SEC. 7. REVOCATION OF § 936(a)

ELECTIONS AND CHANGE IN § 936(h) METHODS IN POST-1993 YEARS

.01 Generally, an election under § 936(a) may be revoked during the first ten years of § 936 status only with the consent of the Commissioner. However, § 936(a) revocations for post-1993 tax years must be considered in light of the significant statutory changes made by OBRA. Accordingly, the Commissioner hereby consents to all requests for revocation that are made with respect to a possessions corporation’s first taxable year beginning after December 31, 1993 provided that the § 936(a) election was in effect

for the last taxable year beginning before January 1, 1994 and provided that the corporation agrees not to reelect § 936(a) prior to its first taxable year beginning after December 31, 1998. .02 A possessions corporation that wishes to revoke a § 936(a) election under the terms of the blanket revocation provided by § 7.01 must attach a ‘‘Statement of Revocation—§ 936’’ to its timely filed return (including extensions) and must state that, in revoking the election, the corporation agrees not to re-elect § 936(a) prior to its first taxable year beginning after December 31, 1998. .03 A possessions corporation may not change its method under § 936(h)(5) or adopt the method under §§ 936(h)(1) to (h)(3) due to the changes made by § 936(a)(4) without the consent of the Commissioner. The possessions corporation must demonstrate to the Commissioner that, unless consent to a change in method is granted, its current use of a foregoing method would be adversely affected by the changes under OBRA.