SECTION 1. PURPOSE AND

NATURE OF CHANGES

.01 The purpose of this revenue procedure is to update Rev. Proc. 2003–3, 2003–1 C.B. 113, as amplified and modified by subsequent revenue procedures, by providing a revised list of those areas of the Internal Revenue Code under the jurisdiction of the Associate Chief Counsel (Corporate), the Associate Chief Counsel (Financial Institutions and Products), the Associate Chief Counsel (Income Tax and Accounting), the Associate Chief Counsel (Passthroughs and Special Industries), the Associate Chief Counsel (Procedure and Administration), and the Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities) relating to issues on which the Internal Revenue Service will not issue letter rulings or determination letters. For a list of areas under the jurisdiction of the Associate Chief Counsel (International) relating to international issues on which the Service will not issue letter rulings or determination letters, see Rev. Proc. 2004–7, this Bulletin. For a list of areas under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division relating to issues, plans or plan amendments on which the Service will not issue letter rulings and determination letters, see, respectively, section 8 of Rev. Proc. 2004–4, this Bulletin, and section 3.02 of Rev. Proc. 2004–6, this Bulletin.

.02 Changes.

(1) New section 3.0 1(4) (Section 83—Property Transferred In Connection with Performance of Services) has been added.

(2) Section 3.01(30) (Sections 332, 351, 368(a)(1)(A), (B), (C), (E) and (F), and 1036. Complete Liquidations of Subsidiaries; Transfer to Corporation Controlled by Transferor; Definitions Relating to Corporate Reorganizations; and Stock for Stock of Same Corporation) has been modified by deleting the last paragraph, which discussed the pilot program.

(3) Section 3.01(32) has been renamed: Section 3.01(32)—Section 358—Basis to Distributees.

(4) Section 3.01(38) (Section 457—Deferred Compensation Plans of State and Local Governments and Tax-Exempt Organizations) has been deleted.

(5) Section 4.01(30) (Section 355—Distribution of stock and securities of a controlled corporation) has been deleted.

(6) New sections 4.01(34) and (40) (Section 451—General Rule for Taxable Year of Inclusion; Sections 671 to 679—Grantors and Others Treated as Substantial Owners) have been added.

(7) Section 4.01(38) (Section 664—Charitable Remainder Trusts) has been modified.

(8) New section 4.01(51) (Section 2702—Special Valuation Rules in Case of Transfers of Interests in Trusts) has been added.

(9) Section 5.02 (Section 457—Deferred Compensation Plans of State and Local Governments and Tax-Exempt Organizations) has been deleted.

(10) New sections 5.02 and 5.03 (Section 451—General Rule for Taxable Year of Inclusion; Sections 671 to 679—Grantors and Others Treated as Substantial Owners) have been added.

(11) Section 6.01 has been added to reflect Rev. Proc. 2003–33, 2003–1 C.B. 803, which provides procedures that grant certain taxpayers an automatic extension of time under I.R.C. § 338 pursuant to Treas. Reg. § 301.9100–3.

(12) Section 6.01 has been renumbered as section 6.02 and revised to reflect updated procedures in Rev. Proc. 2003–34, 2003–1 C.B. 856; Rev. Proc. 2003–62, 2003–32 I.R.B. 299; and Rev. Proc. 2003–79, 2003–45 I.R.B. 1036.

(13) Section 6.02 has been renumbered as section 6.03 and revised to reflect updated procedures in Rev. Rul. 2003–3, 2003–1 C.B. 252; Rev. Proc. 2003–20, 2003–1 C.B. 445; Notice 2003–36, 2003–1 C.B. 992; Rev. Proc. 2003–45, 2003–27 I.R.B. 11; Rev. Proc. 2003–50, 2003–29 I.R.B. 119; Rev. Rul. 2003–54, 2003–1 C.B. 982; Notice 2003–59, 2003–35 I.R.B. 429; Rev. Proc. 2003–63, 2003–32 I.R.B. 304; Rev.

Sec. 1 January 5, 2004 114 2004-1 I.R.B.

sured medical expense reimbursement plan is discriminatory, that plan had previously made reasonable efforts to comply with tax anti-discrimination rules.

(8) Section 107. —Rental value of parsonages.—Whether amounts distributed to a retired minister from a pension or annuity plan should be excludible from the minister’s gross income as a parsonage allowance under § 107.

(9) Section 115. —Income of states, municipalities, etc.—Whether the results of transactions pursuant to a plan or arrangement created by state statute a primary objective of which is to enable participants to pay for the costs of a post-secondary education for themselves or a designated beneficiary, including: (i) whether the plan or arrangement, itself, is an entity separate from a state and, if so, how the plan or arrangement is treated for federal tax purposes; and (ii) whether any contract under the plan or arrangement is a debt instrument and, if so, how interest or original issue discount attributable to the contract is treated for federal tax purposes. (Also §§ 61, 163, 1275, 2501, and 7701.)

(10) Section 115. —Income of states, municipalities, etc.—Whether the income of membership organizations established by states exclusively to reimburse members for losses arising from workmen’s compensation claims is excluded from gross income under § 115.

(11) Section 117. —Qualified Scholarships.—Whether an employer-related scholarship or fellowship grant is excludible from the employee’s gross income, if there is no intermediary private foundation distributing the grants, as there was in Rev. Proc. 76–47, 1976–2 C.B. 670.

(12) Section 119. —Meals or Lodging Furnished for the Convenience of the Employer.—Whether the value of meals or lodging is excludible from gross income by an employee who is a controlling shareholder of the employer.

(13) Section 121 and former § 1034. —Exclusion of Gain from Sale of Principal Residence; Rollover of Gain on Sale of Principal Residence.—Whether property qualifies as the taxpayer’s principal residence.

(14) Section 125. —Cafeteria Plans.—Whether amounts used to provide group-term life insurance under § 79,

lished as they occur throughout the year and will be incorporated annually in a new revenue procedure published as the third revenue procedure of the year. These lists should not be considered all-inclusive. Decisions not to rule on individual cases (as contrasted with those that present significant pattern issues) are not reported in this revenue procedure and will not be added to subsequent revisions.

.02 Scope of Application. This revenue procedure does not preclude the submission of requests for technical advice to the applicable Associate Chief Counsel from other offices of the Service.

.03 No-Rule Issues Part of Larger Transactions.

If it is impossible for the Service to determine the tax consequences of a larger transaction without knowing the resolution of an issue on which the Service will not issue rulings and determinations under this revenue procedure involving a part of the transaction or a related transaction, the taxpayer must state in the request to the best of the taxpayer’s knowledge and belief the tax consequences of the no-rule issue. The Service’s ruling or determination letter will state that the Service did not consider, and no opinion is expressed upon, that issue. In appropriate cases the Service may decline to issue rulings or determinations on such larger transactions due to the relevance of the no-rule issue, despite the taxpayer’s representation.