Bulletin No. 2002–28 July 15, 2002

T.D. 9000, page 87. REG–103735–00; REG–110311–98, page 109. Final, temporary, and proposed regulations under sections 6011, 6111, and 6112 of the Code modify the disclosure, registration, and list maintenance requirements relating to tax shelters.

REG–107524–00, page 110. Proposed regulations define whether an organization has a significant trade or business of lending money under section 6050P of the Code for purposes of reporting discharges of indebtedness. A public hearing is scheduled for October 8, 2002.

Notice 2002–45, page 93. This notice describes the tax treatment of an employerprovided medical care expense reimbursement plan called a health reimbursement arrangement (HRA). The notice explains that to maintain favorable tax treatment, HRAs may only reimburse employees or former employees for their medical care expenses and their spouses’ and dependents’. This notice also explains that the requirements for flexible spending arrangements (FSAs) stated in section 125 of the Code are generally not applicable to HRAs. In particular, an HRA may allow a plan participant to carry forward unused reimbursement amounts to be used for medical care expense reimbursements in later coverage periods. Also, this notice explains that to retain exemption from the section 125 FSA requirements, the HRA must be solely employer-funded and cannot be directly or indirectly paid for pursuant to salary reduction election.

(Continued on the next page) Announcements of Declaratory Judgment Proceedings Under Section 7428 begin on page 114. Finding Lists begin on page ii.

Notice 2002–50, page 98. Partnership straddle tax shelter. This notice advises taxpayers and their representatives that the described transaction, which uses a straddle, a tiered partnership, a transitory partner and the absence of a section 754 election to obtain a permanent non-economic loss, is subject to challenge by the Service on several grounds. The notice holds that the described transaction is now a “listed transaction” and warns of the potential penalties that may be imposed if taxpayers claim losses from such a transaction.