SECTION 1. PURPOSE

Proposed § 1.83–3(l) of the Income Tax Regulations allows taxpayers to elect to apply special rules (the Safe Harbor) to a partnership’s transfers of interests in the partnership in connection with the performance of services for the partnership. The Treasury Department and the Internal Revenue Service intend for the Safe Harbor to simplify the application of § 83 of the Internal Revenue Code to partnership interests transferred in connection with the performance of services and to coordinate the principles of § 83 with the principles of partnership taxation. This revenue procedure sets forth additional rules for the elective safe harbor under proposed § 1.83–3(l) for a partnership’s transfer of interests in the partnership in connection with the performance of services for that partnership.