Rev. Rul. 55-627

Income tax bonds, which have been executed under section 44(d) of the Internal Revenue Code of 1939 for the purpose of deferring gain to the recipient from Installment obligations transmitted at death, remain in full force and effect until fulfillment of the obligation under the bond. Under sections 453(d)(3) and 691(a)(4)(A) of the Internal Revenue Code of 1954, the counterpart of section 44(d) of the 1939 Code in this respect, the requirement of filing a bond by the recipient in such cases has been eliminated. Since those sections of the 1954 Code have no retroactive effect, no authority exists for release of a bond executed under section 44(d) of the 1939 Code. However, as the tax liability which may be asserted under a bond executed under section 44(d) of the 1939 Code decreases, requests may be made for approval of corresponding decreases in the amount of the bond at any time where a substantial reduction in the amount of installment obligations outstanding has been effected. Such a request should be submitted to the appropriate District Director of Internal Revenue with evidence indicating that the installment obligations transmitted at death have been substantially reduced and the gain realized upon the receipt of the payments thereon has been reported as income by the recipients