Part II – Inflation-adjusted Items

Applicable if Pending Legislation is not Enacted

.01 Tax Rate Tables . For tax years beginning in 2001, the tax rate tables under § 1 are as follows:

2001–3 I.R.B. 341 January 16, 2001

TABLE 1 - Section 1(a). — MARRIED INDIVIDUALS FILING JOINT RETURNS AND SURVIVING SPOUSES

If Taxable Income Is: The Tax Is:

Not Over $45,200 15% of the taxable income

Over $45,200 $6,780.00 plus 28% of but not over $109,250 the excess over $45,200

Over $109,250 $24,714.00 plus 31% of but not over $166,450 the excess over $109,250

Over $166,450 $42,446.00 plus 36% of but not over $297,300 the excess over $166,450

Over $297,300 $89,552.00 plus 39.6% of the excess over $297,300

TABLE 2 - Section 1(b). — HEADS OF HOUSEHOLDS

If Taxable Income Is: The Tax Is:

Not Over $36,250 15% of the taxable income

Over $36,250 $5,437.50 plus 28% of but not over $93,600 the excess over $36,250

Over $93,600 $21,495.50 plus 31% of but not over $151,600 the excess over $93,600

Over $151,600 $39,475.50 plus 36% of but not over $297,300 the excess over $151,600

Over $297,300 $91,927.50 plus 39.6% of the excess over $297,300

TABLE 3 - Section 1(c). — UNMARRIED INDIVIDUALS (OTHER THAN SURVIVING SPOUSES

AND HEADS OF HOUSEHOLDS)

If Taxable Income Is: The Tax Is:

Not Over $27,050 15% of the taxable income

Over $27,050 $4,057.50 plus 28% of but not over $65,550 the excess over $27,050

Over $65,550 $14,837.50 plus 31% of but not over $136,750 the excess over $65,550

Over $136,750 $36,909.50 plus 36% of but not over $297,300 the excess over $136,750

Over $297,300 $94,707.50 plus 39.6% of the excess over $297,300

TABLE 4 - Section 1(d). — MARRIED INDIVIDUALS FILING SEPARATE RETURNS

If Taxable Income Is: The Tax Is:

Not Over $22,600 15% of the taxable income

Over $22,600 $3,390.00 plus 28% of but not over $54,625 the excess over $22,600

Over $54,625 $12,357.00 plus 31% of but not over $83,225 the excess over $54,625

Over $83,225 $21,223.00 plus 36% of but not over $148,650 the excess over $83,225

Over $148,650 $44,776.00 plus 39.6% of the excess over $148,650

January 16, 2001 342 2001–3 I.R.B.

TABLE 5 - Section 1(e). — ESTATES AND TRUSTS

If Taxable Income Is: The Tax Is:

Not Over $1,800 15% of the taxable income

Over $1,800 $270.00 plus 28% of but not over $4,250 the excess over $1,800

Over $4,250 $956.00 plus 31% of but not over $6,500 the excess over $4,250

Over $6,500 $1,653.50 plus 36% of but not over $8,900 the excess over $6,500

Over $8,900 $2,517.50 plus 39.6% of the excess over $8,900

.03 Earned Income Tax Credit .

(1) In general . For tax years beginning in 2001, the following amounts are used to determine the earned income tax credit under § 32(b). The “earned income amount” is the amount of earned income

at or above which the maximum amount of the earned income tax credit is allowed. The “threshold phaseout amount” is the amount of modified adjusted gross income (or, if greater, earned income) above which the maximum amount of the

credit begins to phase out. The “completed phaseout amount” is the amount of modified adjusted gross income (or if greater, earned income) at or above which no credit is allowed.

Maximum Threshold Completed Number Amount of Earned Income Phaseout Phaseout of Children the Credit Amount Amount Amount

1 $2,424 $ 7,130 $13,090 $28,260

2 or more $4,008 $10,020 $13,090 $32,121

None $ 364 $ 4,760 $ 5,950 $10,710

.22 Notice of Large Gifts Received from Foreign Persons . For tax years beginning in 2001, recipients of gifts from certain foreign persons may have to report these gifts under § 6039F if the aggregate value of gifts received in a taxable year exceeds $11,271.

.23 Persons against Which a Federal Tax Lien is Not Valid . For calendar year 2001, a federal tax lien is not valid against (1) certain purchasers under § 6323(b)(4) that purchased personal property in a casual sale for less than $1,100, or (2) a mechanic’s lienor under § 6323(b)(7) that repaired or improved certain residential property if the contract price with the owner is not more than $5,480.

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 Contributions 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 Procedural 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.

2001–3 I.R.B. i January 16, 2001

Numerical Finding List ¹

Bulletins 2001–1 and 2

Announcements:

2001–1, 2001–2 I.R.B. 277 2001–2, 2001–2 I.R.B. 277 2001–3, 2001–2 I.R.B. 278 2001–4, 2001–2 I.R.B. 286 2001–5, 2001–2 I.R.B. 286

Notices:

2001–1, 2001–2 I.R.B. 261 2001–2, 2001–2 I.R.B. 265 2001–3, 2001–2 I.R.B. 267 2001–4, 2001–2 I.R.B. 267

Railroad Retirement Quarterly Rates:

2001–2 I.R.B. 258

Revenue Procedures:

2001–1, 2001–1 I.R.B. 1 2001–2, 2001–1 I.R.B. 79 2001–3, 2001–1 I.R.B. 111 2001–4, 2001–1 I.R.B. 121 2001–5, 2001–1 I.R.B. 164 2001–6, 2001–1 I.R.B. 194 2001–7, 2001–1 I.R.B. 236 2001–8, 2001–1 I.R.B. 239 2001–10, 2001–2 I.R.B. 272 2001–11, 2001–2 I.R.B. 275

Revenue Rulings:

2001–2, 2001–2 I.R.B. 255

Treasury Decisions:

8910, 2001–2 I.R.B. 258

1 A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2000–27 through 2000–52 is in Internal Revenue Bulletin 2001–1, dated January 2, 2001.

January 16, 2001 ii 2001–3 I.R.B.

Finding List of Current Actions on Previously Published Items ¹

Bulletins 2001–1 and 2

Announcement:

99–79 Superseded by Ann. 2001–3, 2001–2 I.R.B. 278

Cumulative Bulletin:

1998–2 Corrected by Ann. 2001–5, 2001–2 I.R.B. 286

Notices:

Notice 2000–21 Superseded by Notice 2001–1, 2001–2 I.R.B. 261

Revenue Procedures:

99–49 Modified and amplified by Rev. Proc. 2001–10, 2001–2 I.R.B. 272

2000–1 Superseded by Rev. Proc. 2001–1, 2001–1 I.R.B. 1

2000–2 Superseded by Rev. Proc. 2001–2, 2001–1 I.R.B. 79

2000–3 Superseded by Rev. Proc. 2001–3, 2001–1 I.R.B. 111

2000–4 Superseded by Rev. Proc. 2001–4, 2001–1 I.R.B. 121

2000–5 Superseded by Rev. Proc. 2001–5, 2001–1 I.R.B. 164

2000–6 Superseded by Rev. Proc. 2001–6, 2001–1 I.R.B. 194

2000–7 Superseded by Rev. Proc. 2001–7, 2001–1 I.R.B. 236

2000–8 Superseded by Rev. Proc. 2001–8, 2001–1 I.R.B. 239

2000–22 Modified and superseded by Rev. Proc. 2001–10, 2001–2 I.R.B. 272

Treasury Decisions:

8889 Corrected by Ann. 2001–4, 2001–2 I.R.B. 286

1 A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2000–27 through 2000–52 is in Internal Revenue Bulletin 2001–1, dated January 2, 2001.

2001–3 I.R.B. iii January 16, 2001

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