Part III. —Administrative, Procedural

and Miscellaneous 327

Notice of Proposed Rulemaking 463 Disbarments and Suspensions List 507 Summaries of Disciplinary Actions Taken by

the Director of Practice 510 Index 511

1995–2 C.B. i

The purpose of the Internal Revenue Service is to collect the proper amount of tax revenue at the least cost; serve the public by continually improving the

The function of the Internal Revenue Service is to administer the Internal Revenue Code. Tax policy for raising revenue is determined by Congress.

With this in mind, it is the duty of the Service to carry out that policy by correctly applying the laws enacted by Congress; to determine the reasonable meaning of various Code provisions in light of the Congressional purpose in enacting them; and to perform this work in a fair and impartial manner, with neither a government nor a taxpayer point of view.

At the heart of administration is interpretation of the Code. It is the responsibility of each person in the Service, charged with the duty of interpreting the law, to try to find the true meaning of the statutory provision and not to adopt a strained construction in the belief that he or she is ‘‘protecting the revenue.’’ The revenue is properly protected only when we ascertain and apply the true meaning of the statute.

These principles of tax administration were previously published in the Internal Revenue Bulletin as Revenue Procedure 64–22, 1964–1 (Part 1) C.B. 689. They are restated here to emphasize their importance to all employees of the Internal Revenue Service.

ii 1995–2 C.B.

quality of our products and services; and perform in a manner warranting the highest degree of public confidence in our integrity, efficiency and fairness.

The Service also has the responsibility of applying and administering the law in a reasonable, practical manner. Issues should only be raised by examining officers when they have merit, never arbitrarily or for trading purposes. At the same time, the examining officer should never hesitate to raise a meritorious issue. It is also important that care be exercised not to raise an issue or to ask a court to adopt a position inconsistent with an established Service position.

Administration should be both reasonable and vigorous. It should be conducted with as little delay as possible and with great courtesy and considerateness. It should never try to overreach, and should be reasonable within the bounds of law and sound administration. It should, however, be vigorous in requiring compliance with law and it should be relentless in its attack on unreal tax devices and fraud.

The Internal Revenue Bulletin is the authoritative instrument of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service and for publishing Treasury Decisions, Executive Orders, Tax Conventions, legislation, court decisions, and other items of general interest. It is published weekly and may be obtained from the Superintendent of Documents on a subscription basis. Bulletin contents of a permanent nature are consolidated semiannually into Cumulative Bulletins, which are sold on a single-copy basis.

It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application of the tax laws, including all rulings that supersede, revoke, modify, or amend any of those previously published in the Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of internal practices and procedures that affect the rights and duties of taxpayers are published.

Revenue rulings represent the conclusions of the Service on the application of the law to the pivotal facts stated in the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices, identifying details and information of a confidential nature are deleted to prevent unwarranted invasions of privacy and to comply with statutory requirements.

Rulings and procedures reported in the Bulletin do not have the force and effect of Treasury Department Regulations, but they may be used as precedents. Unpublished rulings will not be relied on, used, or cited as precedents by Service personnel in the disposition of

other cases. In applying published rulings and procedures, the effect of subsequent legislation, regulations, court decisions, rulings, and procedures must be considered, and Service personnel and others concerned are cautioned against reaching the same conclusions in other cases unless the facts and circumstances are substantially the same.

Cumulative Bulletin 1995–2 is a consolidation of all items of permanent nature published in the weekly Bulletins 1995–26 through 1995–52 for the period of July 1 through December 31, 1995.

The Internal Revenue Cumulative Bulletin is divided into four parts as follows:

Part I.—1986 Code. This part includes rulings and decisions based on provisions of the Internal Revenue Code of 1986.

Part II.—Treaties and Tax Legislation. This part is divided into two subparts as follows: Subpart A, Tax Conventions, and Subpart B, Legislation and Related Committee Reports.

Part III.—Administrative, Procedural, and Miscellaneous. To the extent practicable, pertinent cross references to these subjects are contained in the other Parts and Subparts. Also included in this part are Bank Secrecy Act Administrative Rulings. Bank Secrecy Act Administrative Rulings are issued by the Department of the Treasury’s Office of the Assistant Secretary (Enforcement).

Notice of Proposed Rulemaking. The preambles and text of proposed regulations that were published in the Federal Register during this six month period are printed in this section. Included in this section is a list of person disbarred or suspended from practice before the Internal Revenue Service.

1995–2 C.B. iii

Definition of Terms

Revenue rulings and revenue proce- dures (hereinafter referred to as ‘‘rul- ings’’) that have an effect on previous rulings use the following defined terms to describe the effect:

Amplified describes a situation where no change is being made in a prior published position, but the prior position is being extended to apply to a variation of the fact situation set forth therein. Thus, if an earlier ruling held that a principle applied to A, and the new ruling holds that the same principle also applies to B, the earlier ruling is amplified. (Compare with modified, below ).

Clarified is used in those instances where the language in a prior ruling is being made clear because the language has caused, or may cause, some confusion. It is not used where a position in a prior ruling is being changed.

Distinguished describes a situation where a ruling mentions a previously published ruling and points out an essential difference between them.

Modified is used where the substance of a previously published position is being changed. Thus, if a prior ruling held that a principle applied to A but not to B, and the new ruling holds that it applies to both A and B, the prior

Abbreviations

The following abbreviations in current use and formerly used will appear in material published in the Bulletin.

A— Individual. Acq.— Acquiescence. B— Individual. BE— Beneficiary. BK— Bank. B.T.A.— Board of Tax Appeals. C.— Individual. C.B.— Cumulative Bulletin. CFR— Code of Federal Regulations. CI— City. COOP— Cooperative. Ct.D.— Court Decision. CY— County. D— Decedent. DC— Dummy Corporation. DE— Donee. Del. Order— Delegation Order. DISC— Domestic International Sales Corporation. DR— Donor. E— Estate. EE— Employee.

iv 1995–2 C.B.

ruling is modified because it corrects a published position. (Compare with am- plified and clarified, above).

Obsoleted describes a previously published ruling that is not considered determinative with respect to future transactions. This term is most commonly used in a ruling that lists previously published rulings that are obsoleted because of changes in law or regulations. A ruling may also be obsoleted because the substance has been included in regulations subsequently adopted.

Revoked describes situations where the position in the previously published ruling is not correct and the correct position is being stated in the new ruling.

Superseded describes a situation where the new ruling does nothing more than restate the substance and situation of a previously published ruling (or rulings). Thus, the term is used to republish under the 1986 Code and regulations the same position published under the 1939 Code and regulations. The term is also used when it is desired to republish in a single ruling a series of situations, names, etc., that were previously published over a period of time in separate rulings. If

E.O.— Executive Order. ER— Employer. ERISA— Employee Retirement Income Security Act. EX— Executor. F— Fiduciary. FC— Foreign Country. FICA— Federal Insurance Contribution Act. FISC— Foreign International Sales Company. FPH— Foreign Personal Holding Company. F.R.— Federal Register. FUTA— Federal Unemployment Tax Act. FX— Foreign Corporation. G.C.M.— Chief Counsel’s Memorandum. GE— Grantee. GP— General Partner. GR— Grantor IC— Insurance Company. I.R.B.— Internal Revenue Bulletin. LE— Lessee. LP— Limited Partner. LR— Lessor. M— Minor. Nonacq.— Nonacquiescence. O— Organization. P— Parent Corporation.

the new ruling does more than restate the substance of a prior ruling, a combination of terms is used. For example, modified and superseded describes a situation where the substance of a previously published ruling is being changed in part and is continued without change in part and it is desired to restate the valid portion of the previously published ruling in a new ruling that is self contained. In this case the previously published ruling is first modified and then, as modified, is superseded.

Supplemented is used in situations in which a list, such as a list of the names of countries, is published in a ruling and that list is expanded by adding further names in subsequent rulings. After the original ruling has been supplemented several times, a new ruling may be published that includes the list in the original ruling and the additions, and supersedes all prior rulings in the series.

Suspended is used in rare situations to show that the previous published rulings will not be applied pending some future action such as the issuance of new or amended regulations, the outcome of cases in litigation, or the outcome of a Service study.

PHC— Personal Holding Company. PO— Possession of the U.S. PR— Partner. PRS— Partnership. PTE— Prohibited Transaction Exemption. Pub. L.— Public Law. REIT— Real Estate Investment Trust. Rev. Proc.— Revenue Procedure. Rev. Rul.— Revenue Ruling. S— Subsidiary. S.P.R.— Statements of Procedural Rules. Stat.— Statutes at Large. T— Target Corporation. T.C.— Tax Court. T.D.— Treasury Decision. TFE— Transferee. TFR— Transferor. T.I.R.— Technical Information Release. TP— Taxpayer. TR— Trust. TT— Trustee. U.S.C.— United States Code. X— Corporation. Y— Corporation. Z— Corporation.

Social Security Contributions & Benefit Base:

458

Treasury Decisions:

8597, 147 8598, 188 8599, 12 8600, 135 8601, 31 8602, 15 8603, 281 8604, 227 8605, 282 8606, 3 8607, 9 8608, 67 8609, 229 8610, 306 8611, 286 8612, 192 8613, 216 8614, 80 8615, 83 8616, 263 8617, 274 8618, 89 8619, 41 8620, 63 8621, 261 8622, 237 8623, 28 8624, 258 8625, 284 8626, 34 8627, 86 8628, 253 8629, 315

Treasury Department Directives:

15–42, 459 15–43, 459

Treasury Department Orders:

150–01, 460

1995–2 C.B. v

Numerical Finding List

Notices:

95–41, 328 95–42, 328 95–43, 328 95–44, 330 95–45, 330 95–46, 331 95–47, 331 95–48, 332 95–49, 332 95–50, 333 95–51, 333 95–52, 334 95–53, 334 95–54, 335 95–55, 336 95–56, 336 95–57, 337 95–58, 337 95–59, 338 95–60, 338 95–61, 339 95–62, 341 95–63, 342 95–64, 342 95–65, 342 95–66, 343 95–67, 343

Proposed Regulations:

CO–19–95, 464 CO–24–95, 466 CO–26–95, 466 EE–24–93, 468 IA–36–91, 470 IA–44–94, 471 IA–10–95, 478 IA–30–95, 479 INTL–75–92, 480 INTL–24–94, 485 PS–268–82, 491 PS–29–92, 497 PS–34–92, 494 PS–25–94, 502 PS–54–94, 503 PS–8–95, 506

Public Laws:

104–7, 325

Railroad Retirement Quarterly Rate:

227

Revenue Procedures:

95–29A, 343 95–30, 354 95–31, 378 95–32, 379 95–33, 380 95–34, 385

Revenue Procedures—Continued

95–35, 391 95–35A, 392 95–36, 393 95–37, 393 95–38, 397 95–39, 399 95–40, 402 95–41, 409 95–42, 411 95–43, 412 95–44, 412 95–45, 412 95–46, 414 95–47, 417 95–48, 418 95–49, 419 95–50, 430 95–51, 430 95–52, 439 95–53, 445 95–54, 450 95–55, 457

Revenue Rulings:

95–29A, 66 95–48, 125 95–49, 7 95–50, 71 95–51, 127 95–52, 27 95–53, 30 95–54, 6 95–55, 313 95–56, 322 95–57, 62 95–58, 191 95–59, 266 95–60, 78 95–61, 72 95–62, 129 95–63, 85 95–64, 7 95–65, 73 95–66, 11 95–67, 130 95–68, 272 95–69, 38 95–70, 124 95–71, 323 95–72, 74 95–73, 132 95–74, 36 95–75, 39 95–76, 75 95–77, 122 95–78, 269 95–79, 134 95–80, 79 95–81, 70 95–82, 76 95–83, 8

Finding List of Current Action on Previously Published Items

Revenue Procedures:

71–38 Obsoleted by 95–44, 412

72–15 Obsoleted by 95–44, 412

82–20 Obsoleted by 95–43, 412

82–59 Obsoleted by 95–44, 412

83–23 Supplemented by 95–48, 418

89–9 Modified by 95–34, 385

89–13 Modified by 95–34, 385 95–42, 411

90–55 Obsoleted by 95–45, 412

92–10 Clarified by 95–52, 439

92–16 Modified & Superseded by 95–52, 439

93–12 Modified by 95–34, 385

93–38 Supplemented by 95–31, 378

93–39 Modified by 95–34, 385

93–42 Modified by 95–34, 385

93–47 Modified by 95–34, 385

94–13 Modified by 95–34, 385

94–19 Superseded by 95–52, 439

vi 1995–2 C.B.

Revenue Procedures—Continued

94–35 Superseded by 95–30, 354

94–49 Modified by 95–33, 380

94–63 Superseded by 95–49, 419

94–66 Obsoleted in part by 95–32, 379

94–73 Superseded by 95–54, 450

95–3 Amplified by Notice 95–45, 330 95–50, 430

95–8 Modified by 95–34, 385

95–29 Modified and Amplified by 95–29A, 343

95–35 Modified in part by 95–35A, 392

Revenue Rulings:

54–171 Obsoleted by 95–71, 323

54–257 Obsoleted by 95–71, 323

56–171 Obsoleted by 95–71, 323

56–286 Obsoleted by 95–71, 323

57–243 Obsoleted by 95–71, 323

57–490 Obsoleted by 95–71, 323

58–9 Obsoleted by 95–71, 323

58–241 Obsoleted by 95–71, 323

58–391 Obsoleted by 95–71, 323

Revenue Rulings—Continued

63–125 Obsoleted by 95–71, 323

64–100 Obsoleted by 95–71, 323

64–239 Obsoleted by 95–71, 323

64–257 Obsoleted by 95–71, 323

65–30 Obsoleted by 95–71, 323

66–81 Obsoleted by 95–71, 323

66–306 Obsoleted by 95–71, 323

66–327 Obsoleted by 95–71, 323

67–269 Obsoleted by 95–71, 323

68–21 Obsoleted by 95–71, 323

68–294 Obsoleted by 95–71, 323

68–358 Obsoleted by 95–71, 323

68–457 Obsoleted by 95–71, 323

69–95 Obsoleted by 95–71, 323

69–172 Obsoleted by 95–71, 323

69–284 Obsoleted by 95–71, 323

70–467 Obsoleted by 95–71, 323

70–514 Obsoleted by 95–71, 323

Revenue Rulings—Continued

82–72 Obsoleted by 95–71, 323

82–113 Obsoleted by 95–71, 323

83–38 Obsoleted by 95–71, 323

84–152 Obsoleted by 95–56, 322

84–153 Obsoleted by 95–56, 322

85–125 Obsoleted by 95–71, 323

85–161 Obsoleted by 95–71, 323

85–163 Obsoleted by 95–56, 322

87–4 Obsoleted by 95–71, 323

87–89 Obsoleted in part by 95–56, 322

92–63 Modified and Superseded by 95–63, 85

92–84 Obsoleted by T.D. 8600, 135

93–88 Suspended by Notice 95–45, 330

95–35 Modified by 95–66, 338

1995–2 C.B. vii

Revenue Rulings—Continued

71–367 Obsoleted by 95–80, 79

71–522 Obsoleted by 95–71, 323

73–2 Obsoleted by 95–71, 323

73–264 Obsoleted by 95–71, 323

73–515 Obsoleted by 95–71, 323

73–551 Obsoleted by 95–71, 323

73–552 Obsoleted by 95–71, 323

73–611 Obsoleted by 95–71, 323

74–61 Obsoleted by 95–71, 323

74–119 Obsoleted by 95–71, 323

74–295 Obsoleted by 95–71, 323

74–430 Obsoleted by 95–71, 323

74–441 Obsoleted by 95–71, 323

74–522 Obsoleted by 95–71, 323

75–40 Obsoleted by 95–71, 323

75–240 Obsoleted by 95–71, 323

75–324 Obsoleted by 95–71, 323

75–460 Obsoleted by 95–71, 323

Revenue Rulings—Continued

75–508 Obsoleted by 95–71, 323

76–36 Obsoleted by 95–71, 323

77–190 Obsoleted by 95–71, 323

77–182 Modified by 95–58, 191

78–285 Obsoleted by 95–71, 323

78–350 Obsoleted by 95–71, 323

78–422 Obsoleted by 95–71, 323

79–3 Obsoleted by 95–71, 323

79–41 Clarified & Superseded by 95–53, 30

79–121 Obsoleted by 95–71, 323

79–149 Obsoleted by 95–71, 323

79–353 Revoked by 95–58, 191

79–376 Obsoleted by 95–71, 323

80–221 Obsoleted by 95–71, 323

81–51 Revoked by 95–58, 191

81–204 Obsoleted by 95–71, 323

81–218 Obsoleted by 95–71, 323

82–58 Obsoleted by 95–71, 323

Cumulative List of Actions Relating to Court Decisions Published in the Internal Revenue Bulletin from January 1, 1995 through December 31, 1995

It is the policy of the Internal Revenue Service to announce at an early date whether it will follow the holdings in certain cases. An Action on Decision is the document making such an announcement. An Action on Decision will be issued at the discretion of the Service only on unappealed issues decided adverse to the government. Generally, an Action on Decision is issued where its guidance would be helpful to Service personnel working with the same or similar issues. Unlike a Treasury Regulation or a Revenue Ruling, an Action on Decision is not an affirmative statement of Service position. It is not intended to serve as public guidance and may not be cited as precedent.

Actions on Decisions shall be relied upon within the Service only as conclusions applying the law to the facts in the particular case at the time the Action on Decision was issued. Caution should be exercised in extending the recommendation of the Action on Decision to similar cases where the facts are different. Moreover, the recommendation in the Action on Decision may be superseded by new legislation, regulations, rulings, cases, or Actions on Decisions.

Prior to 1991, the Service published acquiescence or nonacquiescence only in certain regular Tax Court opinions. The Service has expanded its acquiescence program to include other civil tax cases where guidance is determined to be helpful. Accordingly, the Service now

may acquiesce or nonacquiesce in the holdings of memorandum Tax Court opinions, as well as those of the United States District Courts, Claims Court, and Circuit Courts of Appeal. Regardless of the court deciding the case, the recommendation of any Action on Decision will be published in the Internal Revenue Bulletin.

The recommendation in every Action on Decision will be summarized as acquiescence, acquiescence in result only, or nonacquiescence. Both ‘‘acquiescence’’ and ‘‘acquiescence in result only’’ mean that the Service accepts the holding of the court in a case and that the Service will follow it in disposing of cases with the same controlling facts. However, ‘‘acquiescence’’ indicates neither approval nor disapproval of the reasons assigned by the court for its conclusions; whereas, ‘‘acquiescence in result only’’ indicates disagreement or concern with some or all of those reasons. Nonacquiescence signifies that, although no further review was sought, the Service does not agree with the holding of the court and, generally, will not follow the decision in disposing of cases involving other taxpayers. In reference to an opinion of a circuit court of appeals, a nonacquiescence indicates that the Service will not follow the holding on a nationwide basis. However, the Service will recognize the precedential impact of the opinion on cases arising within the venue of the deciding circuit.

The announcements published in

the weekly Internal Revenue Bulletins are consolidated semiannually and annually. The semiannual consolidation appears in the first Bulletin for July and in the Cumulative Bulletin for the first half of the year, and the annual consolidation appears in the first Bulletin for the following January and in the Cumulative Bulletin for the last half of the year.

The Commissioner ACQUIESCE in the following decisions:

Baker, Willard K. & Irene L., ¹ 748 F.2d 1465 (11th Cir. 1984) Kisling, Est. of, ² 32 F.3d 1222 (8th Cir. 1994) Louisiana Land & Exploration Co., ³ 102 T.C. 21 (1994) National Semiconductor Corp. & Con- solidated Subs. v. Commissioner, ⁴ T.C. Memo 1994–195 Seagate Technology, Inc. & Consoli- dated Subs., ⁵ 102 T.C. 149 (1994) Taisei Fire & Marine Inc. Co., Ltd., et al. v. Commissioner, ⁶ 104 T.C. 535 (1995) Trump Village v. Commissioner, ⁷ T.C. Memo 1995–281

The Commissioner does NOT ACQUIESCE in the following decisions: Louisiana Land & Exploration Co., ⁸ 90 T.C. 630 (1988) Louisiana Land & Exploration Co., ⁹ 102 T.C. 21 (1994) Milligan, Robert E., v. Commis- sioner, ¹⁰ 38 F.3d 1094 (9th Cir. 1994)

1Acquiescence relating to whether Rev. Rul. 80–173, 1980–2 C.B. 60, should be applied retroactively to disallow a section 162(a) deduction for flight training course expenses.

2Acquiescence relating to whether transfers of irrevocable fractional shares in a revocable trust to donees designated by decedent within the three-year period preceding the death of decedent are includible in decedent’s gross estate pursuant to sections 2035(d)(2) and 2038(a)(1) of the Code.

3Acquiescence in the issue relating to whether costs related to acquiring, transporting and installing gas processing equipment and the offshore modules that house such equipment are deductible as intangible drilling and development costs. Acquiescence in result in the issue relating to whether the Claus method used by plaintiff to recover elemental sulphur from hydrogen sulfide produced from an oil or gas well qualified as a mining process for percentage depletion purposes. Acquiescence ‘‘in result’’ means acceptance of the Court but disagreement with some or all the reasons assigned for the decision.

4Acquiescence in result relating to whether (i) prices paid by petitioner’s offshore Asian subsidiaries for silicon wafers manufactured by petitioner in the U.S., and incorporated by the former into electronic products, and (ii) the prices that petitioner paid the subsidiaries for the completed products were arm’s length. Acquiescence ‘‘in result’’ means acceptance of the Court but disagreement with some or all the reasons assigned for the decision.

5Acquiescence in result relating to whether certain royalties attributable to intangibles that petitioner transferred to its wholly-owned subsidiary, and the prices that petitioner paid the subsidiary for products manufactured by the latter, were arm’s length. Acquiescence ‘‘in result’’ means acceptance of the Court but disagreement with some or all the reasons assigned for the decision.

1995–2 C.B. 1

Cumulative List of Actions Relating to Court Decisions Published in the Internal Revenue Bulletin from January 1, 1995 through December 31, 1995—Continued

sioner, ¹⁵ 994 F.2d 432 (8th Cir. 1993) Vulcan Materials Co. & Subsidiaries v. Commissioner, ¹⁶ 959 F.2d 973 (11th Cir. 1992)

Morganbesser, Marvin D., et al. v. U.S., ¹¹ 984 F.2d 560 (2d Cir. 1993) Placid Oil Co. v. IRS, ¹² 988 F.2d 554 (5th Cir. 1993) St. Jude Medical, Inc. v. Commis-

sioner, ¹³ 97 T.C. 457 (1991) (8th Cir. 1994) Sealy Power Ltd., ¹⁴ 46 F.3d 382 (5th Cir. 1995) Security Bank Minnesota v. Commis-

6Acquiescence relating to whether four Japanese reinsurance companies have agency permanent establishments in the U.S. because their U.S. agent was not ‘‘an agent of independent status’’ under Article 9(5) of the U.S.-Japan Tax Treaty.

7Acquiescence relating to whether the limitations of section 277 apply to a cooperative housing corporation described in section 216, which is also subject to the provisions of subchapter T of the Code.

8Nonacquiescence relating to whether section 613A(e)(2) of the Code eliminates percentage depletion under section 613 for nonhydrocarbon minerals produced from an oil or gas well.

9Nonacquiescence relating to whether all income from the sales of oil, gas and sulphur are to be combined when calculating the taxable income from the property under section 613(a) of the Code, even though the oil and gas income is subject to a separate depletion regimen.

10Nonacquiescence realting to whether payments to a former insurance agent, which are based on the amount of compensation during the last twelve months as an agent, derive from a trade or business carried on by the individual, so as to be subject to tax under the Self-Employment Contributions Act (SECA).

11Nonacquiescence relating to whether the Second Circuit Court of Appeals, in affirming the U.S. District Court for Connecticut, erred as a matter of law in determining that a multiemployer pension trust was a labor organization exempt under section 501(c)(5) of the Code.

12Nonacquiescence relating to whether the U.S. or the taxpayer bears the ultimate burden of proof in bankruptcy proceedings in which the taxpayer challenges a federal income tax claim arising from the disallowance ofdeductions.

13Nonacquiescence relating to whether section 1.861–8(e)(3) of the regulations is invalid as applied to DISC combined taxable income calculations.

14Nonacquiescence relating to whether an electrical generating facility that produced only de minimis amounts of electricity on a sporadic basis in 1984 due to functional deficiencies in its equipment ‘‘placed in service’’ was within the meaning of sections 46 and 167 of the Code.

15Nonacquiescence relating to whether a cash method bank that makes short-term loans with a stated interest rate to customers in the ordinary course of its business is subject to accrual of the interest on those loans under section 1281(a)(2) of the Code.

16Nonacquiescence relating to whether the term ‘‘accumulated profits’’ as used in the denominator of the section 902 deemed paid credit fraction before the Tax Reform Act of 1986 means all of the foreign corporation’s accumulated profits for the taxable year.

2 1995–2 C.B.