Part IV. Items of General Interest

Treasury also believe that taxpayers have improperly relied upon opinions or advice that a regulation is invalid without disclosing on their returns their position that the regulation is invalid.

Accordingly, the IRS and Treasury have concluded that the regulations under sections 6662 and 6664 should be amended and clarified so that (1) a taxpayer who takes a position that a regulation is invalid cannot rely on an opinion or advice to satisfy the reasonable cause and good faith exception under section 6664(c) with respect to any underpayment attributable to such position if the position was not disclosed on a return; and (2) a taxpayer who engages in a reportable transaction cannot rely on an opinion or advice to satisfy the reasonable cause and good faith exception under section 6664(c) with respect to any underpayment attributable to the transaction if the transaction was not disclosed pursuant to the regulations promulgated under section 6011. Further, a taxpayer who engages in a reportable transaction cannot rely on the realistic possibility standard under section 6662 to avoid the accuracy-related penalty for negligence or disregard of rules or regulations if the position regarding the reportable transaction is contrary to a revenue ruling or notice.

Explanation of Provisions

These proposed regulations amend 26 CFR part 1 relating to the defenses available to the imposition of the accuracyrelated penalty under section 6662(b)(1) (underpayments of tax attributable to negligence or disregard of rules or regulations) and the general exception to the accuracy-related penalty under section 6664(c). Under these proposed regulations, the adequate disclosure exception to the accuracyrelated penalty for underpayments of tax attributable to negligence or disregard of rules or regulations (see § 1.6662–3(a)) will not apply to underpayments relating to a reportable transaction unless the reportable transaction also is disclosed under § 1.6011– 4T. In addition, if a position relates to a reportable transaction and is contrary to a revenue ruling or notice (other than a notice of proposed rulemaking), a taxpayer may not rely upon the fact that the posi

Notice of Proposed Rulemaking

Establishing Defenses to the Imposition of the Accuracy-Related Penalty

REG–126016–01

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking.

SUMMARY: This document contains proposed regulations that limit the defenses available to the imposition of the accuracyrelated penalty when taxpayers fail to disclose reportable transactions or fail to disclose that they have taken a position on a return based upon a regulation being invalid. By limiting a taxpayer’s ability to use an opinion or advice from a tax professional as a basis for a defense, the proposed regulations are intended to promote the disclosure of reportable transactions and positions by taxpayers that conflict with regulations issued by the Secretary. The proposed regulations also clarify the existing regulations with respect to the facts and circumstances that the IRS will consider in determining whether a taxpayer acted with reasonable cause and in good faith in relying on an opinion or advice.

DATES: Written or electrically generated comments and requests for a public hearing must be received by March 31, 2003.

ADDRESSES: Send submissions to CC:IT&A:RU (REG–126016–01), room 5226, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to: CC:IT&A:RU (REG–126016–01), Courier’s Desk, Internal Revenue Building, 1111 Constitution Avenue, NW, Washington, DC. Alternatively, taxpayers may submit comments electronically directly to the IRS Internet site at: www.irs.gov/regs.

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Jamie G. Bernstein or Heather L. Dostaler at (202) 622–4940; concerning

submissions of comments and requests for a public hearing, Ms. LaNita Van Dyke of the Regulations Unit at (202) 622–7180 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

This document contains proposed regulations amending the regulations promulgated pursuant to sections 6662 and 6664, relating to the accuracy-related penalty. Section 6662 provides for the imposition of an accuracy-related penalty for underpayments of tax, including underpayments due to negligence or disregard of rules or regulations and understatements that are sub- stantial within the meaning of the statute. Taxpayers, however, can avoid the accuracyrelated penalty if they can establish, among other things, that there was reasonable cause for the underpayment and that they acted in good faith within the meaning of section 6664(c).

Temporary regulations issued under section 6011 require taxpayers to disclose re- portable transactions on their returns within the meaning of those temporary regulations. Treas. Reg. § 1.6011–4T. Reportable transactions may be abusive tax avoidance transactions. The early identification of potentially abusive tax avoidance transactions is a high priority for the IRS and Treasury. On October 22, 2002, the IRS and Treasury published proposed and temporary regulations that significantly revise the definition of certain types of reportable transactions. See Tax Shelter Disclosure Statements, (T.D. 9017, 2002–45 I.R.B. 815 [67 FR 64799] and REG– 103735–00, 2002–45 I.R.B. 832 [67 FR 64840]) (October 22, 2002) (to be codified in 26 CFR parts 1, 20, 25, 31, 53, 54, 56, and 301). The proposed amendments to the disclosure rules under section 6011 generally will apply to transactions entered into on or after January 1, 2003.

The IRS and Treasury believe that taxpayers have improperly relied on opinions or advice issued by tax advisors to establish reasonable cause and good faith as a basis for avoiding the accuracy-related penalty, even when the opinion or advice relates to a reportable transaction that the taxpayer should have, but did not, disclose pursuant to § 1.6011–4T. The IRS and

February 18, 2003 486 2003–7 I.R.B.

Comments and Requests for a Public Hearing

Before these proposed regulations are adopted as final regulations, consideration will be given to any written (a signed original and eight (8) copies) or electronic comments that are submitted timely to the IRS. The IRS and Treasury Department request comments on the clarity of the proposed regulations and how they can be made easier to understand. All comments will be available for public inspection and copying. A public hearing may 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 Register .

Drafting Information

The principal authors of these regulations are Jamie G. Bernstein and Heather L. Dostaler of the Office of Associate Chief Counsel (Procedure and Administration), Administrative Provisions and Judicial Practice Division.

* * * * *

Proposed Amendments to the Regulations

Accordingly, 26 CFR part 1 is proposed to be 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 1.6662–3 is amended by:

1. Revising paragraph (a).

2. Revising the last sentence of paragraph (b)(2).

3. Revising the first sentence of paragraph (c)(1).

The revisions read as follows:

§ 1.6662–3 Negligence or disregard of rules or regulations.

(a) In general. If any portion of an underpayment, as defined in section 6664(a) and § 1.6664–2, of any income tax imposed under subtitle A of the Internal Revenue Code that is required to be shown on a return is attributable to negligence or disregard of rules or regulations, there is added to the tax an amount equal to 20 percent of such portion. The penalty for disre

tion has a realistic possibility of being sustained on the merits as a defense to the penalty imposed under section 6662(b)(1). The taxpayer instead would be required to satisfy the adequate disclosure exception under § 1.6662–3(c)(1), including the disclosure of the reportable transaction under § 1.6011–4T.

The proposed regulations also clarify and modify the standards for, and limits on, the use of opinions and advice to satisfy the reasonable cause and good faith exception under section 6664(c) as a defense to the imposition of the accuracy-related penalty under section 6662. The proposed regulations, for instance, clarify that a taxpayer’s education, sophistication and business experience will be relevant in determining whether the taxpayer’s reliance on the opinion or advice was reasonable and made in good faith. The IRS currently takes these facts and circumstances into account in determining whether a taxpayer has satisfied the reasonable cause and good faith exception under section 6664(c).

These proposed regulations amend § 1.6664–4(c) to specify when a taxpayer cannot rely upon an opinion or advice to satisfy the reasonable cause and good faith exception. Taxpayers who do not disclose positions based upon a regulation being invalid (see § 1.6662–3(c)(2)) cannot use an opinion or advice concerning the invalidity of the regulation as a basis for satisfying the reasonable cause and good faith exception under section 6664(c). Similarly, the proposed regulations prohibit taxpayers from using an opinion or advice as a basis for satisfying the reasonable cause and good faith exception under section 6664(c) with respect to a reportable transaction that the taxpayer did not disclose in accordance with § 1.6011–4T.

Under these proposed regulations, a taxpayer, in order to properly disclose a transaction, may be required to file with the taxpayer’s return more than one disclosure form for the same transaction in order to satisfy the requirements in the regulations under sections 6662 and 6664 (as modified by these proposed regulations), and section 6011. The IRS and Treasury may consider permitting taxpayers to use a single disclosure document to satisfy those regulations, provided that all required information is provided by the taxpayer and provided that the taxpayer files a copy of the document with the Office of

Tax Shelter Analysis as required under § 1.6011–4T (or as may be otherwise provided in any successor regulations).

Proposed Effective Date

These regulations are proposed to apply to returns filed after December 30, 2002, with respect to transactions entered into on or after January 1, 2003, to coincide with the temporary regulations relating to disclosure, promulgated under section 6011 and applicable for transactions entered into on or after January 1, 2003. The IRS, however, cautions taxpayers and tax practitioners that it will rigorously apply the existing facts and circumstances standard under § 1.6664–4(c) regarding a taxpayer’s reasonable reliance in good faith on advice from a tax professional, as well as the other provisions of the regulations under sections 6662 and 6664, including § 1.6664– 4(c) relating to special rules for the substantial understatement penalty attributable to tax shelter items of a corporation. In addition to the modifications contained in these proposed regulations, and regardless of when a transaction was entered into, the IRS, in appropriate circumstances, may consider a taxpayer’s failure to disclose a reportable transaction or failure to disclose a position that a regulation is invalid as a factor in determining whether the taxpayer has satisfied the reasonable cause and good faith exception under section 6664(c) to the accuracy-related penalty.

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, and because the regulation does 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, this notice of proposed rulemaking will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small businesses.

2003–7 I.R.B. 487 February 18, 2003

have known, that the advisor lacked knowledge in the relevant aspects of Federal tax law.

(i) * * * In addition, the requirements of this paragraph (c)(1) are not satisfied if the taxpayer fails to disclose a fact that it knows, or reasonably should know, to be relevant to the proper tax treatment of an item.

* * * * * (iii) Reliance on the invalidity of a regu- lation. A taxpayer may not rely on an opinion or advice that a regulation is invalid to establish that the taxpayer acted with reasonable cause and good faith unless the taxpayer adequately disclosed, in accordance with § 1.6662–3(c)(2), including the disclosure of the position that the regulation in question is invalid, and, if the position relates to a reportable transaction as defined in § 1.6011–4T(b), the transaction is disclosed in accordance with § 1.6011– 4T. (2) Opinions or advice relating to re- portable transactions. Taxpayers may not reasonably rely on an opinion or advice of a tax advisor if the opinion or advice is disqualified under this paragraph. An opinion or advice is disqualified if it relates to the appropriate tax treatment of a reportable transaction, as defined in § 1.6011– 4T(b), and the taxpayer does not disclose the transaction in accordance with § 1.6011– 4T.

* * * * *

David A. Mader, Assistant Deputy Commissioner

of Internal Revenue.

(Filed by the Office of the Federal Register on December 30, 2002, 8:45 a.m., and published in the issue of the Federal Register for December 31, 2002, 67 F.R. 79894)

Notice of Proposed Rulemak- ing by Cross-Reference to Temporary Regulation and Notice of Public Hearing

Section 6038—Returns Required With Respect to Controlled Foreign Partnerships

REG–124069–02

AGENCY: Internal Revenue Service (IRS), Treasury.

garding rules or regulations does not apply, however, if the requirements of paragraph (c)(1) of this section are satisfied and the position in question is adequately disclosed as provided in paragraph (c)(2) of this section (and, if the position relates to a reportable transaction as defined in § 1.6011–4T(b), the transaction is disclosed in accordance with § 1.6011–4T), or to the extent that the reasonable cause and good faith exception to this penalty set forth in § 1.6664–4 applies. In addition, if a position with respect to an item (other than with respect to a reportable transaction, as defined in § 1.6011–4T(b)) is contrary to a revenue ruling or notice (other than a notice of proposed rulemaking) issued by the Internal Revenue Service and published in the Internal Revenue Bulletin (see § 601.601(d)(2) of this chapter), this penalty does not apply if the position has a realistic possibility of being sustained on its merits. See § 1.6694–2(b) of the income tax return preparer penalty regulations for a description of the realistic possibility standard.

(b) * * * (2) * * * Nevertheless, a taxpayer who takes a position (other than with respect to a reportable transaction, as defined in § 1.6011–4T(b)) contrary to a revenue ruling or a notice has not disregarded the ruling or notice if the contrary position has a realistic possibility of being sustained on its merits.

* * * * * (c) * * * (1) * * * No penalty under section 6662(b)(1) may be imposed on any portion of an underpayment that is attributable to a position contrary to a rule or regulation if the position is disclosed in accordance with the rules of paragraph (c)(2) of this section (and, if the position relates to a reportable transaction as defined in § 1.6011–4T(b), the transaction is disclosed in accordance with § 1.6011–4T) and, in case of a position contrary to a regulation, the position represents a good faith challenge to the validity of the regulation.

Par. 3. Section 1.6664–0 is amended by:

1. Adding an entry for § 1.6664– 4(c)(1)(iii).
2. Redesignating the entries for § 1.6664–4(c)(2) and (c)(3) as § 1.6664– 4(c)(3) and (c)(4), respectively.
3. Adding a new entry for § 1.6664– 4(c)(2).

The additions read as follows:

§ 1.6664–0 Table of contents.

* * * * *

§ 1.6664–4 Reasonable cause and good faith exception to section 6662 penalties.

* * * * * (c) * * * (1) * * * (iii) Reliance on the invalidity of a regulation.

(2) Opinions or advice relating to reportable transactions.

* * * * * Par. 4. Section 1.6664–4 is amended by:

1. Revising paragraph (c)(1) introductory text.

2. Revising the last sentence of paragraph (c)(1)(i).

3. Adding paragraph (c)(1)(iii).

4. Redesignating paragraphs (c)(2) and (c)(3) as paragraphs (c)(3) and (c)(4), respectively.

5. Adding a new paragraph (c)(2). The revision and additions read as follows:

§ 1.6664–4 Reasonable cause and good faith exception to section 6662 penalties.

(c) Reliance on opinion or advice - (1) Facts and circumstances; minimum re- quirements. All facts and circumstances must be taken into account in determining whether a taxpayer has reasonably relied in good faith on advice (including the opinion of a professional tax advisor) as to the treatment of the taxpayer (or any entity, plan, or arrangement) under Federal tax law. For example, the taxpayer’s education, sophistication and business experience will be relevant in determining whether the taxpayer’s reliance on the advice was reasonable and made in good faith. In no event will a taxpayer be considered to have reasonably relied in good faith on advice (including an opinion) unless the requirements of this paragraph (c)(1) are satisfied and the advice is not disqualified under paragraph (c)(2) of this section. The fact that these requirements are satisfied, however, will not necessarily establish that the taxpayer reasonably relied on the advice (including the opinion of a professional tax advisor) in good faith. For example, reliance may not be reasonable or in good faith if the taxpayer knew, or reasonably should

February 18, 2003 488 2003–7 I.R.B.

Background and Explanation of Provisions

The temporary regulation in this issue of the Bulletin amends 26 CFR part 1. If a foreign partnership files Form 1065 or Form 1065–B and a United States partner is required to file Form 8865 with respect to that partnership, the temporary regulation amends Treas. Reg. § 1.6038–3 to provide that the United States partner must follow the filing requirements that are specified in the instructions for Form 8865. The text of the temporary regulation also serves as the text of this proposed regulation. The preamble to the temporary regulation explains the temporary regulation and this proposed regulation.

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 and because this regulation does not impose a collection of information on small entities, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. 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 businesses.

Comments and Public Hearing

Before this proposed regulation is adopted as a final regulation, consideration will be given to any written (a signed original and eight (8) copies) or electronic comments that are submitted timely to the IRS. The IRS and Treasury Department 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 has been scheduled for March 12, 2003, at 10 a.m., in the Auditorium, Internal Revenue Building, 1111 Constitution Avenue, NW, Washington, DC. Because of access restrictions, visitors will not be admitted beyond the immediate en

ACTION: Notice of proposed rulemaking by cross-reference to temporary regulation and notice of public hearing.

SUMMARY: In this issue of the Bulletin, the IRS is issuing a temporary regulation (T.D. 9033) relating to controlled foreign partnerships. That document requires that the United States partner must follow the filing requirements that are specified in the instructions for Form 8865. The text of that regulation also serves as the text of this proposed regulation. This document also provides notice of a public hearing on these proposed regulations.

DATES: Written or electronic comments must be received by March 24, 2003. Outlines of topics to be discussed at the public hearing scheduled for March 12, 2003, at 10 a.m., must be received by February 19, 2003.

ADDRESSES: Send submissions to: CC:ITA:RU (REG–124069–02), room 5226, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand delivered Monday through Friday between the hours of 8 a.m. and 5 p.m. to: CC:ITA:RU (REG– 124069–02), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC. Alternatively, taxpayers may submit electronic comments directly to the IRS internet site at www.irs.gov/ regs. The public hearing will be held in the Auditorium, Internal Revenue Building, 1111 Constitution Avenue, NW, Washington, DC.

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Tasheaya Warren, (202) 622–3860; concerning submissions and the hearing, LaNita Van Dyke, (202) 622–7180 (not tollfree numbers).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

The collection of information contained in this notice of proposed rulemaking has been submitted to the Office of Management and Budget for review in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)). Comments on the collection of information should be sent to the Office of Management and Budget, Attn: Desk Officer for the Department of the

Treasury, Office of Information and Regulatory Affairs, Washington, DC 20503, with copies to the Internal Revenue Service, Attn: IRS Reports Clearance Officer, W:CAR:MP:FP:S, Washington, DC 20224. Comments on the collection of information should be received by February 21, 2003. Comments are specifically requested concerning:

Whether the proposed collection of information is necessary for the proper performance of the functions of the Internal Revenue Service, including whether the information will have practical utility;

The accuracy of the estimated burden associated with the proposed collection of information (see below);

How the quality, utility, and clarity of the information to be collected may be enhanced;

How the burden of complying with the proposed collection of information may be minimized, including through the application of automated collection techniques or other forms of information technology; and

Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of service to provide information.

The collection of information in this regulation is in § 1.6038–3T. This information is required by the IRS to identify foreign partnerships which are controlled by United States persons and verify amounts reported by the partners. The collection of information is mandatory. The likely respondents will be individuals and business or other for-profit organizations.

The burden of complying with the collection of information required to be reported on Form 8865 is reflected in the burden for Form 8865. The estimated number of respondents is 5000. The estimated burden for the 2001 Form 8865 per respondent is 89 hours.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by the Office of Management and Budget.

Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.

2003–7 I.R.B. 489 February 18, 2003

trance area more than 30 minutes before the hearing starts. For information about having your name on the building access list to attend the hearing, see the For Further Information Contact portion of this preamble. The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who wish to present oral comments must submit written or electronic comments and an outline of the topics to be discussed and the time to be devoted to each topic (a signed original and eight (8) copies) by February 19, 2003. A period of 10 minutes will be allotted to each person for making comments. An agenda showing the scheduling of the speakers will be prepared after the deadline for receiving outlines has passed. Copies of the agenda will be available free of charge at the hearing.

Drafting Information

The principal author of this regulation is Tasheaya Warren, Office of the Associate Chief Counsel (International). However, other personnel from the IRS and Treasury Department participated in their development.

* * * * *

Proposed Amendments to the Regulations

Accordingly, 26 CFR part 1 is proposed to be 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 1.6038–3 is amended by revising paragraph (j) to read as follows:

§ 1.6038–3 Information returns required of certain United States persons with respect to controlled foreign partnerships (CFPs).

***** (j) [The text of the proposed amendment to § 1.6038–3(j) is the same as the text for § 1.6038–3T(j) published elsewhere in this issue of the Federal Regis- ter .]

* * * * *

Robert E. Wenzel, Deputy Commissioner

of Internal Revenue.

(Filed by the Office of the Federal Register on December 20, 2002, 8:45 a.m., and published in the issue of the Federal Register for December 23, 2002, 67 F.R. 78202)

Redemptions Taxable as Dividends; Correction

Announcement 2003–9

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 rulemaking and notice of public hearing (REG– 150313–01, 2002–44 I.R.B. 777) which was published in the Federal Register on Friday, October 18, 2002 (67 FR 64331). This regulation provides guidance regarding the treatment of the basis of redeemed stock when a distribution in redemption of such stock is treated as a dividend, as well as guidance regarding certain acquisitions of stock by related corporations that are treated as distributions in redemption of stock.

FOR FURTHER INFORMATION CONTACT: Lisa K. Leong at (202) 622–7530 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

The proposed regulations that are the subject of these corrections are under sections 302, 304, 704, 861, 1371, 1374, and 1502 of the Internal Revenue Code.

Need for Correction

As published, this notice of proposed rulemaking 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–150303–01, 2002–44 I.R.B. 777), which is the subject of FR. Doc. 02–26449, is corrected as follows:

1. On page 64332, column 1, in the preamble under the paragraph heading “Paperwork Reduction Act”, paragraph 7, line 12, the language “loss. The respondents are

shareholders”, is corrected to read “loss (or gain, as appropriate). The respondents are shareholders”.

§ 1.302–5 [Corrected]

2. On page 64339, column 1, § 1.302–5, paragraph (d)(8), line 4 from the bottom of the paragraph “accelerated inclusion date shall be made” is corrected to read “accelerated loss inclusion date shall be made”.

3. On page 64340, column 3, § 1.302–5, paragraph (f)(9), of Example 7, lines 6 and 7, the language “equal to PS’s basis in the corporation Z stock, ($50 after application of section 301(c)(2)), is”, is corrected to read “(equal to PS’s basis in the corporation Z stock, ($50 after application of section 301(c)(2)) is”.

§ 1.304–3 [Corrected]

4. On page 64342, column 3, § 1.304–3, paragraph (a), lines 21 through 24, the language “For the treatment of the redeemed shareholder’s basis in the redeemed stock in such cases, see § 1.302–5.” is removed.

Cynthia E. Grigsby, Chief, Regulations Unit, Associate Chief Counsel (Income Tax and Accounting).

(Filed by the Office of the Federal Register on December 24, 2002, 8:45 a.m., and published in the issue of the Federal Register for December 26, 2002, 67 F.R. 78761)

Foundations Status of Certain Organizations

Announcement 2003–10

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 foun

February 18, 2003 490 2003–7 I.R.B.

dations described in section 509(a) of the Code) are now classified as private foundations:

1st Class, Ridgefield, WA 360 Whitehall Housing Development Fund Corporation, Albany, NY Abundant Living Self-Investment

Associates Ministries, Inc., Little Rock, AR Access Laporte County, Michigan City, IN Access to Loans for Learning Finance

Corporation, Los Angeles, CA Access to Loans for Learning Student Credit

Career Access California, Inc.,

Vienna, VA Cherrie Williams Foundation, Gardena, CA Childcare International, Inc., Miami, FL Children of Peace, Inc., Buffalo, NY Christian Business & Consumer

Burlingame, CA Carolina Family Alliance, Spartanburg, SC Center for Advanced Transportation

Technologies, Monroeville, PA Center for Scientific Visualization, Ltd.,

New York, NY Center for Social Ministry, Berkeley, CA Charanjit Singh Batth Foundation,

Eagle Vision Society, Oklahoma City, OK Easley & Associates Christian Develop

ment, Inc., West Palm Beach, FL Eastbridge, Norwalk, CT Educational Video Foundation,

Silverton, OR Enable, Inc., Everett, PA Endangered Liberties Research Institute,

Caruthers, CA Chennai Educational Foundation, Inc.,

Washington, DC ESPA, Warrensville Hts., OH Eufaula-Barbour County Historic

Foundation, Eufaula, AL F. D. Thomas Educational & Enrichment

Center, Inc., Thomasville, NC Fire Island Wilderness Committee, Inc.,

Brookhaven, NY Fire Wind & Rain Ministries,

Corporation, Los Angeles, CA Acrosports Advocate, Detroit, MI Actions Community Development

Corporation, Houston, TX Acts Ministries, Stansbury Park, UT ADR Education Foundation, Inc.,

Philadelphia, PA African-American Advocacy Education and

Ministries Corporation, Fairhope, AL Christian Family, Greeley, CO Circuit Foundation, Brooklyn, NY Citizens for Buckeye Basin Parks, Inc.,

Toledo, OH Commanchees Retreat Organization,

Council Bluffs, IA Flame of Fire, Eastman, GA Foundation for Environmental Education

Training Consultant Group, Incorporated, Syracuse, NY African Immigrant Mission USA, Inc.,

Sorrento, FL Community Development Corporation of

LaFourche, Raceland, LA Community Resources Technology, Inc.,

Galion, OH Communities With Vision, Inc.,

Development, Reno, NV Freedom Institute, Springfield, MO FreshStart, Inc., Memphis, TN Friendly Village Mobilehome Park

West Orange, NJ African Universities Foundation, Inc.,

Olney, MD AHEC Foundation of Southwest

Oregon, Roseburg, OR Al-Bright Children Educational

Foundation Trust, San Rafael, CA All Helping Hands, Inc., Lake City, FL Allen Temple Neighborhood Development

Lexington, MA Community Revival Corporation,

Spring Valley, NY Communitys Jennie Dean Project,

Newton, MA Connecticut Spirit Association,

Corporation, Santa Ana, CA Friends in Friendship, Greensboro, NC Friends It Is, Sylmar, CA Full Harvest, Florissant, MO Fundacion Oftalmologica De La Pena,

Montebello, CA Fundamental Resources, Inc., Detroit, MI Garden Square North Development

Company, Pittsburgh, PA Get High on Life/Be D.E.A.R. to

Corporation, Inc., Riviera Beach, FL American Friends of the Vienna State

Manassas, VA Comprehensive Human Resources, Inc.,

Yourself, Inc., Huntington Beach, CA Gethsemane Garden Day Care Center,

Tiburon, CA Global Software Institute, Leverett, MA Go Ye Ministries, Inc., Alturas, FL Golden Bridge of Friendship

Opera, Beverly Hills, CA Anchor Bay Square Club,

New Baltimore, MI Antietam Skating Club, Frederick, MD Artists With Disabilities, Inc., Mahopac, NY Association for Bible Study, New York, NY Astrological Institute, Scottsdale, AZ Bayanihan Cultural Organization,

Woodbridge, CT Copernicus Foundation, Inc., Boston, MA Council International Study Programs, Inc.,

Memphis, TN Global Health Access Foundation,

New York, NY Council on Holistic Healing and

Organization, Inc., Suffern, NY Grady County Children & Youth

Hayward, CA Berthoud Baseball Association,

Recovery, Houston, TX Covenant Academy, Inc., Asheboro, NC Crusaders Community Development

Coordinating Council, Inc., Cairo, GA Graham-Kapowsin Community Council,

Spanaway, WA Green Mountain Wildlife Network,

Berthoud, CO Black Hispanics Educational Foundation,

Corporation, Philadelphia, PA David Merrick and Natalie Lloyd

Foundation, Inc., New York, NY Deep Waters Ministry, Inc.,

Port Washington, NY Deliverance Outreach Center,

Bronx, NY Bring Me a Book Foundation,

Middlesex, VT Haitian American Civic Center, Inc.,

Mountain View, CA Buffalo Women’s Amateur Soccer

Association, Ltd., Williamsville, NY Buttons & Bows Family Child

Development Center, Incorporated, Inkster, MI Canon McMillan Baseball Association,

New Haven, CT D.E.R.E.K. Program, Minneapolis, MN District 39 Educational Foundation,

Los Angeles, CA

Wilmette, IL Duplin County Agri-Community Center

Brooklyn, NY Hallmark Opportunities for Progressive

Education HOPE, Sebastapol, CA Hand In Hand We Can, Oakley, CA Hannah Project, Incorporated, Ocala, FL Health Beat, Inc., White Plains, NY Help One Another Club, Inc., Mequon, WI

Canonsburg, PA

Foundation, Kenansville, NC Each One Help One Teach One,

2003–7 I.R.B. 491 February 18, 2003

New World Impact Education, Corville, AZ Nick B. Della Foundation, Inc., Visalia, CA Ninth Street Mobilehome Park

Corporation, Santa Ana, CA Now Choose Life Ministries, Suprise, AZ NPF Enterprises, Las Vegas, NV Oceanography Research & Development,

Hispanic Franchise Foundation, Inc.,

Los Angeles, CA Holy Awakening Movement Global Love

Church, Burbank, CA Homestead Hill, Inc., North Adams, MA Hopeville Institution, San Antonio, TX Improving Education, Inc., Stamford, CT In-Touch Community Development, Inc.,

Libyan American Friendship Association,

Merrifield, VA LIFE Institute, Inc., Louisville, KY Lifequest Foundation, Saugus, CA Lift Corporation, Indianapolis, IN Light of Hope Community Development

Development, Corp., Chester Township, PA Livingston County Community

Foundation, Chillicothe, MO Los Angeles County Bomberos,

Southwick, MA Old Town Princeton Foundation, Inc.,

Fort Lauderdale, FL Indiana Federation of Families for

Corporation, Chester Township, PA Light of Hope Seniors Residence

Childrens Mental Health, Indianapolis, IN Indus Foundation, Sudbury, MA Innovation Research, San Leandro, CA Innovative Educational Design,

Foundation, Tallulah, LA M&S Kolel Grocery, Inc.,

Bluefield, WV Open Your Heart Fund, Inc., Flushing, NY Orangewood Mobilehome Park

Corporation, Santa Ana, CA Pacific Palms Mobilehome Park

Pullman, WA Institute for Sisters of Respect,

Clearwater, FL Institute for the Restoration of

Incorporated, Montebello, CA Louisiana Technical College-Tallulah

Corporation, Santa Ana, CA Pasadena Museum of Art, Pasadena, CA Personal Technology Institute, Inc.,

Antiquities, Inc., Teaneck, NJ Institutional Scholarship Foundation,

Spring Valley, NY Maes Family Day Care, Hawthorne, CA Marin County Chaplains Assoc.,

Rochester, NY Pet Emergency & Disaster Assistance, Inc.,

Lakewood, CA Prairie View A&M University Class of 1949

50th Year Endowed Scholarship Fund, Inc., Prairie View, TX Praise Him Ministries, North Easton, MA Prayer and Miracles, Inc., Detroit, MI Prep First American Resources & Services

Corporation, Tucson, AZ Pro-Visions for Life, Yuma, AZ Progressive Lakeside Golfers Associations,

Pittsburgh, PA Inter-Americas Research and Information

Center, Inc., Medford, OR Interlight Productions, Inc., Studio City, CA International Botanical Conservatory &

Gardens of New Jersey, Fair Lawn, NJ International Institute for Head and Neck

Cancer and Tobacco Related Diseases, Inc., New York, NY Janshee Educational Services, Inc.,

San Rafael, CA Marvellous Light Corporation, El Paso, TX Mazzei Foundation, Inc., Tulsa, OK Meals 4 U, Grosse Pointe Woods, MI Mecuda Foundation, Ltd.,

College Park, MD Mega Booster Club, Evansville, IN Metro Health California, Inc., Roswell, GA Mid America Arts Foundation,

Kansas City, KS Miracle Drummer and Dancers, Inc.,

Wasilla, AK Miriam House Children’s Residential Care

Facility, Houston, TX MIRTH, Inc., Pasadena, CA Mission Arlington, Inc., Arlington, TX Mission Connect, Houston, TX Monroe Meadows, Inc., Monroe, MI Mound Bayou Community Development

Inc., Shreveport, LA Project Reach, Inc., Houston, TX Pug Rescue of Southeast Texas,

Miami, FL Jesus Way, Staten Island, NY John A. Reisenbach Foundation,

New York, NY Joshua Foundation, Inc., Nashville, TN Just Kids of Sarasota, Inc., Sarasota, FL Kamaaina United to Protect the Aina,

Honaunau, HI Keep Lowndes-Valdosta Beautiful, Inc.,

Sugar Land, TX Quachita Regional Soccer Association,

Monroe, LA Ricky Edwards Ministries, Pawnee, OK Royal Knights Jr. Athletic Association,

St. Louis, MO Rural Community Development

Valdosta, GA Kids X-Pressions, Inc., Cumming, GA Kings Mission, Engelhard, NC Knowledge Initiative, Inc., Cabin John, MD Koftbrol, Inc., Bronx, NY KVMHC Housing, Inc., Waterville, ME Labor Council for Latin American Advancement-Rock, Janesville, WI Lafayette Elderly Housing Development

Corporation, Incorporated, Mound Bayou, MS Mr. & Mrs. Everett E. Brockett

Institute, Willow Street, PA National Training and Information

Scholarship Fund, Inc., Southampton, NY Nanocomputer Dream Team, Inc.,

San Antonio, TX National Cancer Research & Education

Corporation II, Carencro, LA LaFourche Schools Education

Foundation, Blacksburg, VA National Manufactured Home Owners

Corporation, Port Gibson, MS Russkaya Artists Group, Athens, OH Safeguarding America for Everyone (S.A.F.E.) Foundation, Inc., Upper Marlboro, MD Saint Paul Community Development

Corporation, Lake Helen, FL Salmon Recovery Forum, Inc., Bend, OR San Fernando Valley Philharmonic Pops

Orchestra, Inc., Woodland Hills, CA San Jose Community Center, San Jose, NM Save-A-Stray, Inc., Troutman, NC Second Chance Community Development,

Inc., Lauderhill, FL Second Chance Outreach Ministries, Inc.,

Foundation, Inc., Thibodaux, LA Lake Economic Development, Inc.,

Belle Glade, FL Largess, South Euclid, OH Landmark Development Enterprises,

Center, Sacramento, CA NCAL-Winston-Salem, Winston-Salem, NC Neighbors Helping Neighbors, Canton, OH Nevada Bar Foundation, Las Vegas, NV New Directions Treatment Center,

Danville, IL New Start Counseling Services, Peoria, AZ

Foundation, Inc., Boston, MA Silent Teens Organization, Canoga Park, CA

New Orleans, LA Lee House, Inc., Valley Falls, KS

Memphis, TN Sickle Cell Disease International

February 18, 2003 492 2003–7 I.R.B.

New York, NY Wings of Care Association, Auburn, WA Wish Come True Foundation, Inc.,

Sisterhood on the Move, Mattapan, MA Spirit Acres Daycamp Foundation,

Tippecanoe County Cooperative

Willow Career Institute, Inc.,

Hawthorne, CA

Riverton, CA Spring Valley Terrace, Inc., Tempe, AZ St. Marys Youth Baseball Association, Inc.,

St. Marys, PA Star of Christopher, Inc., Coon Rapids, MN Stone Institute for Challenged Adolescents,

Extension Board, Lafayette, IN Treatment Resources, Inc., Richmond, VA Trinity Educational Center, Inc.,

Covington, GA Tropicana Mobilehome Park Corporation,

Santa Ana, CA Troy Housing Development Corporation,

Troy, NC Tupelo Affordable Housing System,

Westerly, RI Women in Action, Inc., Southfield, MI Work Opportunity Resource Center,

Austin, TX Stonehenge Foundation, Incorporated,

Gladwyne, PA Stratford Housing Development Fund

Corporation, New York, NY Studio in the Hood, Inc., Carbondale, IL Summerdale Court, Inc., Pittsburgh, PA Teensafe, Inc., Hurley, NM Temple Foundation, Inc., White Plains, NY Temple of Knowledge, St. Louis, MO Tennessee Breakers Basketball Club,

Oak Ridge, TN Teresa Anne Eglet Galvin Scholarship Fund,

Tupelo, MS Union County Educational Foundation, Inc.,

Morganfield, KY Village Developers, Inc., Vineland, NJ Viridian, Bremerton, WA Walltown Community Association, Inc.,

Oakland, CA What’s Up Club, Houston, TX Wheeling Housing Authority Resident

Durham, NC We are the Clay, Sacramento, CA Westend Development Corporation,

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.

Inc., Basking Ridge, NJ

Council, Incorporated, Wheeling, WV

2003–7 I.R.B. 493 February 18, 2003