Closing Agreement on Final Determination Covering Specific Matters

Under § 7121 of the Internal Revenue Code of 1986,

[Taxpayer’s name, address, telephone number, and identifying number]

(“the taxpayer”) and the Commissioner of Internal Revenue make the following closing agreement:

WHEREAS, the taxpayer is a distributor of open-end regulated investment companies (“mutual funds”).

WHEREAS, the taxpayer is an accrual basis taxpayer.

WHEREAS, the taxpayer incurs commissions on the sale of shares in the mutual funds for which the taxpayer is to receive a distribution fee under Rule 12b–1 (17 C.F.R. § 270.12b–1). For purposes of this closing agreement, the term “distributor commissions” has the meaning ascribed to it in Rev. Proc. 2000–38.

WHEREAS, the taxpayer seeks to account for distributor commissions under one of the methods described in Rev. Proc. 2000–38 and has filed a Form 3115 requesting permission to change its method of accounting for distributor commissions in accordance with Rev. Proc. 2000–38 and the Commissioner is relying on that Form 3115 in proceeding with this closing agreement.

NOW IT IS HEREBY DETERMINED AND AGREED for federal income tax purposes:

1. That the taxpayer changes its present method of accounting for distributor commissions for purposes of filing federal tax returns to the [Insert name of method] method described in Rev. Proc. 2000–38 effective for the taxable year which includes January 1, 2001 (“year of change”). The Commissioner consents to that change in method of accounting.

2. That the execution of this agreement does not signify the Commissioner’s agreement with the useful life or recovery method selected by the taxpayer. In accordance with § 601.204(c) of the Statement of Procedural Rules, in examining returns involving the adoption of either the useful life method or the distribution fee period method the Commissioner will ascertain whether the representations on which the change in method of accounting is based, including representations related to the useful life of the distributor commissions, reflect an accurate statement of the material facts.

3. That the taxpayer’s change in accounting method for distributor commissions must be made using a cut-off method without an adjustment under § 481(a).

4. That the Commissioner accepts the taxpayer’s reported method of accounting for distributor commissions for all taxable years prior to the year of change.

5. That this agreement does not preclude the taxpayer from requesting, nor the Service from requiring, a change in the taxpayer’s method of accounting for distributor commissions for years after the year of change.

This agreement is final and conclusive except:

(1) The matter it relates to may be reopened in the event of fraud, malfeasance or misrepresentation of a material fact;

(2) It is subject to the Internal Revenue Code Sections that expressly provide that effect be given to their provisions (including any stated exception for I.R.C. § 7122) notwithstanding any law or rule of law; and

(3) If it relates to a tax period ending after the date of this agreement, it is subject to any law enacted after the agreement date, that applies to the tax period.

October 2, 2000 314 2000–40 I.R.B.

By Signing, the parties certify that they have read and agreed to the terms of this document.

Taxpayer (other than individual):

By: Date:

Title:

Commissioner of Internal Revenue

By: Date:

Title:

Instructions

This agreement must be signed and filed in triplicate. (All copies must have original signatures.) The original and copies of the agreement must be identical. The name of the taxpayer must be stated accurately. The agreement may relate to one or more years.

If an attorney or agent signs the agreement for the taxpayer, the power of attorney (or a copy) authorizing that person to sign must be attached to the agreement. If the agreement is made for a year when a joint income tax return was filed by a husband and wife, it should be signed by or for both spouses. One spouse may sign as agent for the other if the document (or a copy) specifically authorizing that spouse to sign is attached to the agreement.

If the fiduciary signs the agreement for a decedent or an estate, an attested copy of the letters testamentary or the court order authorizing the fiduciary to sign, and a certificate of recent date that the authority remains in full force and effect must be attached to the agreement. If a trustee signs, a certified copy of the trust instrument or a certified copy of extracts from that instrument must be attached showing:

(1) the date of the instrument;

(2) that it is or is not of record in any court;

(3) the names of the beneficiaries;

(4) the appointment of the trustee, the authority granted, and other information necessary to show that the authority extends to Federal tax matters; and

(5) that the trust has not been terminated, and that the trustee appointed is still acting. If a fiduciary is a party, Form 56, Notice Concerning Fiduciary Relationship, is ordinarily required.

If the taxpayer is a corporation, the agreement must be dated and signed with the name of the corporation, the signature and title of an authorized officer or officers, or the signature of an authorized attorney or agent. It is not necessary that a copy of an enabling corporate resolution be attached.

Use additional pages if necessary, and identify them as part of this agreement.

Please see Revenue Procedure 68–16, C. B. 1968 1, page 770, for a detailed description of practices and procedures applicable to most closing agreements.

I have examined the specific matters involved and recommend the acceptance of the proposed agreement

(Receiving Officer) (Date)

(Title)

I have examined the specific matters involved and recommend the acceptance of the proposed agreement

(Reveiwing Officer) (Date)

(Title)

2000–40 I.R.B. 315 October 2, 2000