SECTION 7. AUDIT PROTECTION

If a family day care provider uses the Tier I rates to compute the deductible cost of food provided to eligible children in a taxable year that ends before January 1, 2003, the Service will not raise the issue of the amount of the family day care provider’s deductible food costs. If a family day care provider uses the Tier I rates to compute the deductible cost of food provided to eligible children in a taxable year that ends before January 1, 2003, and the amount of the family day care provider’s deductible food costs is an issue under consideration (within the meaning of section 3.09 of Rev. Proc. 2002–9, 2002–3 I.R.B.

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327. in examination, in appeals, or before the U.S. Tax Court in a taxable year that ends before January 1, 2003, that issue will not be further pursued by the Service.

DRAFTING INFORMATION

The principal author of this revenue procedure is Angella Warren of the Office of Associate Chief Counsel (Income Tax and Accounting). For further information regarding this revenue procedure, contact Ms. Warren at (202) 622–4950 (not a tollfree call).

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