SECTION 6. EXAMPLES

.01 Example 1. X is a calendar year corporation. The Service examined X ’s Form 1120, Corporation Income Tax Return, for the 1992 and 1994 taxable years. For the 1994 taxable year, the Service determined that X was entitled to a refund of $30,000. This Service-initiated refund was made on September 21, 1997, with interest computed from March 15, 1995, to July 29, 1997. For the 1992 taxable year, the Service determined that X underpaid its income tax by $80,000. The Service sent X a notice and demand for payment dated May 3, 1998, which X paid on May 12, 1998, with interest computed from March 15, 1993, to May 3, 1998. On July 22, 1998, both the 6-year period of limitation for claiming additional overpayment interest on X ’s 1997 refund and the 2-year period of limitation for claiming a refund of underpayment interest paid in 1998 were open. On December 27, 1999, X files a Form 843 requesting the net interest rate of zero under § 6621(d) for the overlap period from March 15, 1995, to July 29, 1997. The Service will refund underpayment interest to X in an amount equal to the difference between the underpayment interest paid

on $30,000 for the period from March 15, 1995, to July 29, 1997, and the overpayment interest computed and paid on $30,000 for that period.

.02 Example 2. The facts are the same as in Example 1, except that the Service sent X a notice and demand for payment dated May 3, 1996, which X paid on May 12, 1996, with interest computed from March 15, 1993, to May 3, 1996. On December 27, 1999, X files a Form 843 requesting the application of § 6621(d) for the overlap period from March 15, 1995, to May 3, 1996. On July 22, 1998, the 6year period of limitation for claiming additional overpayment interest on X ’s 1997 refund was open, but the 2-year period of limitation for claiming a refund of underpayment interest paid in 1996 was not open. Therefore, the net interest rate of zero under § 6621(d) does not apply to the overlap period and no adjustment will be made.

.03 Example 3. Y is a calendar year corporation. The Service examined Y ’s Form 1120, Corporation Income Tax Return, for the 1990 and 1992 taxable years. For the 1990 taxable year, the Service determined that Y was entitled to a refund of $40,000. The Service-initiated refund was made on November 21, 1993, with interest computed from March 15, 1991, to September 28, 1993. For the 1992 taxable year, the Service determined that Y underpaid its income tax by $60,000. The Service sent Y a notice and demand for payment dated October 3, 1996, which Y paid on October 12, 1996, with interest computed from March 15, 1993, to October 3, 1996. On July 22, 1998, both the 6year period of limitation for claiming additional overpayment interest on Y ’s 1993 refund and the 2-year period of limitation for claiming a refund of underpayment interest paid in 1996 were open. However, both of these periods of limitation will be closed before December 31, 1999. Y files a Form 843 after both these periods close and on or before December 31, 1999, requesting the net interest rate of zero under § 6621(d) for the overlap period from March 15, 1993, to September 28, 1993. The Service will refund underpayment interest to Y in an amount equal to the difference between the underpayment interest paid on $40,000 for the period from March 15, 1993, to September 28, 1993,

November 22, 1999 582 1999–47 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.

November 22, 1999 i 1999–47 I.R.B.

Treasury Decisions—Continued

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 8829, 1999–32 I.R.B. 235 8830, 1999–38 I.R.B. 430 8831, 1999–34 I.R.B. 264 8832, 1999–35 I.R.B. 315 8833, 1999–36 I.R.B. 338 8834, 1999–34 I.R.B. 251 8835, 1999–35 I.R.B. 317 8836, 1999–37 I.R.B. 411 8837, 1999–38 I.R.B. 426 8838, 1999–38 I.R.B. 424 8839, 1999–41 I.R.B. 498

Numerical Finding List ¹

Bulletins 1999–27 through 1999–46

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 99–71, 1999–31 I.R.B. 223 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 99–76, 1999–31 I.R.B. 223 99–77, 1999–32 I.R.B. 243 99–78, 1999–31 I.R.B. 229 99–79, 1999–31 I.R.B. 229 99–80, 1999–34 I.R.B. 310 99–81, 1999–32 I.R.B. 244 99–82, 1999–32 I.R.B. 244 99–83, 1999–32 I.R.B. 245 99–84, 1999–33 I.R.B. 248 99–85, 1999–33 I.R.B. 248 99–86, 1999–35 I.R.B. 332 99–87, 1999–35 I.R.B. 333 99–88, 1999–36 I.R.B. 407 99–89, 1999–36 I.R.B. 408 99–90, 1999–36 I.R.B. 409 99–91, 1999–37 I.R.B. 421 99–92, 1999–38 I.R.B. 433 99–93, 1999–36 I.R.B. 409 99–94, 1999–39 I.R.B. 437 99–95, 1999–42 I.R.B. 520 99–96, 1999–41 I.R.B. 504 99–97, 1999–41 I.R.B. 505 99–98, 1999–42 I.R.B. 520 99–99, 1999–42 I.R.B. 522 99–100, 1999–42 I.R.B. 522 99–101, 1999–43 I.R.B. 544 99–102, 1999–43 I.R.B. 545 99–103, 1999–43 I.R.B. 546 99–104, 1999–44 I.R.B. 555 99–105, 1999–44 I.R.B. 555 99–106, 1999–45 I.R.B. 561 99–107, 1999–45 I.R.B. 561 99–108, 1999–46 I.R.B. 573 99–109, 1999–46 I.R.B. 573 99–110, 1999–46 I.R.B. 574

Notices: 99–34, 1999–35 I.R.B. 323 99–35, 1999–28 I.R.B. 26 99–37, 1999–30 I.R.B. 124 99–38, 1999–31 I.R.B. 138 99–39, 1999–34 I.R.B. 313 99–40, 1999–35 I.R.B. 324 99–41, 1999–35 I.R.B. 325 99–42, 1999–35 I.R.B. 325 99–43, 1999–36 I.R.B. 344 99–44, 1999–35 I.R.B. 326 99–45, 1999–37 I.R.B. 415 99–46, 1999–37 I.R.B. 415 99–47, 1999–36 I.R.B. 391 99–48, 1999–38 I.R.B. 429

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

Notices—Continued 99–49, 1999–39 I.R.B. 436 99–50, 1999–40 I.R.B. 444 99–51, 1999–40 I.R.B. 447 99–52, 1999–43 I.R.B. 525 99–53, 1999–46 I.R.B. 565

Proposed Regulations:

REG–252487–96, 1999–34 I.R.B. 303 REG–101519–97, 1999–29 I.R.B. 114 REG–107069–97, 1999–36 I.R.B. 346 REG–121063–97, 1999–43 I.R.B. 540 REG–106010–98, 1999–40 I.R.B. 493 REG–106527–98, 1999–34 I.R.B. 304 REG–108287–98, 1999–28 I.R.B. 27 REG–113526–98, 1999–37 I.R.B. 417 REG–113909–98, 1999–30 I.R.B. 125 REG–116733–98, 1999–36 I.R.B. 392 REG–116991–98, 1999–32 I.R.B. 242 REG–121946–98, 1999–36 I.R.B. 403 REG–105237–99, 1999–35 I.R.B. 331 REG–105327–99, 1999–29 I.R.B. 117 REG–105565–99, 1999–37 I.R.B. 419 REG–116125–99, 1999–44 I.R.B. 552

Railroad Retirement Quarterly Rate: 1999–45 I.R.B. 560 1999–46 I.R.B. 563

Revenue Procedures:

99–28, 1999–29 I.R.B. 109 99–29, 1999–31 I.R.B. 138 99–30, 1999–31 I.R.B. 221 99–31, 1999–34 I.R.B. 280 99–32, 1999–34 I.R.B. 296 99–33, 1999–34 I.R.B. 301 99–34, 1999–40 I.R.B. 450 99–35, 1999–41 I.R.B. 501 99–36, 1999–42 I.R.B. 509 99–37, 1999–42 I.R.B. 517 99–38, 1999–43 I.R.B. 525 99–39, 1999–43 I.R.B. 532 99–40, 1999–46 I.R.B. 565 99–41, 1999–46 I.R.B. 566 99–42, 1999–46 I.R.B. 568

Revenue Rulings:

99–29, 1999–27 I.R.B. 3 99–30, 1999–28 I.R.B. 24 99–31, 1999–37 I.R.B. 410 99–32, 1999–31 I.R.B. 135 99–33, 1999–34 I.R.B. 251 99–34, 1999–33 I.R.B. 247 99–35, 1999–34 I.R.B. 278 99–36, 1999–35 I.R.B. 319 99–37, 1999–36 I.R.B. 336 99–38, 1999–36 I.R.B. 335 99–39, 1999–38 I.R.B. 424 99–40, 1999–40 I.R.B. 441 99–41, 1999–40 I.R.B. 439 99–42, 1999–41 I.R.B. 497 99–43, 1999–42 I.R.B. 506 99–44, 1999–44 I.R.B. 549 99–45, 1999–45 I.R.B. 558 99–46, 1999–45 I.R.B. 557

Treasury Decisions:

8822, 1999–27 I.R.B. 5

1999–47 I.R.B. ii November 22, 1999

Finding List of Current Action on Previously Published Items ¹

Bulletins 1999–27 through 1999–46

Announcements:

99–5 Modified by Ann. 99–106, 1999–45 I.R.B. 561

99–57 Modified by Ann. 99–104, 1999–44 I.R.B. 555

99–59 Corrected by Ann. 99–67, 1999–28 I.R.B. 31

Notices: 83–10 Modified by Notice 99–44, 1999–35 I.R.B. 326 96–64 Modified by Notice 99–40, 1999–35 I.R.B. 324

97–26 Modified by Notice 99–41, 1999–35 I.R.B. 325

97–50 Modified and superseded by Notice 99–41, 1999–35 I.R.B. 325

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

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

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

98–47 Modified and superseded by Notice 99–41, 1999–35 I.R.B. 325

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

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

Proposed Regulations:

REG–208156–91 Corrected by Ann. 99–65, 1999–27 I.R.B. 9

Revenue Procedures: 65–17 Superseded by Rev. Proc. 99–32, 1999–34 I.R.B. 296

65–31 Superseded by Rev. Proc. 99–32, 1999–34 I.R.B. 296

70–23 Superseded by Rev. Proc. 99–32, 1999–34 I.R.B. 296

1 A cumulative finding list of actions published in Internal Revenue Bulletins 1999–1 through 1999–26 is in Internal Revenue Bulletin 1999–27, dated July 6, 1999.

Revenue Procedures—Continued

71–35 Superseded by Rev. Proc. 99–32, 1999–34 I.R.B. 296

72–22 Superseded by Rev. Proc. 99–32, 1999–34 I.R.B. 296

72–46 Superseded by Rev. Proc. 99–32, 1999–34 I.R.B. 296

72–48 Superseded by Rev. Proc. 99–32, 1999–34 I.R.B. 296

72–53 Superseded by Rev. Proc. 99–32, 1999–34 I.R.B. 296

89–48 Obsoleted (after Jan. 31, 2000) by Notice 99–42, 1999–35 I.R.B. 325

89–49 Obsoleted (after Jan. 31, 2000) by Notice 99–42, 1999–35 I.R.B. 325

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

96–17 Modified by Rev. Proc. 99–39, 1999–43 I.R.B. 532

96–47 Amplified and superseded by Rev. Proc. 99–40, 1999–46 I.R.B. 565

97–19 Modified by Notice 99–41, 1999–35 I.R.B. 325

97–47 Amplified, clarified, modified, and superseded by Rev. Proc. 99–39, 1999–43 I.R.B. 532

98–22 Clarified and supplemented by Rev. Proc. 99–31, 1999–34 I.R.B. 280

98–35 Superseded by Rev. Proc. 99–29, 1999–31 I.R.B. 138

98–37 Superseded by Rev. Proc. 99–34, 1999–40 I.R.B. 450

98–63 Modified by Ann. 99–7 and superseded by Rev. Proc. 99–38, 1999–43 I.R.B. 525

Revenue Rulings:

77–475 Modified and superseded by Rev. Rul. 99–40, 1999–40 I.R.B. 441

82–80 Superseded by Rev. Proc. 99–32, 1999–34 I.R.B. 296

84–58 Modified and superseded by Rev. Rul. 99–40, 1999–40 I.R.B. 441

Revenue Rulings—Continued

88–98 Modified and superseded by Rev. Rul. 99–40, 1999–40 I.R.B. 441

99–23 Corrected by Ann. 99–89, 1999–36 I.R.B. 408

Treasury Decisions:

8476 Corrected by Ann. 99–74, 1999–30 I.R.B. 133

8742 Corrected by Ann. 99–73, 1999–30 I.R.B. 133

8793 Corrected by Ann. 99–75, 1999–30 I.R.B. 134

8805 Corrected by Ann. 99–66, 1999–27 I.R.B. 9

8806 Corrected by Ann. 99–84, 1999–33 I.R.B. 248

8819 Corrected by Ann. 99–47, 1999–28 I.R.B. 29

8823 Corrected by Ann. 99–86, 1999–35 I.R.B. 332

8825 Corrected by Ann. 99–100, 1999–42 I.R.B. 522

November 22, 1999 iii 1999–47 I.R.B.