SECTION 1. Purpose.

In order to provide greater administrative certainty in a major short-term sector of the tax-exempt bond market in response to taxpayer requests and to promote stability in this sector of the market, the Treasury Department and the Internal Revenue Service (“IRS”) propose to issue a revenue procedure substantially in the form included in section 5 of this notice. The proposed revenue procedure would modify and supersede Rev. Proc. 2003–84, 2003–2 C.B. 1159. The proposed revenue procedure would provide certain more specific eligibility criteria that partnerships that invest in tax-exempt bonds must meet to qualify for monthly closing elections to allow the partners to

take into account monthly the inclusions required under §§ 702 and 707(c) of the Internal Revenue Code of 1986, as amended (the “Code”). The Treasury Department and the IRS are issuing this guidance in proposed form to afford an opportunity for public comment and to limit any potential impact on the current market.