Part IV. Items of General Interest

Archer MSAs

Announcement 2001–99

PURPOSE

Sections 220(i) and (j) of the Internal Revenue Code provide that if the number of Medical Savings Account (MSA) returns filed for 2000 or a statutorily specified projection of the number of MSA returns that will be filed for 2001 exceeds 750,000, then October 1, 2001, is a “cutoff” date for the Archer MSA pilot project. The Internal Revenue Service (IRS) has determined that the applicable number of MSA returns filed for 2000 is 36,250 and that the applicable number of MSA returns projected to be filed for 2001 is 76,035 (after reduction in each case for statutorily specified exclusions, such as the exclusion for previously uninsured taxpayers). Consequently, October 1, 2001, is not a “cut-off” date and 2001 is not a “cut-off” year for the Archer MSA pilot project.

BACKGROUND

The Health Insurance Portability and Accountability Act of 1996 added section 220 to the Code to permit eligible individuals to establish Archer MSAs under a pilot project effective January 1, 1997. The pilot project, as amended by The Community Renewal Tax Relief Act of 2000, has a scheduled “cut-off” year of 2002, but may have an earlier “cut-off” year if the number of individuals who have established Archer MSAs exceeds certain numerical limitations. See sections 220(i) and (j).

If a year is a “cut-off” year, section 220(i)(1) generally provides that no individual will be eligible for a deduction or exclusion for Archer MSA contributions for any taxable year beginning after the “cutoff” year unless the individual (A) was an active MSA participant for any taxable year ending on or before the close of the “cutoff ” year, or (B) first became an active MSA participant for a taxable year ending after the “cut-off” year by reason of coverage under a high deductible health plan of an MSA-participating employer.

Section 220(j)(2)(A) provides that the numerical limitation for 2001 is exceeded

if the number of MSA returns filed on or before April 15, 2001, for taxable years ending with or within the 2000 calendar year, plus the Secretary’s estimate of the number of MSA returns for those taxable years which will be filed after April 15, 2001, exceeds 750,000. For this purpose, section 220(j)(2)(A) provides that a tax return is an MSA return for a taxable year if any exclusion is claimed under section 106(b) or any deduction is claimed under section 220 for that taxable year. Section 220(j)(2)(B) provides, as an alternative test, that the numerical limitation for 2001 is also exceeded if the sum of 90 percent of the MSA returns for 2000 plus the product of 2.5 and the number of Archer MSAs for taxable years beginning in 2001 that are established during the portion of 2001 preceding July 1 (based on reports by Archer MSA trustees and custodians), exceeds 750,000.

Under section 220(j)(3), in determining whether any calendar year is a “cut-off” year, the Archer MSA of any previously uninsured individual is not taken into account. In addition, section 220(j)(4)(D) specifies that, to the extent practical, all Archer MSAs established by an individual are aggregated and two married individuals opening separate Archer MSAs are to be treated as having a single Archer MSA for purposes of determining the number of Archer MSAs.

A total of 54,979 tax returns reporting an excludable or deductible contribution to an Archer MSA for the 2000 taxable year were filed by April 15, 2001. Of this total, 22,968 taxpayers were reported as being previously uninsured. It has been estimated that an additional 7,253 tax returns reporting Archer MSA contributions for the 2000 taxable year have been or will be filed after April 15, 2001, including 3,014 taxpayers who were previously uninsured. Accordingly, it has been determined that there were 62,232 (54,979 plus 7,253) MSA returns for 2000. Of this total, 25,982 (22,968 plus 3,014) were for taxpayers reported as being previously uninsured. As a result, 36,250 (62,232 minus 25,982) MSA returns count toward the applicable statutory limitation for 2001 MSA returns of 750,000.

Based on the Forms 8851 filed on or before August 1, 2001, by Archer MSA trustees and custodians, it has been determined that 22,640 taxpayers who did not have Archer MSA contributions for 2000 established Archer MSAs for 2001 during the portion of 2001 preceding July 1. Of this total, 4,967 taxpayers were reported by trustees and custodians as previously uninsured, and therefore are not taken into account in determining whether 2001 is a “cut-off” year. In addition, 272 taxpayers were reported by trustees and custodians as excludable from the count because their spouse also established an Archer MSA, and 37 taxpayers had more than one account. Accordingly, the applicable number of Archer MSAs established from January 1, 2001, through June 30, 2001, is 17,364 (22,640 minus (4,967 plus 272 plus 37)). The alternative limitation for 2001 (90 percent of the applicable number of MSA returns for 2000 plus the product of 2.5 and the number of applicable Archer MSAs established from January 1, 2001, through June 30, 2001) is 76,035 (90 percent of 36,250 plus 2.5 times 17,364), which is less than the statutory limit of 750,000. Thus, 2001 is not a “cut-off” year for the Archer MSA pilot project by reason of either the 2000 MSA returns test of section 220(j)(2)(A) or the alternative test of section 220(j)(2)(B) of the Code.

Questions regarding this announcement may be directed to Felix Zech in the Office of Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities) at (202) 622-6080 (not a toll-free number).

Foundations Status of Certain Organizations

Announcement 2001–102

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

October 15, 2001 340 2001–42 I.R.B.

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:

A.C. Milan Futbol Club, Plano, TX Aids Prevention Education and Advocacy

Fillmore, UT First Motion, Inc., Mokena, IL Forth Worth Rugby Football Corporation,

El Paso Charities Community Chest,

El Paso, TX El Paso Million Man March Initiative,

Kids Voting California, San Jose, CA Killeen Amateur Boxing Association,

Inc., El Paso, TX El Paso Minority Supplier Development

Kileen, TX King Preservation Corporation,

Chicago, IL Knights of Malta Sovereign Order of

Council, Inc., El Paso, TX Elite Credit Services, Inc., Dallas, TX Emergency Assistance Alliance, Inc.,

Hospitallers of St. John of Jerusalem, Gallatin, TN Kosher Kesher, Inc., Brooklyn, NY KPCH, Inc., Winston-Salem, NC La Habra High School Volleyball

Fort Worth, TX Environmental Mobility, Inc.,

Corpus Christi, TX Everyman Project, Austin, TX Fillmore Civic Arts Council, Inc.,

Boosters, La Habra, CA La Junta Housing Development

Corporation, La Junta, CO Lake State Community Housing, Inc.,

St. Joseph, MI Lake Villa Township Youth Football,

Resource, Austin, TX Alumni Association of Martin Luther

King, Jr. High School, New York, NY Anew a Renewal Center for Men and

Ft. Worth, TX Foundation for Aquatic Safety and

Training, Dallas, TX Foundation of Behavior Education

Women, Los Angeles, CA Anointed Voices, Corpus Christi, TX Austin Revitalization Authority,

Lake Villa, IL Lazarus Alliance, Draper, UT Learning Safari, Great Falls, VA Lets Help Sunray, Inc., Dumas, TX Life Match, Waco, TX Liga Pan Americana Aguilas, Inc.,

San Antonio, TX Lilies of the Field, Walnut, CA Lillian J. Robinson Community

Austin, TX Austin Sign Language Theatre Academy,

Modification FBEM, Fort Worth, TX Friends Who Care Foundation,

Georgetown, TX Gambian Association of Massachusetts,

Austin, TX Baptist Ministries of South Texas, Inc.,

San Antonio, TX Beta Education Foundation, Austin, TX Bible Memory Challenge Ministries,

San Antonio, TX Bishop College Historical Society, Inc.,

Dallas, TX Bridge the Gap, Inc., Fort Worth, TX Buckingham Terrace, Inc., Atlanta, GA Burleson County Reserve Law

Project Gallop, Dallas, TX Good News Music Ministry, Bryan, TX Grace Vocational Academy, Post, TX Griggs Foundation, Inc., Dallas, TX Hatzolah Jerusalem, Inc., Brooklyn, NY Helping Hands for Life, Inc., Austin, TX HFJ Community Services, Tacoma, WA Hispanic Women for Progress,

Big Spring, TX Houston Musicians Benefit Foundation,

El Cerrito, CA Maggies Playhouse, Dallas, TX Manos Extendidas, Kent, WA Mary Starke Harper Foundation, Inc.,

Somerville, MA Gamma Education Foundation,

Austin, TX Gay and Lesbian Leaders Outreach

Fairburn, GA Love of Life Pregnancy Center, Inc.,

Development Corporation, Bryan, TX Living Word Outreach, Inc.,

Tuscaloosa, AL Massachusetts Vietnam Veterans

El Paso, TX Love on 4 Paws, Ennis, TX Love the Animals Charitable Trust,

Enforcement Officers Association, Caldwell, TX Cadillac Power Hitters Association,

Kaufman, TX Calvary Center, Inc., Laredo, TX Centro De Inmigracion, Dallas, TX CFIDS Walk-A-Thon Committee,

Hicksville, NY Cherokees of North Texas, Dallas, TX Childrens Life Link, Inc., Waco, TX Chinese Broadcasting Network, Inc.,

Houston, TX Human Potential Development Corp.,

Texarkana, TX Imagination Young Peoples Center for

Foundation, Inc., W. Springfield, MA Mercy Wings International, Inc.,

Caddo Mills, TX Mica League, Inc., Philadelphia, PA Migala Foundation, Duncanville, TX Mingeikan USA Tour, Fort Worth, TX Minnesota Housing Initiative,

Richardson, TX Colorado Museum of Contemporary Arts,

Science Music and Movement in East Austin, Austin, TX Institute for Learning and

Communication Strategies, Inc., Austin, TX Institute of New Physics, Inc.,

Cincinnati, OH Montgomery Times Foundation, Inc.,

Inc., Denver, CO Colorado Volunteer Victim Advocate

Brooklyn Park, MN Mohawk Area Development Corporation,

Morgantown, WV Morning Mist Ranch, Lubbock, TX National Sexual Trauma Center, Inc.,

Program, Arvada, CO Court Appointed Special Advocates of

Upshur County, Inc., Gilmer, TX Denton Public School Foundation, Inc.,

Los Angeles, CA Internet Archive, San Francisco, CA Jaguar Museum for British Car History a

NJ Non-Profit Corp., Mahwah, NJ Johnson County Business Development

Rockville, MD Morgantown Lacrosse Club, Inc.,

Denton, TX Divine Health Care Systems, Inc.,

Corporation, Tecumseh, NE Joshua Community Development, Inc.,

Pass Christian, MS NCOA Student Civic Action Program,

San Antonio, TX East Texas Critical Incident Stress

Inc., Mcghee Tyson, TN

Management Team, Inc., Tyler, TX Ecotema, Davis, CA

Joshua, TX Kathleen Akin Scholarship Fund,

Rockport, TX

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Neighborhood in Action, Austin, TX Neighborhoods Acting Together,

Texas Hunter Education Instructors

San Antonio, TX New Directions Network, Inc.,

Galveston, TX New Life Ministries of the Rio Grande

Valley, Inc., Harlingen, TX New Millennium Educational Institute,

Rifled Arms Historical Association,

Wallkill, NY Robbie Cave Ministries, Austin, TX Roger Brown Benefit Fund, Inc.,

Association, Inc., Georgetown, TX Texas Pride Baseball, Fort Worth, TX Texas Society for Medical Staff Services,

Austin, TX Texas Socratic Foundation, Austin, TX Theatre on Elm Street Toes, Dallas, TX Thomas G. Daugherty Memorial

Scholarship Fund, Sacramento, CA Three Rivers Housing Development

Corporation, Rome, GA Transitional Services and Housing, Inc.,

Redwood City, CA Nicaraguan - American Childrens

Foundation, Inc., Miami, FL North Bay Volunteer Medical Clinic, Inc.,

Greensboro, NC Romanian Childrens Connection, Inc.,

Alexandria, VA Running Creek Animal Refuge, Inc.,

San Antonio, TX Ryan Dietzman Memorial Scholarship

Fund, Justin, TX San Antonio Public Theatre,

San Antonio, TX Sandy Ford Junior Shooters, Inc.,

Ingleside, TX North Texas Junior Golf & Education

Streator, IL Save Our Kids Boxing Association,

Foundation, Dallas, TX Northeast Alamo Community

Beavercreek, OH Twla Gibson Transplant Fund,

Development Corporation, San Antonio, TX Old East Dallas Neighborhood

Cleburne, TX Save the World Ministries, Berkeley, CA Scurry Youth Center, Snyder, TX Seagraves-Loop Youth Association,

Victoria, TX Tyler County, Woodville, TX U.I.S.D. Campus Crime Stoppers, Inc.,

Laredo, TX Umoja, Inc., Fort Worth, TX Unified Resident Council of Chandler,

Association, Dallas, TX Omega Education Foundation,

Georgetown, TX Organization for the Enrichment of

Seagraves, TX Senior Care Careers, Inc.,

Chandler, AZ Unity Foundation, San Antonio, TX Unlimited Access Educational Services,

Human Resource, Fairfield, CA Pacific Actors Company, Sonoma, CA Parker County Child Protective Services

Board, Weatherford, TX Pedastal Gardens Residents Association,

Schaumburg, IL Shades of the African-American Woman,

Austin, TX Share the Wealth Ministries,

Baltimore, MD Peoples First Intermediate Care, Phoenix, IL Pioneer Mountain Foundation, Inc.,

Mt. Airy, GA Shenango Presbyterian Senior Housing,

Inc., Oakmount, PA Sierra Community Healthcare

Foundation, Las Vegas, NV Silver City Jazz Society, Silver City, NM Sisters of Safety, Buena Vista, CO Southeastern Connecticut Mental Health

Ann Arbor, MI UPCOD, Inc., Freer, TX Vaad Ahavas Chinum, Inc., Baltimore, MD Venture Outreach International,

Fort Worth, TX Virology Institute, San Antonio, TX Visions of North Carolina, Greensboro, NC Washington Times Foundation, Inc.,

Washington, DC Weiss & Weiss Aquatics, Austin, TX Wetstone Integrated Community

Ketchum, ID Plano Lacrosse Association, Plano, TX Player Service Foundation, Newport, RI Playground For All, Inc., Azle, TX PPBA Scholarship Foundation, Inc.,

Authority, Inc., Norwich, CT Southern Oregon Family Consortium,

Medford, OR Southside Virginia Wildlife

Toledo, OH Pro-Action, El Paso, TX Professional Outreach Ministries, Inc.,

San Antonio, TX Project Hope Tenants Assoc., Inc.,

Bronx, NY Project Wheelbarrow, Inc., Canton, OH Quitman Foundation of Perpetual

Rehabilitation Center, Inc., South Hill, VA Special Events for Aids, Inc.,

Sterling Hgts., MI Springbrook Farm Corporation,

Stow, MA SSG Richard A. Fitts Veterans Transitional

Center, Inc., Braintree, MA St. Louis Bombers Rugby Football Club,

Services, San Diego, CA Where Hearts Can Mend, San Antonio, TX Women & Youth Supporting Each Other,

Los Angeles, CA Yucca Corridor Coalition of Property Owners

& Managers, Inc., Hollywood, CA Zion Arts Institute, Inc., San Antonio, TX Zions Treatment Center, Inc., Miami, FL

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.

Scholastic Funds, Quitman, TX Raymine, Dallas, TX Reaching & Identifying Special Kids

Inc., St. Louis, MO Step-Save the Earth and Its People, Inc.,

R.I.S.K., Picayune, MS Real Solution Living Program,

San Antonio, TX Reconciled Ministries, Inc.,

San Antonio, TX Recovery Haven Drug Recovery Center,

Jasper, GA Street Light Productions, Inc.,

San Antonio, TX Surgery Education Fund, Ann Arbor, MI Synergy Local Development

Medaryville, IN Rediscover Opportunity, Inc.,

Corporation, Philadelphia, PA Taskmates, Providence, RI Taylors Charities Program, Dallas, TX Telees Kids, Inc., Dallas, TX

Louisville, CO Rhythm of Life Foundation,

Los Angeles, CA

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