Part IV. Items — Internal Revenue Bulletin 2001-35

ated comments that are submitted timely to the IRS. The IRS and Treasury request comments on the clarity of the proposed rules and how they can be made easier to understand. All comments will be available for public inspection and copying. A public hearing will be scheduled if requested in writing by any person that timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place for the public hearing will be published in the Federal Reg- ister .

Drafting Information

The principal author of these regulations is Danielle M. Grimm, Office of the Associate Chief Counsel (Passthroughs and Special Industries). However, other personnel from the IRS and Treasury Department participated in their development.

Proposed Amendments to the Regulations

Accordingly, 26 CFR parts 1 and 301, which were proposed to be amended at 65 FR 49909 (August 16, 2000), are proposed to be further amended as follows:

PART 1—INCOME TAXES

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

Authority: 26 U.S.C. 7805 * * * Par. 2. Section 1.6011–4 as proposed to be added at 65 FR 49909 (August 16, 2000) is amended as follows:

§1.6011–4 Requirement of statement disclosing participation in certain transactions by corporate taxpayers.

[The text of the amendments to this proposed section is the same as the text of the amendments to §1.6011–4T published in T.D. 8961.]

PART 301— PROCEDURE AND ADMINISTRATION

Par. 3. The authority citation for part 301 continues to read in part as follows: Authority: 26 U.S.C. 7805 * * * Par. 4. Section 301.6111–2 as proposed to be added at 65 FR 49909 (August 16, 2000) is amended as follows:

Notice of Proposed Rulemaking

Modification of Tax Shelter Rules II

REG–103735–00; REG–110311–98; REG–103736–00

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Cross-reference notice of proposed rulemaking.

SUMMARY: These proposed rules provide the public with additional guidance needed to comply with the disclosure rules under section 6011(a), the registration requirement under section 6111(d), and the list maintenance requirement under section 6112 applicable to tax shelters. The proposed rules affect corporations participating in certain reportable transactions, persons responsible for registering confidential corporate tax shelters, and organizers of potentially abusive tax shelters. In T.D. 8961, on page 194 in this issue of the Bulletin, the IRS is issuing temporary regulations modifying the rules relating to the requirement that certain corporate taxpayers file a statement with their Federal corporate income tax returns under section 6011(a) and the registration of confidential corporate tax shelters under section 6111(d). The text of those temporary regulations also serves as the text of these proposed regulations.

DATES: Written or electronic comments and requests for a public hearing must be received by October 31, 2001.

ADDRESSES: Send submissions to: CC:ITA:RU (REG–103735–00; REG– 110311–98; REG–103736–00), room 5226, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand delivered between the hours of 8 a.m. and 5 p.m. to: CC:ITA:RU (REG–103735–00; REG–110311–98; REG–103736–00), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC. Alternatively, taxpayers may submit comments electronically via the Internet by selecting the “Tax Regs” option of the IRS Home Page or by sub

mitting comments directly to the IRS Internet site at http://www.irs.gov/tax_ regs/regslist.html.

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Danielle M. Grimm at (202) 622-3080; concerning submissions, Guy Traynor at (202) 622-7180 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

T.D. 8961 amends the Income Tax Regulations (26 CFR part 1) regarding rules relating to the filing and records requirements for certain corporate taxpayers under section 6011. The temporary regulations also amend the temporary procedure and administration regulations (26 CFR part 301) regarding the registration of confidential corporate tax shelters under section 6111.

The text of the temporary regulations also serves as the text of these proposed regulations. The preamble to the temporary regulations explains the regulations.

Special Analyses

It has been determined that this notice of proposed rulemaking 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. Because these regulations impose no new collection of information on small entities, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. Pursuant to section 7805(f) of the Internal Revenue Code, this notice of proposed rulemaking will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

Comments and Requests for a Public Hearing

Before these proposed regulations are adopted as final regulations, consideration will be given to any written comments (preferably a signed original and eight (8) copies) or electronically gener

August 27, 2001 204 2001–35 I.R.B.

ers of the white paper to consider it as an invitation to a dialogue on the subject. The dialogue is not intended to be limited to ideas in the paper.

EP personnel plan to discuss the ideas raised in the paper and listen to others’ ideas and views in professional conferences and meetings in which government representatives participate and all other available forums. In addition, EP solicits comments on whether EP should also hold a series of nationwide town meetings to permit furtherance of this dialogue. Finally, EP invites interested parties to submit written comments, preferably two copies referencing Announcement 2001–83, to the following address:

§301.6111–2 Confidential corporate tax shelters.

[The text of the amendments to this proposed section is the same as the text of the amendments to §301.6111–2T published in T.D. 8961.]

David A. Mader, Acting Deputy Commissioner

of Internal Revenue.

( Filed by the Office of the Federal Register on August 2, 2001, 2:50 p.m., and published in the issue of the Federal Register for August 7, 2001, 66 F.R. 41169)

Invitation to Participate in Dialogue on Long-Term Future of Employee Plans Determination Letter Program

Announcement 2001–83

The IRS invites the public to participate in a dialogue on the long-term future of the Employee Plans determination letter program.

Qualified plans offer significant tax advantages to employers and participants. Determination letters provide assurance to plan sponsors, participants, and other interested parties that the terms of employer-sponsored retirement plans satisfy the qualification requirements of the Code. The IRS has maintained an Employee Plans determination letter program for many years, essentially in its present form. Under this program, the Employee Plans (EP) segment of Tax Exempt and Government Entities (TE/GE) issues letters of determination regarding the qualified status of retirement plans under section 401(a) of the Internal Revenue Code and the status of related trusts under section 501(a). A determination letter, however, only provides reliance that the plan is qualified under the rules in place at the time the letter was issued. The law and rules regarding qualified plans have changed frequently over the last twenty-seven years. This requires plan amendments that result in repeated applications for determination letters for the same plan. Currently, EP is reviewing applications for plans that have been amended to reflect changes in the law from 1994

through 2000. These are referred to as the GUST ¹ amendments.

Following the recent reorganization of the IRS, EP has undertaken a project to consider the long-term future of the EP determination letter program after GUST. The question EP asks the public to consider with it is whether there might be better alternatives to the present determination letter program.

EP recently put into effect several improvements to the determination letter program (Announcement 2001–77, 2001–30 I.R.B. 83). The focus of the project that EP is now undertaking is longterm—perhaps five or more years into the future. While these long-term changes will not impact the GUST amendment process, they may have a significant impact on applications for determinations letters for changes in the law subsequent to GUST, such as those contained in the Economic Growth and Tax Relief Reconciliation Act of 2001, Pub. L. 107–16.

The scope of this project may be of interest to all parties who are involved in or affected by the determination letter program. The Service hopes to pursue this project in partnership with all stakeholders in the determination letter process who wish to participate, including plan sponsors and participants and employee benefits professionals. As a preliminary step, EP has prepared a white paper describing the project and outlining several options identified as possible alternatives to the present determination letter program. Legislative changes may be required to implement some of these options. The white paper is entitled The Future of the Employee Plans Determina- tion Letter Program: Some Possible Op- tions and it may be downloaded from the Internet at the following site: http://www.irs.gov/ep. EP asks the read

1 The term “GUST” refers to the following:

the Uruguay Round Agreements Act, Pub. L. 103-465;
the Uniformed Services Employment and Reemployment Rights Act of 1994, Pub. L. 103353;
the Small Business Job Protection Act of 1996, Pub. L. 104-188;
the Taxpayer Relief Act of 1997, Pub. L. 105-34;
the Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. 105-206; and
the Community Renewal Tax Relief Act of 2000, Pub. L. 106-554.

CC:M&SP:RU (Announcement 2001–

83), room 5626 Internal Revenue Service POB 7604, Ben Franklin Station Washington, DC 20044

Alternatively, comments may be hand delivered between the hours of 8:30 a.m. and 5 p.m. to:

CC:M&SP:RU (Announcement 2001–

Courier’s Desk Internal Revenue Service 1111 Constitution Avenue, NW Washington, DC

While not the subject of the white paper, commentators need not limit their comments to the long-term future of the determination letter program and are encouraged to submit any recommendations they have for short-term improvements. Written comments should be submitted by March 31, 2002. All written comments will be open to public inspection.

DRAFTING INFORMATION

The principal author of this announcement is James Flannery of Tax Exempt and Government Entities. For further information regarding this announcement, please contact the Employee Plans’ taxpayer assistance telephone service at (202) 283-9516 or (202) 283-9517 between the hours of 1:30 and 3:30 p.m. Eastern Time, Monday through Thursday. Mr. Flannery may be reached at (202) 283-9613. These telephone numbers are not toll-free.

2001–35 I.R.B. 205 August 27, 2001

Gods Outreach, Inc., Owensboro, KY Greensboro Baseball Association, Inc.,

Foundations Status of Certain Organizations

Announcement 2001–84

The following organizations have failed to establish or have been unable to maintain their status as public charities or as operating foundations. Accordingly, grantors and contributors may not, after this date, rely on previous rulings or designations in the Cumulative List of Organizations (Publication 78), or on the presumption arising from the filing of notices under section 508(b) of the Code. This listing does not indicate that the organizations have lost their status as organizations described in section 501(c)(3), eligible to receive deductible contributions.

Former Public Charities. The following organizations (which have been treated as organizations that are not private foundations described in section 509(a) of the Code) are now classified as private foundations:

Blessed Are They Which Are Called,

Tucson, AZ Island Creek Volunteer Fire Department,

Los Angeles, CA Brothers About Change BAC,

Memphis, TN Buddies of Wilson County, Inc.,

Greensboro, AL Habitat for Humanity International, Inc.,

Lawrenceburg, TN Harvest Green Ministries, Inc.,

Lebanon, TN Cancer Support Network, Inc.,

Lexington, KY Carpe Diem of the South, Memphis, TN Carthage Quarterback Club, Carthage, TN Catholic Oversight Reserve Foundation,

Birmingham, AL Harvest Warriors Ministries, Inc.,

Paris, TN Heart-to-Heart International, Inc.,

Lanett, AL Hchs Patriot Quarterback Club, Inc.,

(COR), Mobile, AL Cedarbrook Family Enrichment, Inc.,

Lebanon, TN Children Count Foundation, Seattle, WA Christian Word Ministries, Inc.,

Birmingham, AL Help Is Here, Inc., Miami, FL Herman Maisel Gymnasium Renovation

Fund, Inc., Mobile, AL His Ministries, Franklinton, NC In Touch in East Tennessee Crusade, Inc.,

Lexington, KY Christians in Action, Inc.,

Barbourville, KY Clarence B. and Lillian D. Robinson

Education Fund, Inc., Chattanooga, TN Clarksville Area Young Mens Christian

Greeneville, TN Innovative Solutions, Inc.,

Louisville, KY Insa New York, Inc., New York, NY International Child Care Alliance,

4 R Environment, San Anselmo, CA Alabama A & M Military Alumni

Association, Huntsville, AL Alabama Association for Gifted Children,

Association, Clarksville, TN Clifford D. Mallory Cup Foundation,

Inc., Atlanta, GA Common Cup, Memphis, TN Community Bridges, Inc., Tempe, AZ Community Builders of America,

Knoxville, TN Comprehensive Child Care Council, Inc.,

Inc., Pikeville, KY Jericho Road, Inc., Memphis, TN Johnsons Christian Care Home, Inc.,

Memphis, TN Jonathans Servant Ministries,

Nashville, TN Just Us Kids Day Care and Learning

Birmingham, AL Alabama Community Service

Corporation, Birmingham, AL Al-Nur Mosque/Islamic Center, Inc.,

Scottsville, KY Country Christmas Celebration

Louisville, KY Alexander Graham Bell Association for

Association, Savannah, TN Development Corporation of Orchard

Knob, Inc., Chattanooga, TN Don’t Lose a Stroke of Breath, Inc.,

the Deaf of Tennessee, Inc., Nashville, TN American Foundation for Courtesy,

Center, Memphis, TN Justice Center, Birmingham, AL Kare-N-Home, Inc., Birmingham, AL Kentuckians for Intermodal

Transportation, Inc., Louisville, KY Kentucky Association of Senior

Montgomery, AL Amy Baker Team Ministries, Inc.,

Owensboro, KY Andrea Glenn Concert Ministry, Inc.,

Birmingham, AL Ebenezer Ministries, Inc., Knoxville, TN Empowerment Network, Inc., Winston Salem, NC Fairhope Philanthropic Association, Inc.,

Fairhope, AL For Little People Only, Inc., Atlanta, GA For the Kids, Inc., Decatur, AL Franklin County Christian Mens

Service Corps. Program, Inc., Louisville, KY Kingdom Agenda Ministries, Inc.,

Lexington, KY Kingdom News Outreach Program,

Mobile, AL Arts in Action, Inc., Lexington, KY Ashberry Terrace, Inc.,

Fellowship, Inc., Frankfort, KY Friends of Dare, Inc., Irondale, AL Friends of Grassmere, Inc., Nashville, TN Friends of Standing Stone State Park,

Athens, AL Knoxville Inner City Kids Outreach,

Knoxville, TN Lend-A-Hand Foundation, Inc.,

Paintsville, KY Magnificat-Lexington, Inc.,

Lexington, KY McCoy Center for Community Service,

Elizabethtown, KY Association of Christian Transport

Services, Inc., Nashville, TN Atlantic Bridges Foundation,

Nashville, TN Awake, Inc., Mobile, AL Ballard Fastpitch Softball, Inc.,

Prospect, KY Baroque Brass, Inc., Belleville, TX Bible Alive Ministries, Fergus Falls, MN Birmingham 2000, Inc., Birmingham, AL Birmingham Society of Piping, Inc.,

Inc., Hilham, TN Gain, Inc., Huntsville, AL Gathering, Montgomery, AL Gatlinburg Presbyterian Child Care

Association of Murray, Inc., Murray, KY

Center, Gatlinburg, TN Gilliam & Lynch, Inc., Birmingham, AL Glendale Retirement Housing

Inc., Birmingham, AL Memphis Inner City Development

Corporation, Memphis, TN Michelle Shaffer Ministries, Inc.,

Murfreesboro, TN Mid-South Africa Link, Inc.,

Memphis, TN

Birmingham, AL

August 27, 2001 206 2001–35 I.R.B.

Mid-State Soccer League, Inc.,

Birmingham, AL Middleton Art League, Middleton, TN Millenium III Ministries, Huntsville, AL Mission America Corporation,

Southwest Alabama Court Referral

Program, Inc., Jackson, AL Stonebridge, Inc., Lexington, KY Storm Soccer Club, Inc., Paducah, KY Streetfire Youth Ministries,

Johnson City, TN Students for a Drug-Free America, Inc.,

Memphis, TN Montauk Non-Profit Housing Corp.,

Elizabethtown, KY National Access to Cryptosporidium

Nashville, TN Turn Around Treasures, Inc., Tarrant, AL United Eastern Lenape & Intertribal

Testing, Murfreesboro, TN National Community Development

Corporation (Reaching Our Cities Kids), Land O Lakes, FL National Donor Foundation, Inc.,

Band, Somerset, KY Upton Foundation, Inc., Louisville, KY Village Point Foundation, Daphne, AL Vision Innercity Paducah, Inc.,

Paducah, KY Widows Mite Home for Unwed Mothers

Louisville, KY New Horizon Cooperative, Inc.,

Memphis, TN Newports Ohio River Museum, Inc.,

and Their Babies, Utica, MI Wildlife Rescue, Knoxville, TN Wings Ministries, Gray, TN Work Unlimited, Inc., Morganfield, KY World Outreach, Inc., Eclectic, AL World War II Preservation Society, Inc.,

Newport, KY Nimbly Development Center,

Memphis, TN NKM 2, Denver, CO North Birmingham Junior Golfers

Charitable Trust, Birmingham, AL North Henry Athletic Association, Inc.,

Ashland, KY Wyngate, Inc., Lexington, KY Young Adult Leadership Association,

Newport News, VA Youth United With Senior Citizens,

Stockbridge, GA Our Daily Bread of Tennessee, Inc.,

Knoxville, TN Owensboro Family YMCA Endowment

Memphis, TN

making and notice of public hearing (REG–106917–99, 2001–27 I.R.B. 4) that was published in the Federal Register on Wednesday, June 13, 2001 (66 FR 31850) relating to certain adoptions, changes, and retentions of annual accounting periods.

FOR FURTHER INFORMATION CONTACT: Roy A. Hirschhorn and Martin Scully, Jr. at (202) 622-4960 (not a tollfree number).

SUPPLEMENTARY INFORMATION:

Background

The notice of proposed rulemaking and notice of public hearing that are the subject of this correction are under sections 441, 442, 706, 898, and 1378 of the Internal Revenue Code.

Need for Correction

As published, the notice of proposed rulemaking and notice of public hearing contains errors that may prove to be misleading and are in need of clarification.

Correction of Publication

Accordingly, the publication of the notice of proposed rulemaking and notice of public hearing (REG–106917–99), which was the subject of FR Doc. 01–13536, is corrected as follows:

On page 31850, column 3, in the preamble under the caption “SUMMARY:”, line 3, the language “441, 442, 706, and 1378 of the Internal” is corrected to read “441, 442, 706, 898, and 1378 of the Internal”.
On page 31851, column 2, in the preamble under the paragraph heading “A. Overview”, line 4, the language “taxable income), and sections 442, 706,” is corrected to read “taxable income), and sections 442, 706, 898.”
On page 31851, column 3, in the preamble under the paragraph heading “B. Section 441: Period for Computing Taxable Income,” the last line of the first paragraph, the language “514, 99th Cong., 2d Sess. 318 (1986).” is corrected to read “841, 99th Cong., 2d Sess., II–318 1986–3 (Vol. 4) C.B. 318.”
On page 31852, column 2, in the preamble under the paragraph heading “3. 52-53-week Taxable Years.”, line 8 from the top of the column, the language “and Notice 2001–35 (IRB 2001–23). In”

Fund, Inc., Owensboro, KY Parrot, Dothan, AL Pathways Teen Services, Inc.,

Clarksville, TN Phenix City Art Council, Phenix City, AL Preakness I, Inc., Lexington, KY Preakness II, Inc., Lexington, KY Preschool Daycare Institute of America,

If an organization listed above submits information that warrants the renewal of its classification as a public charity or as a private operating foundation, the Internal Revenue Service will issue a ruling or determination letter with the revised classification as to foundation status. Grantors and contributors may thereafter rely upon such ruling or determination letter as provided in section 1.509(a)–7 of the Income Tax Regulations. It is not the practice of the Service to announce such revised classification of foundation status in the Internal Revenue Bulletin.

Changes in Accounting Periods; Correction

Announcement 2001–86

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correction to notice of proposed rulemaking and notice of public hearing.

SUMMARY: This document contains corrections to a notice of proposed rule

Inc., Huntsville, AL Resurrection Ministries, Inc.,

Lawrenceburg, TN Rhema Development Foundation, Inc.,

Louisville, KY Rhema-Grace Ministries, Inc.,

Madisonville, KY Rutherford County Youth Ballet,

Murfreesboro, TN Salt & Light Ministries, Inc.,

Louisville, KY Sarah House, Maryville, TN Saving Animals From Euthansia, Inc.,

Florala, AL Simpson County Heritage Fund, Inc.,

Franklin, KY South Baldwin Museum Foundation,

Inc., Foley, AL South Central Alabama Coalition for

Citizens With Disabilities, Andalusia, AL

2001–35 I.R.B. 207 August 27, 2001

is corrected to read “and Notice 2001–35 (2001–23 I.R.B. 1314). In”.

On page 31852, column 2, in the preamble under the paragraph heading “5. Personal Service Corporations.”, paragraph 1, lines 3 and 4 from the bottom of the column, the language “now contained in Notice 2001–35 (I.R.B. 2001–23). Similarly, the rules regarding” is corrected to read “now contained in Notice 2001–35 (2000–23 I.R.B. 1314). Similarly, the rules regarding”.
On page 31852, column 3, in the preamble under the paragraph heading “5. Personal Service Corporations.”, paragraph 1, the last line of the paragraph, the language “and Notice 2001–34 (I.R.B. 2001–23).” is corrected to read “and Notice 2001–34 (2001–23 I.R.B. 1302).”.

§1.441–3 [Corrected]

On page 31859, column 3, §1.441–3, in paragraph (a)(2), line 3, the language “taxable year (i.e., a fiscal year) if elects” is corrected to read “taxable year (i.e., a fiscal year) if it elects”.

LaNita Van Dyke, Acting Chief, Regulations Unit,

Associate Chief Counsel (Income Tax and Accounting).

( Filed by the Office of the Federal Register on August 6, 2001, 8:45 a.m., and published in the issue of the Federal Register for August 7, 2001, 66 F.R. 41170)

IRS Information Reporting Program (IRP) Seminars

Announcement 2001–87

IRS Announces Year-End Training for Withholding Agents/ Employers/Payers

To help withholding agents, employers, and payers who file Forms 1042–S, For- eign Person’s U.S. Source Income Subject to Withholding, the Internal Revenue Service, Martinsburg Computing Center

(MCC) has arranged the following training sessions.

Three IRP seminars will be offered in one-day sessions, free of charge. The sessions will include the following topics:

Changes to Internal Revenue Code Section 1441 and Regulations
Effect of These Changes on Forms, Publications, and Instructions
Service Center Processing Changes
Magnetic/Electronic Format and Processing Changes

For more information, contact the IRS/MCC IRP Call Site at 304-263-8700 between 8:30 a.m. and 4:30 p.m., EST, Monday through Friday or e-mail: mccirp@irs.gov. The dates and locations are as follows:

Location Date

Washington, DC October 9 Oakland, CA October 17 Chicago, IL October 23

Minimum Cost Requirement Permitting the Transfer of Excess Assets of a Defined Benefit Pension Plan to a Retiree Health Account; Correction

Announcement 2001–90

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correction to final regulations.

SUMMARY: This document contains corrections to final regulations (T.D. 8948, 2001–28 I.R.B. 27) that were published in the Federal Register on Tuesday, June 19, 2001 (66 F.R. 32897) relating to the minimum cost requirement under section 420, which permits the transfer of excess assets of a defined benefit pension plan to a retiree health account.

DATES: This correction is effective June 19, 2001.

FOR FURTHER INFORMATION CONTACT: Janet A. Laufer or Vernon S. Carter at (202) 622-6060 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

The final regulations that are the subject of these corrections are under section 420 of the Internal Revenue Code.

Need for Correction

As published, the final regulations contain errors that may prove to be misleading and are in need of clarification.

Correction of Publication

Accordingly, the publication of the final regulations (T.D. 8948), which were the subject of FR Doc. 01–15255, is corrected as follows:

On page 32900, column 1, amendatory instruction Paragraph 1., lines 2 and 3, the language “for part 1 continues to read in part as follows:” is corrected to read “for part 1 is amended by adding a new entry in numerical order to read in part as follows:”.
On page 32900, column 1, the authority citation is corrected to read as follows:

Authority: 26 U.S.C. 7805 * * * §1.420–1 also issued under 26 U.S.C. 420(c)(3)(E).

LaNita Van Dyke, Acting Chief, Regulations Unit,

Associate Chief Counsel (Income Tax and Accounting).

( Filed by the Office of the Federal Register on August 6, 2001, 8:45 a.m., and published in the issue of the Federal Register for August 7, 2001, 66 F.R. 41133)

August 27, 2001 208 2001–35 I.R.B.