Part I. Rulings — Internal Revenue Bulletin 2000-3

The following Department Store Inventory Price Indexes for November 1999 were issued by the Bureau of Labor Statistics. The indexes are accepted by the Internal Revenue Service, under section 1.472–1(k) of the Income Tax Regulations and Rev. Proc. 86–46, 1986–2 C.B. 739, for appropriate application to inventories of department stores employing the retail inventory and last-in, first-out inventory methods for tax years ended on, or with reference to, November 30, 1999.

The Department Store Inventory Price Indexes are prepared on a national basis and include (a) 23 major groups of departments, (b) three special combinations of the major groups - soft goods, durable goods, and miscellaneous goods, and (c) a store total, which covers all departments, including some not listed separately, except for the following: candy, food, liquor, tobacco, and contract departments.

Section 167.—Depreciation

26 CFR 1.167(e)-1: Change in method.

Is a change in the method of computing depreciation for property subject to section 168 of the Code (MACRS property) that is acquired in a section 1031 like-kind exchange or section 1033 involuntary conversion a change in method of accounting? See Notice 2000–4, page 313.

Section 442.—Change of Annual Accounting Period

26 CFR 1.442–1: Change of annual accounting period.

What procedures apply for certain corporations to obtain automatic approval to change their annual accounting periods under section 442 of the Code? See Rev. Proc. 2000–11, page 309.

Section 446.—General Rule for Methods of Accounting

26 CFR 1.446–1: General rule for methods of accounting.

Section 472.—Last-in, First-out Inventories

26 CFR 1.472-1: Last-in, first-out inventories.

LIFO; price indexes; department stores. The November 1999 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, November 30, 1999.

Rev. Rul. 2000–3

BUREAU OF LABOR STATISTICS, DEPARTMENT STORE INVENTORY PRICE INDEXES BY DEPARTMENT GROUPS

(January 1941 = 100, unless otherwise noted)

Percent Change Groups Nov. Nov. from Nov. 1998 1998 1999 to Nov. 1999 ¹

1. Piece Goods - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -544.5 514.3 -5.5 2. Domestics and Draperies - - - - - - - - - - - - - - - - - - - - - -635.9 622.0 -2.2 3. Women’s and Children’s Shoes - - - - - - - - - - - - - - - - - -685.8 651.4 -5.0 4. Men’s Shoes - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -916.9 875.1 -4.6 5. Infants’ Wear - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -638.3 647.6 1.5 6. Women’s Underwear - - - - - - - - - - - - - - - - - - - - - - - - -570.4 571.9 0.3 7. Women’s Hosiery - - - - - - - - - - - - - - - - - - - - - - - - - - -308.4 328.9 6.6 8. Women’s and Girls’Accessories - - - - - - - - - - - - - - - - -546.5 539.6 -1.3 9. Women’s Outerwear and Girls’ Wear - - - - - - - - - - - - - -417.0 410.3 -1.6 10. Men’s Clothing - - - - - - - - - - - - - - - - - - - - - - - - - - - -619.5 617.4 -0.3 11. Men’s Furnishings - - - - - - - - - - - - - - - - - - - - - - - - - -608.4 627.6 3.2 12. Boys’ Clothing and Furnishings - - - - - - - - - - - - - - - - - -519.0 510.2 -1.7 13. Jewelry - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -977.1 950.5 -2.7 14. Notions - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -766.3 764.6 -0.2 15. Toilet Articles and Drugs - - - - - - - - - - - - - - - - - - - - - -945.3 983.6 4.1 16. Furniture and Bedding - - - - - - - - - - - - - - - - - - - - - - - -686.8 689.7 0.4 17. Floor Coverings - - - - - - - - - - - - - - - - - - - - - - - - - - - -602.2 602.1 0.0 18. Housewares - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -811.3 789.3 -2.7 19. Major Appliances - - - - - - - - - - - - - - - - - - - - - - - - - - -238.9 235.5 -1.4 20. Radio and Television - - - - - - - - - - - - - - - - - - - - - - - - - 70.1 63.5 -9.4 21. Recreation and Education ² - - - - - - - - - - - - - - - - - - - - -102.2 96.1 -6.0 22. Home Improvements ² - - - - - - - - - - - - - - - - - - - - - - - -129.6 129.2 -0.3 23. Auto Accessories ² - - - - - - - - - - - - - - - - - - - - - - - - - -107.9 107.6 -0.3

2000–3 I.R.B. 297 January 18, 2000

Groups 1 - 15: Soft Goods - - - - - - - - - - - - - - - - - - - - - - - - - -610.0 606.9 -0.5 Groups 16 - 20: Durable Goods - - - - - - - - - - - - - - - - - - - - - - -460.4 446.9 -2.9 Groups 21 - 23: Misc. Goods ² - - - - - - - - - - - - - - - - - - - - - - - -106.9 102.7 -3.9

Store Total ³ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -554.9 547.2 -1.4

1 Absence of a minus sign before percentage change in this column signifies price increase. 2 Indexes on a January 1986=100 base. 3 The store total index covers all departments, including some not listed separately, except for the following: candy, food, liquor, tobacco, and contract departments.

DRAFTING INFORMATION

The principal author of this revenue ruling is Alan J. Tomsic of the Office of Assistant Chief Counsel (Income Tax and Accounting). For further information regarding this revenue ruling, contact Mr. Tomsic on (202) 622-4970 (not a toll-free call).

Section 706.—Taxable Year of Partner and Partnership

26 CFR 1.706–1T: Taxable years of certain partnerships.

What procedures apply for certain corporations to obtain automatic approval to change their annual accounting periods under section 442 of the Code? See Rev. Proc. 2000–11, page 309.

Section 898.—Taxable Year of Certain Foreign Corporations

What procedures apply for certain corporations to obtain automatic approval to change their annual accounting periods under section 442 of the Code? See Rev. Proc. 2000–11, page 309.

Section 1031.—Exchange of Property Held for Productive Use or Investment

26 CFR 1.1031(a)–1: Property held for productive use in trade or business or for investment.

If property subject to section 168 of the Code (MACRS property) is acquired in an exchange of MACRS property for like-kind MACRS property to which section 1031 applies, how is the depreciation allowable determined for the acquired MACRS property? See Notice 2000–4, page 313.

Section 1033.—Involuntary Conversions

26 CFR 1.1033(a)–1: Involuntary conversion; nonrecognition of gain.

If property subject to section 168 of the Code (MACRS property) is acquired in replacement of involuntarily converted MACRS property to which section 1033 applies, how is the depreciation allowable determined for the acquired MACRS property? See Notice 2000–4, page 313.

Section 1441.—Withholding of Tax on Nonresident Aliens and Foreign Corporations

26 CFR 1.1441–1: Requirement for withholding of tax on nonresident aliens, foreign partnerships, and foreign corporations.

T.D. 8856

DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Parts 1, 31, 35a, 301, 502, 503, 509, 513, 514, 516, 517, 520, 521, and 602.

General Revision of Regulations Relating to Withholding of Tax on Certain U.S. Source Income Paid to Foreign Persons and Related Collection, Refunds, and Credits; Revision of Information Reporting and Backup Withholding Regulations; and Removal of Regulations Under Parts 1 and 35a and of Certain Regulations Under Income Tax Treaties

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final rule; delay of effective date.

SUMMARY: This document contains changes delaying the effective date to final regulations (TD 8734, 1997–2 C.B. 109), which were published in the Federal Reg- ister of October 14, 1997, relating to the

withholding of income tax on certain U.S. source income payments to foreign persons. The Department of the Treasury and the IRS believe it is in the best interest of tax administration to delay the effective date of the final withholding regulations to ensure that both taxpayers and the government can complete changes necessary to implement the new withholding regime. As extended by this document, the final withholding regulations will apply to payments made after December 31, 2000.

DATES: Effective Dates : The amendments in this final rule are effective January 1, 2001. As of December 31, 1999, the effective date of the final regulations published at 62 FR 53387 (TD 8734), October 14, 1997, and delayed by TD 8804 (63 FR 72183, December 31, 1998), is delayed from January 1, 2000, until January 1, 2001; however, the effective date of the addition of §§31.9999–0 and 35a.9999–0 and the removal of §35a.9999–0T remains October 14, 1997.

FOR FURTHER INFORMATION CONTACT: Laurie Hatten-Boyd, (202) 6223840 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

The final regulations that are the subject of this amendment provide guidance under sections 1441, 1442, and 1443 of the Internal Revenue Code (Code) on certain U.S. source income paid to foreign persons, the related tax deposit and reporting requirements under section 1461 of the Code, and the related changes under sections 163(f), 165(j), 871, 881, 1462, 1463, 3401, 3406, 6041, 6041A, 6042, 6045, 6049, 6050A, 6050N, 6109, 6114, 6402, 6413, and 6724 of the Code.

Need for Changes

On April 29, 1999, in Notice 99–25

January 18, 2000 298 2000–3 I.R.B.

(1999–20 I.R.B. 1), the IRS and Treasury announced their decision to extend the effective date of the final regulations. When originally published in the Federal Register on October 14, 1997 (62 FR 53387), the final regulations were applicable to payments made after December 31, 1998 and, generally, granted withholding agents until after December 31, 1999, to obtain the new withholding certificates (Forms W8BEN, W-8ECI, W-8EXP, and W8IMY) and statements required under those regulations. On April 13, 1998, in Notice 98–16 (1998–15 I.R.B. 12), the IRS and Treasury announced the decision to extend the effective date of the final regulations to January 1, 2000 and to provide correlative extensions to the transition rules for obtaining new withholding certificates and statements. Those extensions were published on December 31, 1998 at 63 FR 72183 as TD 8804. This amendment serves to make the final regulations applicable to payments made after December 31, 2000 and to require mandatory use of the new withholding certificates and statements for payments made after that date.

Special Analyses

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. Finally, it has been determined that the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply to these regulations because the regulations do not impose a collection of information on small entities. Pursuant to 7805(f) of the Code, the notice of proposed rulemaking preceding these regulations (61 FR 17614) was submitted to the Small Business Administration for comment on its impact on small business.

Adoption of Amendments to the Regulations

Accordingly, under the authority of 26 U.S.C. 7805, 26 CFR parts 1, 31, and 301

are amended by making the following correcting amendments:

PART 1—INCOME TAXES

Par. 1. The authority citation for part 1 continues to read in part as follows:

Authority: 26 U.S.C. 7805 * * * Par. 2. In §1.871–14, paragraph (h) is revised to read as follows: §1.871–14 Rules relating to repeal of tax on interest of nonresident alien individu- als and foreign corporations received from certain portfolio debt investments.

(h) Effective date —(1) I n general . This section shall apply to payments of interest made after December 31, 2000.

(2) Transition rule . For purposes of this section, the validity of a Form W-8 that was valid on January 1, 1998, under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999) and expired, or will expire, at any time during 1998, is extended until December 31, 1998. The validity of a Form W-8 that is valid on or after January 1, 1999 remains valid until its validity expires under the regualtions in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999) but in no event will such a form remain valid after December 31, 2000. The rule in this paragraph (h)(2), however, does not apply to extend the validity period of a Form W-8 that expired solely by reason of changes in the circumstances of the person whose name is on the certificate. Notwithstanding the first three sentences of this paragraph (h)(2), a withholding agent or payor may choose to not take advantage of the transition rule in this paragraph (h)(2) with respect to one or more withholding certificates valid under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999) and, therefore, may choose to obtain withholding certificates conforming to the requirements described in this section (new withholding certificates). For purposes of this section, a new withholding certificate is deemed to satisfy the documentation requirement under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999). Further, a new

withholding certificate remains valid for the period specified in §1.1441–1(e)(4)(ii), regardless of when the certificate is obtained.

Par. 3. In §1.1441–1, as revised at 62 FR 53424 (TD 8734) and amended at 63 FR 72183 (TD 8804), paragraph (f) is revised to read as follows: §1.1441–1 Requirement for the deduction and withholding of tax on payments to foreign persons.

(f) Effective date —(1) In general. This section applies to payments made after December 31, 2000.

(2) Transition rules —(i) Special rules for existing documentation . For purposes of paragraphs (d)(3) and (e)(2)(i) of this section, the validity of a withholding certificate (namely, Form W–8, 8233, 1001, 4224, or 1078, or a statement described in §1.1441–5 in effect prior to January 1, 2001 (see §1.1441–5 as contained in 26 CFR part 1, revised April 1, 1999)) that was valid on January 1, 1998 under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999) and expired, or will expire, at any time during 1998, is extended until December 31, 1998. The validity of a withholding certificate that is valid on or after January 1, 1999, remains valid until its validity expires under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999) but in no event will such withholding certificate remain valid after December 31, 2001. The rule in this paragraph (f)(2)(i), however, does not apply to extend the validity period of a withholding certificate that expires solely by reason of changes in the circumstances of the person whose name is on the certificate. Notwithstanding the first three sentences of this paragraph (f)(2)(i), a withholding agent may choose to not take advantage of the transition rule in this paragraph (f)(2)(i) with respect to one or more withholding certificates valid under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999) and, therefore, to require withholding certificates conforming to the requirements described in this section (new withholding certificates). For purposes of this section, a new withholding certificate is deemed to satisfy the documentation requirement under the regula

2000–3 I.R.B. 299 January 18, 2000

of this section, a new withholding certificate is deemed to satisfy the documentation requirement under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999). Further, a new withholding certificate remains valid for the period specified in §1.1441–1(e)(4)(ii), regardless of when the certificate is obtained.

Par. 6. In §1.1441–6, as revised at 62 FR 53424 (TD 8734) and amended at 63 FR 72183 (TD 8804), paragraph (g) is revised to read as follows: §1.1441–6 Claim of reduced withholding under an income tax treaty.

(g) Effective date —(1) General rule . This section applies to payments made after December 31, 2000.

(2) Transition rules . For purposes of this section, the validity of a Form 1001 or 8233 that was valid on January 1, 1998, under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999) and expired, or will expire, at any time during 1998, is extended until December 31, 1998. The validity of a Form 1001 or 8233 is valid on or after January 1, 1999, remains valid until its validity expires under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999) but in no event will such a form remain valid after December 31, 2000. The rule in this paragraph (g)(2), however, does not apply to extend the validity period of a Form 1001 or 8233 that expires solely by reason of changes in the circumstances of the person whose name is on the certificate or in interpretation of the law under the regulations under §1.894–1T(d). Notwithstanding the first three sentences of this paragraph (g)(2), a withholding agent may choose to not take advantage of the transition rule in this paragraph (g)(2) with respect to one or more withholding certificates valid under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999) and, therefore, to require withholding certificates conforming to the requirements described in this section (new withholding certificates). For purposes of this section, a new withholding certificate is deemed to satisfy the documentation requirement under the regulations in effect prior to January 1, 2001

tions in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999). Further, a new withholding certificate remains valid for the period specified in paragraph (e)(4)(ii) of this section, regardless of when the certificate is obtained.

(ii) Lack of documentation for past years. A taxpayer may elect to apply the provisions of paragraphs (b)(7)(i)(B), (ii), and (iii) of this section, dealing with liability for failure to obtain documentation timely, to all of its open tax years, including tax years that are currently under examination by the IRS. The election is made by simply taking action under those provisions in the same manner as the taxpayer would take action for payments made after December 31, 2000.

Par. 4. In §1.1441–4, as amended at 62 FR 53424 (TD 8734) and at 63 FR 72183 (TD 8804), paragraph (g) is revised to read as follows: §1.1441–4 Exemptions from withholding for certain effectively connected income and other amounts.

(g) Effective date —(1) General rule. This section applies to payments made after December 31, 2000.

(2) Transition rules . The validity of a Form 4224 or 8233 that was valid on January 1, 1998, under the regulations in effect prior to January 1, 2001 (see 26 CFR part 1, revised April 1, 1999) and expired, or will expire, at any time during 1998, is extended until December 31, 1998. The validity of a Form 4224 or 8233 that is valid on or after January 1, 1999, remains valid until its validity expires under the regulations in effect prior to January 1, 2001 (see 26 CFR part 1, revised April 1, 1999) but in no event will such form remain valid after December 31, 2000. The rule in this paragraph (g)(2), however, does not apply to extend the validity period of a Form 4224 or 8223 that expires solely by reason of changes in the circumstances of the person whose name is on the certificate. Notwithstanding the first three sentences of this paragraph (g)(2), a withholding agent may choose to not take advantage of the transition rule in this paragraph (g)(2) with respect to one or more withholding certificates valid under the regulations in effect prior to January 1, 2001 (see 26 CFR part 1, re

vised April 1, 1999) and, therefore, to require withholding certificates conforming to the requirements described in this section (new withholding certificates). For purposes of this section, a new withholding certificate is deemed to satisfy the documentation requirement under the regulations in effect prior to January 1, 2001 (see 26 CFR part 1, revised April 1, 1999). Further, a new withholding certificate remains valid for the period specified in §1.1441–1(e)(4)(ii), regardless of when the certificate is obtained.

Par. 5. In §1.1441–5, as revised at 62 FR 53424 (TD 8734) and amended at 63 FR 72183 (TD 8804), paragraph (g) is revised to read as follows: §1.1441–5 Withholding on payments to partnerships, trusts, and estates.

(g) Effective date —(1) General rule. This section applies to payments made after December 31, 2000.

(2) Transition rules. The validity of a withholding certificate that was valid onJanuary 1, 1998, under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999) and expired, or will expire, at any time during 1998, is extended until December 31, 1998. The validity of a withholding certificate that is valid on or after January 1, 1999, remains valid until its validity expires under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999) but in no event will such a withholding certificate remain valid after December 31, 2000. The rule in this paragraph (g)(2), however, does not apply to extend the validity period of a withholding certificate that expires solely by reason of changes in the circumstances of the person whose name is on the certificate. Notwithstanding the first three sentences of this paragraph (g)(2), a withholding agent may choose to not take advantage of the transition rule in this paragraph (g)(2) with respect to one or more withholding certificates valid under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999) and, therefore, to require withholding certificates conforming to the requirements described in this section (new withholding certificates). For purposes

January 18, 2000 300 2000–3 I.R.B.

§1.1443–1 Foreign tax-exempt organiza- tions.

(2) Transition rules. For purposes of this section, the validity of an affidavit or opinion of counsel described in § 1.1443–1(b)(4)(i) in effect prior to January 1, 2001 (see § 1.1443–1(b)(4)(i) as contained in 26 CFR part 1, revised April 1, 1999) is extended until December 31, 2000. However, a withholding agent may chose to not take advantage of the transition rule in this paragraph (c)(2) with respect to one or more withholding certificates valid under the regulations in effect prior to January 1, 2001 (see CFR part 1, revised April 1, 1999) and, therefore, to require withholding certificates conforming to the requirements described in this section (new withholding certificates). For purposes of this section, a new withholding certificate is deemed to satisfy the documentation requirement under the regulations in effect prior to January 1, 2001 ( see 26 CFR part 1, revised April 1, 1999). Further, a new withholding certificate remains valid for the period specified in § 1.1441–1(e)(4)(ii), regardless of when the certificate is obtained.

Par. 10. In §1.6042–3, as amended at 62 FR 53424 (TD 8734) and amended at 63 FR 72183 (TD 8804), paragraph (b)(5) is revised to read as follows: §1.6042–3 Dividends subject to report- ing.

(b) * * * (5) Effective date —(i) General rule. The provisions of this paragraph (b) apply to payments made after December 31, 2000. (ii) Transition rules. The validity of a withholding certificate (namely, Form W8 or other form upon which the payor is permitted to rely to hold the payee as a foreign person) that was valid on January 1, 1998, under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999) and expired, or will expire, at any time during 1998, is extended until December 31, 1998. The validity of a withholding certificate that is valid on or after January 1, 1999, remains valid until its validity expires under the regulations in effect

(see 26 CFR parts 1 and 35a, revised April 1, 1999). Further, a new withholding certificate remains valid for the period specified in §1.1441–1(e)(4)(ii), regardless of when the certificate is obtained.

Par. 7. In §1.1441–8 as redesignated and amended at 62 FR 53464 and amended at 63 FR 72138 (TD 8804), paragraph (f) is revised to read as follows: §1.1441–8 Exemption from withholding for payments to foreign governments, in- ternational organizations, foreign central banks of issue, and the Bank for Interna- tional Settlements.

(f) Effective date —(1) In general. This section applies to payments made after December 31, 2000.

(2) Transition rules. For purposes of this section, the validity of a Form 8709 that was valid on January 1, 1998, under the regulations in effect prior to January 1, 2001 (see 26 CFR part 1, revised April 1, 1999) and expired, or will expire, at any time during 1998, is extended until December 31, 1998. The validity of a Form 8709 that is valid on or after January 1, 1999, remains valid until its validity expires under the regulations in effect prior to January 1, 2001 (see 26 CFR part 1, revised April 1, 1999) but in no event shall such a form remain valid after December 31, 2000. The rule in this paragraph (f)(2), however, does not apply to extend the validity period of a Form 8709 that expires solely by reason of changes in the circumstances of the person whose name is on the certificate. Notwithstanding the first three sentences of this paragraph (f)(2), a withholding agent may choose to not take advantage of the transition rule in this paragraph (f)(2) with respect to one or more withholding certificates valid under the regulations in effect prior to January 1, 2001 (see 26 CFR part 1, revised April 1, 1999) and, therefore, to require withholding certificates conforming to the requirements described in this section (new withholding certificates). For purposes of this section, a new withholding certificate is deemed to satisfy the documentation requirement under the regulations in effect prior to January 1, 2001 (see 26 CFR part 1, revised April 1, 1999). Further, a new withholding certificate remains valid for the period specified in §1.1441–1(e)(4)(ii), regardless of when the certificate is obtained.

Par. 8. In §1.1441–9, paragraph (d) is revised to read as follows: §1.1441–9 Exemption from withholding on exempt income of a foreign tax-exempt organization, including foreign private foundations.

(d) Effective date —(1) In general . This section applies to payments made after December 31, 2000.

(2) Transition rules . For purposes of this section, the validity of a Form W-8, 1001, or 4224 or a statement that was valid on January 1, 1998, under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999) and expired, or will expire, at any time during 1998, is extended until December 31, 1998. The validity of a Form W-8, 1001, or 4224 or a statement that is valid on or after January 1, 1999 remains valid until its validity expires under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999) but in no event shall such form or statement remain valid after December 31, 2000. The rule in this paragraph (d)(2), however, does not apply to extend the validity period of a Form W8, 1001, or 4224 or a statement that expires solely by reason of changes in the circumstances of the person whose name is on the certificate. Notwithstanding the first three sentences of this paragraph (d)(2), a withholding agent may choose to not take advantage of the transition rule in this paragraph (d)(2) with respect to one or more withholding certificates valid under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999) and, therefore, to require withholding certificates conforming to the requirements described in this section (new withholding certificates). For purposes of this section, a new withholding certificate is deemed to satisfy the documentation requirement under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999). Further, a new withholding certificate remains valid for the period specified in §1.1441–1(e)(4)(ii), regardless of when the certificate is obtained.

Par. 9. In §1.1443–1, as revised at 62 FR 53424 (TD 8734) and amended at 63 FR 72183), paragraph (c) is revised to read as follows:

2000–3 I.R.B. 301 January 18, 2000

foreign person) that was valid on January 1, 1998, under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999) and expired, or will expire, at any time during 1998, is extended until December 31, 1998. The validity of a withholding certificate that is valid on or after January 1, 1999, remains valid until its validity expires under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999) but in no event shall such a withholding certificate remain valid after December 31, 2000. The rule in this paragraph (g)(2), however, does not apply to extend the validity period of a withholding certificate that expires solely by reason of changes in the circumstances of the person whose name is on the certificate. Notwithstanding the first three sentences of this paragraph (g)(2), a payor may choose not to take advantage of the transition rule in this paragraph (g)(2) with respect to one or more withholding certificates valid under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999) and, therefore, may require withholding certificates conforming to the requirements described in this section (new withholding certificates). For purposes of this section, a new withholding certificate is deemed to satisfy the documentation requirement under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999). Further, a new withholding certificate remains valid for the period specified in §1.1441–1(e)(4)(ii), regardless of when the certificate is obtained.

Parts 1, 31, and 301 [Amended]

Par. 13. In the list below, for each section indicated in the left column (which was added, revised, or amended at 62 FR 53387 (TD 8734) and further amended at 63 FR 72138 (TD 8804), remove the language in the middle column and add the language in the right column:

prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999) but in no event shall such withholding certificate remain valid after December 31, 2000. The rule in this paragraph (b)(5)(ii), however, does not apply to extend the validity period of a withholding certificate that expires solely by reason of changes in the circumstances of the person whose name is on the certificate. Notwithstanding the first three sentences of this paragraph (b)(5)(ii), a payor may choose not to take advantage of the transition rule in this paragraph (b)(5)(ii) with respect to one or more withholding certificates valid under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999) and, therefore, to require withholding certificates conforming to the requirements described in this section (new withholding certificates). For purposes of this section, a new withholding certificate is deemed to satisfy the documentation requirement under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999). Further, a new withholding certificate remains valid for the period specified in §1.1441–1(e)(4)(ii), regardless of when the certificate is obtained.

Par. 11. In §1.6045–1, as amended at 62 FR 53424 (TD 8734) and amended at 63 FR 72183 (TD 8804), paragraph (g)(5) is revised to read as follows: §1.6045–1 Returns of information of bro- kers and barter exchanges.

(g) * * * (5) Effective date —(i) General rule. The provisions of this paragraph (g) apply to payments made after December 31, 2000. (ii) Transition rules. The validity of a withholding certificate (namely, Form W8 or other form upon which the payor is permitted to rely to hold the payee as a foreign person) that was valid on January 1, 1998, under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999) and expired, or will expire, at any time

during 1998, is extended until December 31, 1998. The validity of a withholding certificate that is valid on or after January 1, 1999, remains valid until its validity expires under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999) but in no event shall such a withholding certificate remain valid after December 31, 2000. The rule in this paragraph (g)(5)(ii), however, does not apply to extend the validity period of a form that expires in 1998 solely by reason of changes in the circumstances of the person whose name is on the certificate. Notwithstanding the first three sentences of this paragraph (g)(5)(ii), a payor may choose not to take advantage of the transition rule in this paragraph (g)(5)(ii) with respect to one or more withholding certificates valid under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999) and, therefore, to require withholding certificates conforming to the requirements described in this section (new withholding certificates). For purposes of this section, a new withholding certificate is deemed to satisfy the documentation requirement under the regulations in effect prior to January 1, 2001 (see 26 CFR parts 1 and 35a, revised April 1, 1999). Further, a new withholding certificate remains valid for the period specified in §1.1441–1(e)(4)(ii), regardless of when the certificate is obtained.

Par. 12. In §1.6049–5, as amended at 62 FR 53424 (TD 8734) and amended at 63 FR 72183 (TD 8804), paragraph (g) is revised to read as follows: §1.6049–5 Interest and original issue discount subject to reporting after De- cember 31, 1982.

(g) Effective date —(1) General rule. The provisions of paragraphs (b)(6) through (15), (c), (d), and (e) of this section apply to payments made after December 31, 2000.

(2) Transition rules. The validity of a withholding certificate (namely, Form W8 or other form upon which the payor is permitted to rely to hold the payee as a

January 18, 2000 302 2000–3 I.R.B.

Section Remove Add

1.871–14(c)(3)(ii), October 12, 2000 October 12, 2001 Example, first and sixth sentences

1.871–14(c)(3)(ii), December 31, 2000 December 31, 2001 Example, sixth sentence

1.871–14(c)(3)(ii), June 15, 2004 June 15, 2005 Example, sixth sentence

1.871–14(c)(3)(ii), June 15, 2004 June 15, 2005 Example, seventh sentence

1.1441–1(b)(4)(xix) January 1, 2000 January 1, 2001

1.1441–1(b)(4)(xix) April 1, 1998 April 1, 1999

1.1441–1(b)(7)(v), June 15, 2000 June 15, 2001 Example 1, first, fourth, and eighth sentences

1.1441–1(b)(7)(v), September 30, 2002 September 30, 2003 Example 1, third and ninth sentences

1.1441–1(b)(7)(v), March 15, 2001 March 15, 2002 Example 1, ninth sentence

1.1441–1(b)(7)(v), June 15, 2000 June 15, 2001 Example 2, first, fourth, and seventh sentences

1.1441–1(b)(7)(v), September 30, 2002 September 30, 2003 Example 2, third and seventh sentences

1.1441–1(b)(7)(v), March 15, 2001 March 15, 2002 Example 2, seventh and ninth sentences

1.1441–1(c)(6)(ii)(B) January 1, 2000 January 1, 2001

1.1441–1(c)(6)(ii)(B) April 1, 1998 April 1, 1999

1.1441–1(e)(4)(ii)(A) September 30, 2000 September 30, 2001

1.1441–1(e)(4)(ii)(A) December 31, 2003 December 31, 2004

1.1441–2(b)(3)(iv) December 31, 1999 December 31, 2000

1.1441–2(f) December 31, 1999 December 31, 2000

1.1441–3(h) December 31, 1999 December 31, 2000

1.1441–7(g) December 31, 1999 December 31, 2000

1.1461–1(i) December 31, 1999 December 31, 2000

1.1461–2(a)(4), December 2000 December 2001 Example 1 (i), second sentence

1.1461–2(a)(4), February 10, 2001 February 10, 2002 Example 1 (i), third sentence

1.1461–2(a)(4), 2000 2001 Example 1 (ii), first, second, and last sentences

2000–3 I.R.B. 303 January 18, 2000

Section Remove Add

1.1461–2(a)(4), March 15, 2001 March 15, 2002 Example 1 (ii), first sentence

1.1461–2(a)(4), 2001 2002 Example 1 (ii), third sentence

1.1461–2(a)(4), 2001 2002 Example 2, second and last sentences

1.1461–2(a)(4), June 2001 June 2002 Example 2, second sentence

1.1461–2(a)(4), July 15, 2001 July 15, 2002 Example 2, third sentence

1.1461–2(a)(4), 2000 2001 Example 2, third sentence

1.1461–2(a)(4), March 15, 2002 March 15, 2003 Example 2, last sentence

1.1461–2(a)(4), Example 3, February 15, 2001 February 15, 2002 last sentence

1.1461–2(a)(4), Example 3, March 15, 2001 March 15, 2002 last sentence

1.1461–2(d) December 31, 1999 December 31, 2000

1.1462–1(c) December 31, 1999 December 31, 2000

1.1463–1(b) December 31, 1999 December 31, 2000

1.6041–4(d) December 31, 1999 December 31, 2000

1.6041A–1(d)(3)(v) December 31, 1999 December 31, 2000

1.6045–1(d)(6)(ii)(B) December 31, 1999 December 31, 2000

1.6049–4(d)(3)(ii)(B) December 31, 1999 December 31, 2000

1.6049–5(c)(4)(v) January 1, 2000 January 1, 2001

1.6050N–1(e), last sentence December 31, 1999 December 31, 2000

31.3401(a)(6)–1(e), J anuary 1, 2000 January 1, 2001 paragraph heading

31.3401(a)(6)–1(e), January 1, 2000 January 1, 2001 first sentence

31.3401(a)(6)–1(f), December 31, 1999 December 31, 2000 paragraph heading

31.3401(a)(6)–1(f), December 31, 1999 December 31, 2000 first sentence

31.3406(g)–1(e), December 31, 1999 December 31, 2000 first sentence

31.3406(h)–2(d), December 31, 1999 December 31, 2000 penultimate sentence

31.9999–0 January 1, 2000 January 1, 2001

301.6114–1(b)(4)(ii)(C), December 31, 1999 December 31, 2000 introductory text

January 18, 2000 304 2000–3 I.R.B.

Section Remove Add

301.6114–1(b)(4)(ii)(D) December 31, 1999 December 31, 2000

301.6724–1(g)(2) Q–11 January 1, 2000 January 1, 2001

301.6724–1(g)(2) Q–11 April 1, 1998 April 1, 1999

301.6724–1(g)(2) A–11 January 1, 2000 January 1, 2001

301.6724–1(g)(2) A–11 April 1, 1998 April 1, 1999

301.6724–1(g)(3), first December 31, 1999 December 31, 2000 sentence

301.6724–1(g)(3), last January 1, 2000 January 1, 2001 sentence

301.6724–1(g)(3), last April 1, 1998 April 1, 1999 sentence

Robert E. Wenzel, Deputy Commissioner of

§ 2056(b)(7) of the Internal Revenue Code to treat an individual retirement account (IRA) and a trust as qualified terminable interest property (QTIP) if the trustee of the trust is the named beneficiary of decedent’s IRA and the surviving spouse can compel the trustee to withdraw from the IRA an amount equal to all the income earned on the IRA assets at least annually and to distribute that amount to the spouse?

Internal Revenue.

Approved December 21, 1999.

Jonathan Talisman, Acting Assistant Secretary of the Treasury Tax Policy.

(Filed by the Office of the Federal Register on December 29, 1999, 8:45 a.m., and published in the issue of the Federal Register for December 30, 1999, 64 F.R. 73408)

Section 1502.—Regulations

26 CFR 1.1502–76: Taxable year of members of group.

What procedures apply for certain corporations to obtain automatic approval to change their annual accounting periods under section 442 of the Code? See Rev. Proc. 2000–11, page 309.

Section 2056.— Bequests, Etc., to Surviving Spouse

26 CFR 20.2056(a)–1: Qualified terminable interest property elections.

Qualified terminable interest prop- erty (QTIP) elections. This ruling holds that an executor may elect under section 2056(b)(7) of the Code to treat an individual retirement account and a testamentary trust as QTIP under certain conditions. Rev. Rul. 89–89 obsoleted.

Rev. Rul. 2000–2

ISSUE

May an executor elect under

FACTS

A died in 1999 at the age of 55, survived by spouse, B, who was 50 years old. Prior to death, A established an IRA described in § 408(a). The IRA is invested only in productive assets. A named the trustee of a testamentary trust established under A ’s will as the beneficiary of all amounts payable from the IRA after A ’s death. A copy of the testamentary trust and a list of the trust beneficiaries were provided to the custodian of A ’s IRA within nine months after A ’s death. As of the date of A ’s death, the testamentary trust was irrevocable and was a valid trust under the laws of the state of A ’s domicile. The IRA was includible in A ’s gross estate under § 2039.

Under the terms of the testatmentary trust, all trust income is payable annually to B, and no one has the power to appoint trust principal to any person other than B . A ’s children, who are all younger than B, are the sole remainder beneficiaries of the trust. No other person has a beneficial interest in the trust. Under the terms of the trust, B has the power, exercisable annually, to compel the trustee to withdraw from the IRA an amount equal to the income earned on the assets held by the IRA during the year and to distribute that amount through the trust to B . The IRAdocument contains no prohi

bition on withdrawal from the IRA of amounts in excess of the annual minimum required distributions under § 408(a)(6).

In accordance with the terms of the IRA instrument, the trustee of the testamentary trust elects, in order to satisfy § 408(a)(6), to receive annual minimum required distributions using the exception to the five year rule in § 401(a)(9)(B)(iii) for distributions over a distribution period equal to a designated beneficiary’s life expectancy. Because B ’s life expectancy is the shortest of all the potential beneficiaries of the testamentary trust’s interest in the IRA (including remainder beneficiaries), the distribution period for purposes of § 401(a)(9)(B)(iii) is B ’s life expectancy. Because B is not the sole beneficiary of the testamentary trust’s interest in the IRA, the trustee elected to have the annual minimum required distributions from the IRA to the testamentary trust begin no later than December 31 of the year immediately following the year of A ’s death. The amount of the annual minimum required distribution for each year is calculated by dividing the account balance of the IRA as of the December 31 immediately preceding the year by the remaining distribution period. On B ’s death, any undistributed balance of the IRA will be distributed to the testamentary trust over the remaining distribution period.

LAW AND ANALYSIS

Section 2056(a) provides that the value of the taxable estate is, except as limited by § 2056(b), determined by deducting from the value of the gross estate an amount equal to the value of any interest in property that passes from the decedent to the surviving spouse.

2000–3 I.R.B. 305 January 18, 2000

Under § 2056(b)(1), if an interest passing to the surviving spouse will terminate, no deduction is allowed with respect to the interest if, after termination of the spouse’s interest, an interest in the property passes or has passed from the decedent to any person other than the surviving spouse (or the estate of the spouse).

Section 2056(b)(7) provides that QTIP, for purposes of § 2056(a), is treated as passing to the surviving spouse and no part of the property shall be treated as passing to any person other than the surviving spouse. Section 2056(b)(7)(B)(i) defines QTIP as property that passes from the decedent, in which the surviving spouse has a qualifying income interest for life, and to which an election applies. Under § 2056(b)(7)(B)(ii), the surviving spouse has a qualifying income interest for life if (I) the surviving spouse is entitled to all the income from the property, payable annually or at more frequent intervals, or has a usufruct interest for life in the property, and (II) no person has a power to appoint any part of the property to any person other than the surviving spouse.

Section 20.2056(b)–7(d)(2) of the Estate Tax Regulations provides that the principles of § 20.2056(b)–5(f), relating to whether the spouse is entitled for life to all of the income from the entire interest, apply in determining whether the surviving spouse is entitled for life to all of the income from the property for QTIP purposes.

Section 20.2056(b)–5(f)(1) provides that, if an interest is transferred in trust, the surviving spouse is entitled for life to all of the income from the entire interest, if the effect of the trust is to give the surviving spouse substantially that degree of beneficial enjoyment of the trust property during the surviving spouse’s life which the principles of the law of trusts accord to a person who is unqualifiedly designated as the life beneficiary of a trust.

Section 20.2056(b)–5(f)(8) provides that the terms “entitled for life” and “payable annually or at more frequent intervals” require that under the terms of the trust the income referred to must be currently (at least annually) distributable to the spouse or that the spouse must have such command over the income so that it is virtually the spouse’s. Thus, the surviving spouse will be entitled for

life to all of the income from the interest, payable annually, if, under the terms of the trust instrument, the spouse has the right exercisable annually (or more frequently) to require distribution to the spouse of the trust income, and otherwise the trust income is to be accumulated and added to corpus.

In the present situation, the IRA is payable to a trust the terms of which entitle B to receive all trust income, payable annually. In addition, no one has a power to appoint any part of the property in the trust or the IRA to any person other than B . Therefore, whether A ’s executor can elect to treat the trust and the IRA as QTIP depends on whether B is entitled to all the income for life from the IRA, payable annually.

Under the terms of the testamentary trust, B is given the power, exercisable annually, to compel the trustee to withdraw from the IRAan amount equal to all the income earned on the assets held in the IRA and pay that amount to B . If B exercises this power, the trustee must withdraw from the IRA the greater of the amount of income earned on the IRA assets during the year or the annual minimum required distribution. Nothing in the IRA instrument prohibits the trustee from withdrawing such amount from the IRA. If B does not exercise this power, the trustee must withdraw from the IRA only the annual minimum required distribution.

B ’s power to compel the trustee’s action meets the standard set forth in § 20.2056(b)–5(f)(8) for the surviving spouse to be entitled to all the income for life payable annually. Thus, B has a qualifying income interest for life within the meaning of § 2056(b)(7) in both the IRA and the testamentary trust. Furthermore, B has a qualifying income interest for life in the IRA and the testamentary trust for purposes of §§ 2519 and 2044. Because the trust is a conduit for payments equal to income from the IRA to B, A ’s executor needs to make the QTIP election under § 2056(b)(7) for both the IRA and the testamentary trust.

The result would be the same if the terms of the testamentary trust require the trustee to withdraw from the IRA annually an amount equal to all the income earned on the IRA assets and pay that amount to the surviving spouse.

HOLDING

An executor may elect under § 2056(b)(7) to treat an IRA and a trust as QTIP when the trustee of the trust is the named beneficiary of the decedent’s IRA, the surviving spouse can compel the trustee to withdraw from the IRA an amount equal to all the income earned on the IRA assets at least annually and to distribute that amount to the spouse, and no person has a power to appoint any part of the trust property to any person other than the spouse.

EFFECT ON OTHER REVENUE RULING(S)

Rev. Rul. 89–89, 1989–2 C.B. 231, is obsoleted.

DRAFTING INFORMATION

The principal author of this revenue ruling is Donna L. Mucha of the Office of Assistant Chief Counsel (Passthroughs and Special Industries). For further information regarding this revenue ruling contact Donna L. Mucha on (202) 622-3120 (not a toll-free call).

Section 6103.—Confidentiality and Disclosure of Returns and Return Information

26 CFR 301.6103(j)(5)–1T: Disclosures of return information to officers and employees of the Department of Agriculture for certain statistical purposes and related activities (temporary).

T.D. 8854

DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 301

Disclosures of Return Information to Officers and Employees of the Department of Agriculture for Certain Statistical Purposes and Related Activities

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Temporary regulation.

January 18, 2000 306 2000–3 I.R.B.

SUMMARY: This document provides a temporary regulation relating to the disclosure of return information to officers and employees of the Department of Agriculture for certain statistical purposes and related activities. The temporary regulation would permit the IRS to disclose return information to the Department of Agriculture to structure, prepare, and conduct the Census of Agriculture. The text of this temporary regulation also serves as the text of the proposed regulation REG–116704–99 published on page 325.

DATES: This regulation is effective January 4, 2000.

Applicability Date : For dates of applicability of this regulation, see, §301.6103(j)(5)– 1T(d).

FOR FURTHER INFORMATION CONTACT: Jennifer S. McGinty, (202) 6224570 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

Section 6103(j) of the Internal Revenue Code (Code) provides for the disclosure of tax information for statistical purposes. Prior to the Census of Agriculture Act of 1997 (Public Law 105113), the Bureau of Census had responsibility for preparing the Census of Agriculture. Section 6103(j)(1) authorized the Bureau of Census to receive tax information as prescribed in the regulations in structuring censuses. Treasury regulations implemented such authority with respect to the Census of Agriculture. The Census of Agriculture Act transferred responsibility for that Census from the Bureau of Census to the Department of Agriculture. In 1998, the Tax and Trade Relief Extension Act of 1998 (Public Law 105-277) added section 6103(j)(5) to provide disclosure authority for the Department of Agriculture to receive tax information to structure, prepare, and conduct the Census of Agriculture. By letter dated May 21, 1999, the Secretary of Agriculture requested that the regulations be amended so that the Department of Agriculture can begin to receive return information for purposes of the Census of Agriculture. This document contains a temporary regulation which authorizes the IRS to disclose return information to the De

partment of Agriculture for purposes of the Census of Agriculture.

Explanation of Provisions

This temporary regulation will allow the IRS to disclose return information to the Department of Agriculture for purposes of the Census of Agriculture.

The disclosure of the specific items of return information identified in this regulation is necessary in order for the Department of Agriculture to accurately identify, locate, and classify, as well as properly process, information from agricultural businesses to be surveyed for the statutorily mandated Census of Agriculture.

Special Analyses

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. For the applicability of the Regulatory Flexibility Act (5 U.S.C. chapter 6) refer to the Special Analyses section of the preamble to the cross reference notice of proposed rulemaking published in the Proposed Rules section in this issue of the ( Federal Register ). Pursuant to section 7805(f) of the Code, this temporary regulation will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small businesses.

D rafting Information

The principal author of this regulation is Jennifer S. McGinty, Office of the Assistant Chief Counsel (Disclosure Litigation), IRS. However, other personnel from the IRS and Treasury Department participated in its development.

Adoption of Amendments to the Regulations

Accordingly, 26 CFR part 301 is amended as follows:

Part 301—Procedure and Administration

Paragraph 1. The authority citation for part 301 is amended by adding an entry in numerical order to read as follows:

Authority: 26 U.S.C. 7805 * * * Section 301.6103(j)(5)–1T also issued under 26 U.S.C. 6103(j)(5);* * *

Par. 2. Section 301.6103(j)(5)–1T is added to read as follows: §301.6103(j)(5)–1T Disclosures of return information to officers and employees of the Department of Agriculture for certain statistical purposes and related activities (temporary).

(a) General rule. Pursuant to the provisions of section 6103(j)(5) of the Internal Revenue Code (Code) and subject to the requirements of paragraph (c) of this section, officers or employees of the Internal Revenue Service (IRS) will disclose return information to officers and employees of the Department of Agriculture to the extent, and for such purposes as may be, provided by paragraph (b) of this section.

(b) Disclosure of return information to officers and employees of the Department of Agriculture

(1) Officers or employees of the IRS will disclose the following return information for individuals, partnerships, and corporations with agricultural activity, as determined generally by industry code classification or the filing of returns for such activity, to officers and employees of the Department of Agriculture for purposes of, but only to the extent necessary in, structuring, preparing, and conducting, as authorized by chapter 55 of title 7, United States Code, the Census of Agriculture.

(2) From Form 1040/Schedule F—

(i) Taxpayer Identity Information (as

defined in section 6103(b)(6) of the Code); (ii) Spouse’s SSN; (iii) Annual Accounting Period; (iv) Principal Business Activity

(PBA) Code; (v) Sales of livestock and produce

raised; (vi) Taxable cooperative distribu tions; (vii) Income from custom hire and

machine work; (viii) Gross income; (ix) Master File Tax (MFT) Code; (x) Document Locator Number

(DLN); (xi) Cycle Posted; (xii) Final return indicator; and (xiii) Part year return indicator.

2000–3 I.R.B. 307 January 18, 2000

(3) From Form 943—

(i) Taxpayer Identity Information; (ii) Annual Accounting Period; (iii) Total wages subject to Medicare

taxes; (iv) Master File Tax (MFT) Code; (v) Document Locator Number

(DLN); and (viii) Cycle Posted. (6) From Form 1065 series—

(i) Taxpayer Identity Information; (ii) Annual Accounting Period; (iii) PBA Code; (iv) Gross receipts less returns and

allowances; (v) Net farm profit (loss); (vi) Master File Tax (MFT) Code; (vii) Document Locator Number

(DLN); (vi) Cycle Posted; (vii) Final return indicator; and (viii) Part year return indicator. (4) From Form 1120 series—

(i) Taxpayer Identity Information; (ii) Annual Accounting Period; (iii) Gross receipts less returns and

allowances; (iv) PBA code; (v) Parent corporation Employer

Identification Number, and related Name and PBA Code for entities with agricultural activity; (vi) Master File Tax (MFT) Code; (vii) Document Locator Number

(DLN); (viii) Cycle Posted; (ix) Final return indicator; and (x) Part year return indicator. (c) Procedures and Restrictions (1) Disclosure of return information by officers or employees of the IRS as provided by paragraph (b) of this section will be made only upon written request designating, by name and title, the officers and employees of the Department of Agriculture to whom such disclosure is authorized, to the Commissioner of Internal Revenue by the Secretary of the Department of Agriculture and describing—

(DLN); (viii) Cycle posted; (ix) Final return indicator; (x) Part year return indicator; and (xi) Consolidated return indicator. (5) From Form 851—

formation to any person, other than the taxpayer to whom such return information relates or other officers or employees of the Department of Agriculture whose duties or responsibilities require such disclosure for a purpose described in paragraph (b) of this section, except in a form that cannot be associated with, or otherwise identify, directly or indirectly, a particular taxpayer. If the IRS determines that the Department of Agriculture, or any officer or employee thereof, has failed to, or does not, satisfy the requirements of section 6103(p)(4) of the Code or regulations or published procedures thereunder, the IRS may take such actions as are deemed necessary to ensure that such requirements are or will be satisfied, including suspension of disclosures of return information otherwise authorized by section 6103(j)(5) and paragraph (b) of this section, until the IRS determines that such requirements have been or will be satisfied.

(d) Effective date: This section is applicable from January 4, 2000 through January 3, 2003.

Approved December 13, 1999.

Jonathan Talisman, Acting Assistant Secretary of

the Treasury (Tax Policy).

(Filed by the Office of the Federal Register on January 3, 2000, 8:45 a.m., and published in the issue of the Federal Register for January 4, 2000, 65 F.R. 215)

(i) Subsidiary Taxpayer Identity In formation; (ii) Annual Accounting Period; (iii) Subsidiary PBA Code; (iv) Parent Taxpayer Identity Infor mation; (v) Parent PBA Code; (vi) Master File Tax (MFT) Code; (vii) Document Locator Number

the return information is to be used. (2) No such officer or employee to whom return information is disclosed pursuant to the provisions of paragraph (b) of this section shall disclose such return in

(i) The particular return information

to be disclosed; (ii)The taxable period or date to

which such return information relates; and (iii) The particular purpose for which

Robert E. Wenzel, Deputy Commissioner

of Internal Revenue.

January 18, 2000 308 2000–3 I.R.B.