SECTION 3. AREAS IN WHICH

RULING OR DETERMINATION LETTERS WILL NOT BE ISSUED

.01 Specific Questions and Problems (1) Section 871(g). - Special Rules for Original Issue Discount. - Whether a debt instrument having original issue discount within the meaning of § 1273 is not an original issue discount obligation within the meaning of § 871(g)(1)(B)(i) when the instrument is payable 183 days or less from the date of original issue (without regard to the period held by the taxpayer).

(2) Section 894. - Income Affected by Treaty. - Whether a person that is a resident of a foreign country and derives income from the United States is entitled to benefits under the United States income tax treaty with that foreign country pursuant to the limitation on benefits article. However, the Service may rule regarding the legal interpretation of a particular provision within the relevant limitation on benefits article.

(3) Section 954. - Foreign Base Company Income. - The effective rate of tax that a foreign country will impose on income.

(4) Section 1503(d). - Dual Consolidated Loss. - Whether the conditions under the regulations for excepting a net operating loss of a dual resident corporation from the definition of a dual consolidated

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as fiscally transparent by a foreign jurisdiction for purposes of § 894(c) and the regulations thereunder.

(15) Section 901. - Taxes of Foreign Countries and of Possessions of United States. - Whether a foreign levy meets the requirements of a creditable tax under § 901.

(16) Section 901. - Taxes of Foreign Countries and of Possessions of United States. - Whether a person claiming a credit has established, based on all of the relevant facts and circumstances, the amount (if any) paid by a dual capacity taxpayer under a qualifying levy that is not paid in exchange for a specific economic benefit. See § 1.901–2A(c)(2).

(17) Section 903. - Credit for Taxes in Lieu of Income, Etc., Taxes. - Whether a foreign levy meets the requirements of a creditable tax under § 903.

(18) Sections 927(a)(Repealed), 936(h)(5), 943(a), 954(d), 993(c). Manufactured Product. - Whether a product is manufactured or produced for purposes of § 927(a), § 936(h)(5), § 943(a), § 954(d), and § 993(c).

(19) Section 936. - Puerto Rico and Possession Tax Credit. - What constitutes a substantial line of business.

(20) Section 956. - Investment of Earnings in United States Property. Whether a pledge of the stock of a controlled foreign corporation is an indirect pledge of the assets of that corporation. See § 1.956–2(c)(2).

(21) Section 985. - Functional Currency. - Whether a currency is the functional currency of a qualified business unit.

(22) Section 989(a). - Qualified Business Unit. - Whether a unit of the taxpayer’s trade or business is a qualified business unit.

(23) Section 1058. - Transfers of Securities under Certain Agreements. Whether the amount of any payment described in § 1058(b)(2) or the amount of any other payment made in connection with a transfer of securities described in § 1058 is from sources within or without the United States; the character of such amounts; and whether the amounts constitute a particular kind of income for purposes of any United States income tax treaty.

(24) Section 1503(d). - Dual Consolidated Loss. - Whether an event presumptively constitutes a triggering event for pur

use in the active conduct of a trade or business for purposes of § 367(a)(3); and whether any other property is so transferred, where the determination requires extensive factual inquiry.

(2) Section 367(b). - Other Transfers. - Whether a foreign corporation is considered a corporation for purposes of any nonrecognition provision listed in § 367(b), and related issues, unless the ruling presents a significant legal issue or subchapter C rulings are requested in the context of reorganizations or liquidations involving foreign corporations.

(3) Section 864. - Definitions and Special Rules. - Whether a taxpayer is engaged in a trade or business within the United States, and whether income is effectively connected with the conduct of a trade or business within the United States; whether an instrument is a security as defined in § 1.864–2(c)(2); whether a taxpayer effects transactions in the United States in stocks or securities under § 1.864–2(c)(2); whether an instrument or item is a commodity as defined in § 1.864–2(d)(3); and for purposes of § 1.864–2(d)(1) and (2), whether a commodity is of a kind customarily dealt in on an organized commodity exchange, and whether a transaction is of a kind customarily consummated at such place.

(4) Section 871. - Tax on Nonresident Alien Individuals. - Whether the income earned on contracts that do not qualify as annuities or life insurance contracts because of the limitations imposed by § 72(s) and § 7702(a) is portfolio interest as defined in § 871(h).

(5) Section 881. - Tax on Income of Foreign Corporations Not Connected with United States Business. - Whether the income earned on contracts that do not qualify as annuities or life insurance contracts because of the limitations imposed by § 72(s) and § 7702(a) is portfolio interest as defined in § 881(c).

(6) Section 892. - Income of Foreign Governments and of International Organizations. - Whether income derived by foreign governments and international organizations from sources within the United States is excluded from gross income and exempt from taxation.

(7) Section 893. - Compensation of Employees of Foreign Governments and International Organizations. - Whether wages, fees, or salary of an employee of a

foreign government or of an international organization received as compensation for official services to such government or international organization is excluded from gross income and exempt from taxation.

(8) Section 894. - Income Affected by Treaty. - Whether a taxpayer has a permanent establishment in the United States for purposes of any United States income tax treaty and whether income is attributable to a permanent establishment in the United States.

(9) Section 894. - Income Affected by Treaty. - Whether certain persons will be considered liable to tax under the laws of a foreign country for purposes of determining if such persons are residents within the meaning of any United States income tax treaty. But see Rev. Rul. 2000–59, 2000–2 C.B.593.

(10) Section 894. - Income Affected by Treaty. - Whether the income received by a nonresident alien student or trainee for services performed for a university or other educational institution is exempt from federal income tax or withholding under any of the United States income tax treaties which contain provisions applicable to such nonresident alien students or trainees.

(11) Section 894. - Income Affected by Treaty. - Whether the income received by a nonresident alien performing research or teaching as personal services for a university, hospital or other research institution is exempt from federal income tax or withholding under any of the United States income tax treaties which contain provisions applicable to such nonresident alien teachers or researchers.

(12) Section 894. - Income Affected by Treaty. - Whether a foreign recipient of payments made by a United States person is ineligible to receive the benefits of a United States tax treaty under the principles of Rev. Rul. 89–110, 1989–2 C.B. 275. (13) Section 894. - Income Affected by Treaty. - Whether a recipient of payments is or has been a resident of a country for purposes of any United States tax treaty. Pursuant to § 1.884–5(f), however, the Service may rule whether a corporation representing that it is a resident of a country is a qualified resident thereof for purposes of § 884.

(14) Section 894. - Income Affected by Treaty. - Whether an entity is treated

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eign document means making a judgment about the import or effect of the foreign law or document that goes beyond its plain meaning.

(b) The Service, at its discretion, may consider rulings that involve the interpretation of foreign laws or foreign documents. In these cases, the Service may request information in addition to that listed in sections 7.01(2)(b) and (c) of Revenue Procedure 2004–1, including a discussion of the implications of any authority believed to interpret the foreign law or foreign document, such as pending legislation, treaties, court decisions, notices or administrative decisions.