SERVICE WILL NOT ISSUE ADVANCE RULINGS UNDER SECTIONS 871(g)(1)(B) AND 956(b)(1)(C)

Rev. Proc. 85-59

SECTION 1. BACKGROUND

Rev. Proc. 85-22, 1985-1 C.B. 550, sets forth areas in which advance rulings or determination letters will not be issued by the Internal Revenue Service. Section 3 of Rev. Proc. 85-22 is entitled "Areas in Which Rulings Or Determination Letters Will Not Be Issued."

SEC. 2. PROCEDURE

Rev. Proc. 85-22 is hereby amplified by adding to section 3.01 the following two new sections:

(1) Section 871(g)(1)(B). -- Original Issue Discount Obligations. -- Whether a debt instrument having original issue discount within the meaning of section 1273 is an original issue discount obligation within the meaning of section 871(g)(12)(B)(i) when the instrument is payable 183 days or less from the date of original issue (without regard to the period held by the taxpayer) and such debt instrument is issued by a domestic corporation and is purchased by its controlled foreign corporation.

(2) Section 956(b)(1)(C). -- United States Property Defined. -- Whether an indebtedness is excludable from the definition of the term "obligation" under section 1.956-2(d)(2)(ii) of the regulations because the indebtedness is collected within one year from the time it is incurred or matures within one year from the time it is incurred but it is not collected within such period solely by reason of the inability or unwillingness of the debtor to make payment within such period.

SEC. 3. PURPOSE

These two sections are being added to Rev. Proc. 85-22 because, to the extent the answers to the issues are not clear as a matter of law, they are too dependent on subsequent facts for the Service to determine in advance the substance of the transactions.

SEC. 4. EFFECTIVE DATE

This revenue procedure will apply to all ruling requests on hand in the National Office on December 16, 1985, the date of publication of this revenue procedure in the Internal Revenue Bulletin, as well as to requests received thereafter.

SEC. 5. EFFECT ON OTHER REVENUE PROCEDURES

Rev. Proc. 85-22 is amplified.