev. Proc. 99–23, 1999–16 I.R.B. 5

Revenue Procedures:

78–10 Obsoleted by 99–12, 1999–3 I.R.B. 13

89–9 Modified by 99–23, 1999–16 I.R.B. 5

89–13 Modified by 99–23, 1999–16 I.R.B. 5

93–39, section 13 Modified by 99–23, 1999–16 I.R.B. 5

94–56 Superseded by 99–9, 1999–2 I.R.B. 17

95–12 Modified by 99–23, 1999–16 I.R.B. 5

97–23 Superseded by 99–3, 1999–1 I.R.B. 103

97–41 Modified by 99–23, 1999–16 I.R.B. 5

1 A cumulative finding list for previously published items mentioned in Internal Revenue Bulletins 1999–1 through 1999–26 will be found in Internal Revenue Bulletin 1999–27, dated July 6, 1999.

98–1 Superseded by 99–1, 1999–1 I.R.B. 6

98–2 Superseded by 99–2, 1999–1 I.R.B. 73

98–3 Superseded by 99–3, 1999–1 I.R.B. 103

Revenue Procedures—Continued

98–4 Superseded by 99–4, 1999–1 I.R.B. 115

98–5 Superseded by 99–5, 1999–1 I.R.B. 158

98–6 Superseded by 99–6, 1999–1 I.R.B. 187

98–7 Superseded by 99–7, 1999–1 I.R.B. 226

98–8 Superseded by 99–8, 1999–1 I.R.B. 229

98–14 Modified by 99–23, 1999–16 I.R.B. 5

98–22 Modified and amplified by 99–13, 1999–5 I.R.B. 52

98–28 Obsoleted by (except as provided in section 5.02 of) 99–22, 1999–15 I.R.B. 5

98–33 Superseded by 99–24, 1999–21 I.R.B. 8

98–36 Superseded by 99–25, 1999–21 I.R.B. 24

98–56 Superseded by 99–3, 1999–1 I.R.B. 103

98–63 Modified by announcement 99–7, 1999–2 I.R.B. 45

Revenue Rulings:

79–162 Revoked by 99–28, 1999–25 I.R.B. 6

92–19 Supplemented in part by 99–10, 1999–10 I.R.B. 10

August 2, 1999 iii 1999–31 I.R.B.

Internal Revenue Bulletins 1999–27 Through 1999–30

For the index of items published during 1998, see I.R.B. 1999–1, dated January 4, 1999.

The abbreviation and number in parenthesis following the index entry refer to the specific item; numbers in roman and italic type following the parenthesis refer to the Internal Revenue Bulletin in which the item may be found and the page number on which it appears.

Key to Abbreviations: Ann Announcement RR Revenue Ruling RP Revenue Procedure TD Treasury Decision CD Court Decision PL Public Law EO Executive Order DO Delegation Order TDO Treasury Department Order TC Tax Convention SPR Statement of Procedural

Rules PTE Prohibited Transaction

Exemption

mainder or reversionary interests (T.D. 8819) 20, 5; correction (Ann. 47) 28 , 29 26 CFR 20.6302–1, added; electronic funds transfers of federal deposits (T.D. 8828) 30, 120

Regulations:

26 CFR 40.6302(a)–1, added; electronic funds transfers of federal deposits (T.D. 8828) 30, 120

List of organizations classified as private

foundations (Ann. 64) 27, 7; (Ann. 68) 28, 31; (Ann. 70) 29, 118 Regulations:

26 CFR 301.6104(d)–2 through –5, added; public disclosure of material relating to tax-exempt organizations (T.D. 8818) 17, 3 Revocations (Ann. 72) 30, 132

Interest:

Investment:

Federal short-term, mid-term, and

long-term rates for July 1999 (RR 29) 27 , 3 Inventory:

LIFO:

Price indexes; department stores for

May 1999 (RR 30) 28 , 24 Page numbers change in Internal Revenue

Bulletins (Ann. 69) 28, 33 Proposed regulations:

Proposed regulations:

Electronic filing; magnetic media:

Information reporting seminars for

26 CFR 25.2702–3, amended; definition of a qualified interest in a grantor retained annuity trust and a grantor retained unitrust (REG– 108287–98) 28, 27 Regulations:

1999 (Ann. 59) 24, 52; correction (Ann. 67) 28, 31 Regulations:

26 CFR 1.446–1, amended; 1.451–3, removed; 1.451–5, amended; 1.460–0, amended; 1.460–1 through 1.460–3, revised; 1.460–4, amended; 1.460–5, revised; 1.460–6, amended; 1.460–7 and 1.460–8, removed; accounting for long-term contracts (REG–208156–91) 22, 11; correction (Ann. 65) 27, 9 26 CFR 1.460–4, removed; 1.460–1, –2, –3, –4, –5, added; 1.446–1, amended; 1.451–3, removed; 1.451–5, amended; 1.460–0, amended; 1.460–1 through 1.460–3, revised; 1.460–4, amended; 1.460–5, revised; 1.460–6, amended; 1.460–7, –8, removed; accounting for long-term contracts (REG–208156–91) 22, 11 ; correction (Ann. 65) 27, 9 26 CFR 1.904–5(k)(1), revised; 1.954– 0, –1, amended; 1.954–2(a)(5) and (a)(6), added; 1.954–9, added; under subpart F: withdrawal of guidance relating to partnerships and branches; new guidance relating to certain hybrid transactions (REG– 113909–98) 30, 125 26 CFR 1.1397E–1, amended; qualified zone academy bonds; obligations of states and political subdivisions (REG–105327–99) 29, 117 26 CFR 301.6323(j)–1, added; withdrawal of notice of federal tax lien in certain circumstances (REG– 101519–97) 29, 114 Qualified zone academy bond credit rate

(Notice 35) 28, 26 Regulations:

31.6302– 1, amended; electronic funds transfers of federal deposits (T.D. 8828) 30, 120 26 CFR 31.6302–1(f)(4), revised; 31.6302–1T, removed; federal employment tax deposits – de minimis rule (T.D. 8822) 27, 5

26 CFR 25.2512–0, revised; 25.2512– 5, –5A, amended; 25.2512–5T, added; 25.7520–1, –3, amended; 25.7520–1T, added; valuation of annuities, interests for life or term of years, and remainder or reversionary interests (T.D. 8819) 20, 5; correction (Ann. 47) 28 , 29 26 CFR 25.6302–1, added; electronic funds transfers of federal deposits (T.D. 8828) 30, 120

Regulations:

26 CFR 20.2031–0, revised; 20.2031–7, –7A, amended; 20.2031– 7T, added; 20.2055–2, amended; 20.7520–1, amended; 20.7520–1T, added; valuation of annuities, interests for life or term of years, and re

29, 109

Credits:

Qualified student loan interest; infor

26 CFR 1.148–11, amended; arbitrage restrictions on tax-exempt bonds (T.D. 8476, 1993–2 C.B. 13); correction (Ann. 74) 30, 133 2 6 C F R 1 . 1 7 0 A – 6, a m e n d e d ; 1.170A–12T, added; 1.642(c)–6,

mation reporting (Notice 37) 30 , 124 Early referral of issues to Appeals (RP 28)

1999–31 I.R.B. iv August 2, 1999

amended; 1.642(c)–6T, added; 1.642(c)–6A, amended; 1.664–4, –4A, amended; 1.7520–1, amended; 1.7520–1T, added; valuation of annuities, interests for life or terms of years, and remainder or reversionary interests (T.D. 8819) 20, 5 ; correction (Ann. 47) 28, 29 26 CFR 1.382–5T redesignated as 1.382–5, amended; 1.382–8T redesignated as 1.382–8, amended; 1.382–1, –2, –2T, –4, amended; application of section 382 in short taxable years and with respect to controlled groups (T.D. 8825) 28, 19 26 CFR 1.861–8, amended; 1.861–8T, amended; 1.865–1T, added; 1.865–2, added; 1.865–2T, added; 1.904–0, amended; 1.904–4, amended; allocation of loss with respect to stocks and other personal property (T.D. 8805)

5, 14; correction (Ann. 66) 27, 9 26 CFR 1.904–5, amended; 1.904–5T, removed; 1.954–1, amended; 1.954–1T, –2T, removed; 1.954–9T, removed; 301.7701–3, amended; 301.7701–3T, removed; removal of regulations providing guidance under subpart F relating to partnerships and branches (T.D. 8827) 30, 120 26 CFR 1.1397E–1T, amended; qualified zone academy bonds; obligations of states and political subdivisions (T.D. 8826) 29, 107 26 CFR 1.1502–15T, -21T, –22T, –23T, removed; 1.1502–1, amended; 1.1502–15, –21, -22, –23, added; consolidated returns–limitations on the use of certain losses and deductions (T.D. 8823) 29, 34 26 CFR 1.1502–90T redesignated as 1.1502–90A; 1.1502–91T through

–99T, removed; 1.1502–90 through –99, added; 1.1502–91A through –99A, added; 1.1502–20, amended; limitations on net operating loss carryforwards and certain built-in losses and credits following an ownership change of a consolidated group (T.D 8824) 29, 62 26 CFR 1.6302–4, revised; electronic funds transfers of federal deposits (T.D. 8828) 30, 120 26 CFR 301.6311–2T, amended; payment by credit card and debit card; (T.D. 8793) 7, 15 ; correction (Ann. 75) 30, 134 26 CFR 602.101, amended; requirements respecting the adoption or change of accounting method; extension of time to make elections; (T.D. 8742, 1998–5 I.R.B. 4); correction (Ann. 73) 30, 133

August 2, 1999 v 1999–31 I.R.B.