Part I. Rulings — Internal Revenue Bulletin 2002-35

Section 42.—Low-Income Housing Credit

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month of September 2002. See Rev. Rul. 2002–53, on this page.

Section 280G.—Golden Para- chute Payments

Federal short-term, mid-term, and long-term rates are set forth for the month of September 2002. See Rev. Rul. 2002–53, on this page.

Section 382.—Limitation on Net Operating Loss Carryfor- wards and Certain Built-In Losses Following Ownership Change

The adjusted applicable federal long-term rate is set forth for the month of September 2002. See Rev. Rul. 2002–53, on this page.

Section 412.—Minimum Funding Standards

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month of September 2002. See Rev. Rul. 2002–53, on this page.

Section 467.—Certain Pay- ments for the Use of Property or Services

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month of September 2002. See Rev. Rul. 2002–53, on this page.

Section 468.—Special Rules for Mining and Solid Waste Reclamation and Closing Costs

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month of September 2002. See Rev. Rul. 2002–53, on this page.

Section 482.—Allocation of Income and Deductions Among Taxpayers

Federal short-term, mid-term, and long-term rates are set forth for the month of September 2002. See Rev. Rul. 2002–53, on this page.

Section 483.—Interest on Certain Deferred Payments

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month of September 2002. See Rev. Rul. 2002–53, on this page.

Section 642.—Special Rules for Credits and Deductions

Federal short-term, mid-term, and long-term rates are set forth for the month of September 2002. See Rev. Rul. 2002–53, on this page.

Section 807.—Rules for Cer- tain Reserves

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month of September 2002. See Rev. Rul. 2002–53, on this page.

Section 846.—Discounted Unpaid Losses Defined

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month of September 2002. See Rev. Rul. 2002–53, on this page.

Section 1274.— Determin- ation of Issue Price in the Case of Certain Debt Instruments Issued for Property

(Also sections 42, 280G, 382, 412, 467, 468, 482, 483, 642, 807, 846, 1288, 7520, 7872.)

Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate . For purposes of sections 382, 1274, 1288, and other sections of the Code, tables set forth the rates for September 2002.

Rev. Rul. 2002–53

This revenue ruling provides various prescribed rates for federal income tax purposes for September 2002 (the current month). Table 1 contains the short-term, mid-term, and long-term applicable federal rates (AFR) for the current month for purposes of section 1274(d) of the Internal Revenue Code. Table 2 contains the short-term, mid-term, and long-term adjusted applicable federal rates (adjusted AFR) for the current month for purposes of section 1288(b). Table 3 sets forth the adjusted federal long-term rate and the longterm tax-exempt rate described in section 382(f). Table 4 contains the appropriate percentages for determining the low-income housing credit described in section 42(b)(2) for buildings placed in service during the current month. Finally, Table 5 contains the federal rate for determining the present value of annuity, an interest for life or for a term of years, or a remainder or a reversionary interest for purposes of section 7520.

2002–35 I.R.B. 427 September 3, 2002

REV. RUL. 2002–53 TABLE 1

Applicable Federal Rates (AFR) for September 2002

Period for Compounding

Annual Semiannual Quarterly Monthly

Short-Term

AFR 2.13% 2.12% 2.11% 2.11% 110% AFR 2.34% 2.33% 2.32% 2.32% 120% AFR 2.56% 2.54% 2.53% 2.53% 130% AFR 2.78% 2.76% 2.75% 2.74%

Mid-Term

AFR 3.75% 3.72% 3.70% 3.69% 110% AFR 4.13% 4.09% 4.07% 4.06% 120% AFR 4.51% 4.46% 4.44% 4.42% 130% AFR 4.90% 4.84% 4.81% 4.79% 150% AFR 5.66% 5.58% 5.54% 5.52% 175% AFR 6.62% 6.51% 6.46% 6.42%

Long-Term

AFR 5.23% 5.16% 5.13% 5.11% 110% AFR 5.76% 5.68% 5.64% 5.61% 120% AFR 6.29% 6.19% 6.14% 6.11% 130% AFR 6.82% 6.71% 6.65% 6.62%

REV. RUL. 2002–53 TABLE 2

Adjusted AFR for September 2002

Period for Compounding

Annual Semiannual Quarterly Monthly

Short-term adjusted AFR 1.71% 1.70% 1.70% 1.69%

Mid-term adjusted AFR 3.20% 3.17% 3.16% 3.15%

Long-term adjusted AFR 4.63% 4.58% 4.55% 4.54%

September 3, 2002 428 2002–35 I.R.B.

REV. RUL. 2002–53 TABLE 3

Rates Under Section 382 for September 2002

Adjusted federal long-term rate for the current month 4.63%

Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted federal long-term rates for the current month and the prior two months.) 4.91%

REV. RUL. 2002–53 TABLE 4

Appropriate Percentages Under Section 42(b)(2)

for September 2002

Appropriate percentage for the 70% present value low-income housing credit 8.04%

Appropriate percentage for the 30% present value low-income housing credit 3.45%

REV. RUL. 2002–53 TABLE 5

Rates Under Section 7520 for September 2002

Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years, or a remainder or reversionary interest 4.6%

SUMMARY: This document contains final regulations that allow income tax return preparers to elect an alternative to their social security number for purposes of identifying themselves on returns they prepare. The regulations are needed to implement section 6109(a) as amended by the Internal Revenue Service Restructuring and Reform Act of 1998. The regulations affect individual preparers who elect to identify themselves using a number other than their social security number.

DATES: Effective Date : These regulations are effective August 12, 2002.

Section 1288.—Treatment of Original Issue Discounts on Tax-Exempt Obligations

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month of September 2002. See Rev. Rul. 2002–53, page 427.

Section 6109.—Identifying Numbers

26 CFR 1.6109–2A: Furnishing identifying number

of income tax return preparer.

T.D. 9014

DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1

Furnishing Identifying Number of Income Tax Return Preparer

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations.

2002–35 I.R.B. 429 September 3, 2002

Par. 2. Immediately following § 1.6115–1, an undesignated center heading is added to read as follows:

REGULATIONS APPLICABLE TO RETURNS OR CLAIMS FOR REFUND FILED PRIOR TO JANUARY 1, 2000.

Par. 3. Section 1.6109–2 is redesignated as § 1.6109–2A, and transferred immediately after the undesignated center heading “REGULATIONS APPLICABLE TO RETURNS OR CLAIMS FOR REFUND FILED PRIOR TO JANUARY 1, 2000.”

Par. 4. The second sentence of redesignated § 1.6109–2A(d) is revised to read:

§ 1.6109–2A Furnishing identifying num- ber of income tax return preparer.

* * * * * (d) * * * For returns or claims for refund filed after December 31, 1999, see § 1.6109–2(a).

* * * * * Par. 5. New § 1.6109–2 is added to read as follows:

§ 1.6109–2 Income tax return preparers furnishing identifying numbers for returns or claims for refund filed after December 31, 1999.

(a) Furnishing identifying number .— (1) Each return of tax, or claim for refund of tax, under subtitle A of the Internal Revenue Code prepared by one or more income tax return preparers must include the identifying number of the preparer required by § 1.6695–1(b) to sign the return or claim for refund. In addition, if there is a partnership or employment arrangement between two or more preparers, the identifying number of the partnership or employer must also appear on the return or claim for refund. For the definition of the term “income tax return preparer” (or “preparer”) see section 7701(a)(36) and § 301.7701– 15 of this chapter. (2) The identifying number of a preparer who is an individual (not described in paragraph (a)(3) of this section) is that individual’s social security account number, or such alternative number as may be prescribed by the Internal Revenue Service in forms, instructions, or other appropriate guidance.

(3) The identifying number of a preparer (whether an individual, corporation,

Applicability Date : For dates of applicability, see §§ 1.6109–2A(d) and 1.6109– 2(d).

FOR FURTHER INFORMATION CONTACT: Michelle B. Baxter, (202) 622– 4910 (not a toll-free call).

SUPPLEMENTARY INFORMATION:

Background

Section 6109(a)(4) of the Internal Revenue Code provides that any return or claim for refund prepared by an income tax return preparer must bear the identifying number of the preparer as required by regulations prescribed by the Secretary. Prior to the amendment of section 6109(a) by the Internal Revenue Service Restructuring and Reform Act of 1998 (Public Law 105– 206, 112 Stat. 685 (RRA ’98)), section 6109(a) limited the identifying number of an individual preparer to that preparer’s social security number.

Section 3710 of RRA ’98 amended section 6109(a) by removing the requirement that an individual preparer’s identifying number be the preparer’s social security account number. Instead, under section 6109(a)(4), the Secretary may prescribe alternatives to the social security account number for purposes of identifying individual preparers.

On December 21, 1998, the IRS published Notice 98–63, 1998–2 C.B. 758, to inform preparers of the IRS’s intention to develop a system of alternative identifying numbers. On August 12, 1999, the Service published a temporary regulation (T.D. 8835, 1999–2 C.B. 317) permitting a preparer to use an alternative identifying number. Federal Register (64 FR 43910). On August 12, 1999, the Service also published a notice of proposed rulemaking (REG–105237–99, 1999–2 C.B. 331) allowing a preparer to use an alternative to their social security number for purposes of identifying themselves on returns they prepare. Federal Register (64 FR 43969). No public hearing was requested or held. No written comments were received. The proposed regulations are adopted by this Treasury decision, and the corresponding temporary regulations are removed.

Explanation of Provisions

This document contains amendments to the Income Tax Regulations (26 CFR part

to allow individual preparers to either use

their social security number or elect an alternative identifying number for purposes of identifying themselves on returns they prepare. The IRS developed Form W–7P, Application for Preparer Tax Identifica- tion Number, on which preparers may apply for an alternative identifying number.

Effective Date

The final regulations under § 1.6109–2 apply to returns or claims for refund filed after December 31, 1999. The current rules of § 1.6109–2, which are retained in § 1.6109–2A, continue to apply with respect to returns or claims for refund filed prior to January 1, 2000.

Special Analyses

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and because these regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Internal Revenue Code, these regulations will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business.

Drafting Information

The principal author of these regulations is Michelle B. Baxter, Office of Associate Chief Counsel (Procedure and Administration), Administrative Provisions and Judicial Practice Division. However, other personnel from the IRS and Treasury Department participated in their development.

* * * * *

Adoption of Amendments to the Regulations

Accordingly, 26 CFR part 1 is 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 * * *

September 3, 2002 430 2002–35 I.R.B.

Section 7520.—Valuation Tables

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month of September 2002. See Rev. Rul. 2002–53, page 427.

Section 7872.—Treatment of Loans With Below-Market In- terest Rates

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month of September 2002. See Rev. Rul. 2002–53, page 427.

or partnership) who employs or engages one or more persons to prepare the return or claim for refund (other than for the preparer) is that preparer’s employer identification number.

(b) and (c) [Reserved]. For further guidance, see § 1.6109–2A(b) and (c).

(d) Effective date . Paragraph (a) of this section and this paragraph (d) apply to returns or claims for refund filed after December 31, 1999. For returns or claims for refund filed prior to January 1, 2000, see § 1.6109–2A(a).

§ 1.6109–2T [Removed]

Par. 6. Section 1.6109–2T is removed.

David A. Mader, Acting Deputy Commissioner

of Internal Revenue.

Approved August 8, 2002.

Pamela F. Olson,

Acting Assistant Secretary of the Treasury.

(Filed by the Office of the Federal Register on August 12, 2002, 2:56 p.m., and published in the issue of the Federal Register for Wednesday, August 14, 2002, 67 F.R. 52862)

2002–35 I.R.B. 431 September 3, 2002