SERVICE OPENS LIMITED ESTATE TAX AREAS TO REQUESTS FOR ADVANCE RULINGS.

Rev. Proc. 87-58

SECTION 1. PURPOSE

The purpose of this revenue procedure is to announce a test of the feasibility of issuing audience rulings on estate tax issues and to modify Rev. Proc. 87-1, 1987-1 I.R.B. 7, and Rev. Proc. 87-3, 1987-1 I.R.B. 27. Rev. Proc. 87-1 provides procedures for issuing letter rulings involving the interpretation or application of the federal tax laws within the jurisdiction of the Corporation Tax Division and the Individual Tax Division in the Office of the Associate Chief Counsel (Technical and International). Rev. Proc. 87- 3 provides a list of the areas of federal tax law within the jurisdiction of those divisions in which advance rulings will not be issued. Both revenue procedures state that the Service will not issue rulings with respect to the prospective application of the estate tax laws to the property or the estate of a living person.

This modification provides for the processing and issuance of advance estate tax rulings by the Individual Tax Division. During the period of the modification, advance estate tax rulings will be issued, subject to the limitations described below, to an individual (or to the individual's authorized representative). The modification is being instituted to test the feasibility of issuing advance estate tax rulings as a means of providing enhanced service to the public.

SEC. 2. SCOPE AND DURATION

01 The modification will be effective for ruling requests received after October 26, 1987, that meet the requirements set forth in section 8 (Instructions to Taxpayer) of Rev. Proc. 87-1.

02 This modification is effective only for those estate tax ruling requests coming within the primary jurisdiction of the Individual Tax Division. This modification is not effective for determination letters issued by District Directors.

03 This revenue procedure will remain in effect until October 26, 1988.

SEC 3. TEMPORARY MODIFICATION

01 Section 5.02 of Rev. Proc. 87-1 and section 3.023 of Rev. Proc. 87-3 state that the Service will not issue rulings on matters relating to the application of the estate tax law to property or the estate of a living person. Those sections are modified during the test period so that advance estate tax rulings may be issued.

02 Advance rulings will be issued only if there is an executed will, trust instrument, deed of conveyance, or contract or if the individual on whose behalf the ruling is requested states in writing, under penalty of perjury, that such individual has a present intention to execute the will, trust instrument, deed of conveyance, or contract. A copy of such executed or proposed document must be included in the request. With respect to issues arising under such documents, prospective rulings will be issued only in the following areas:

1. Section 2041. Whether a power of disposition over property is a general power of appointment.

2. Section 2056. Whether an interest in property is a terminable interest (including Qualified Terminable Interest Property).

3. Section 2056. Whether a governing document provides a surviving spouse with a general power of appointment over trust property.

03 Areas in which advance estate tax rulings will not be issued include:

1. Computations of the tax.

2. Actuarial factors.

3. Factual matters, such as determining the fair market value of property.

4. Any area covered by a prohibition against ruling in Rev. Proc. 87-1 or Rev. Proc. 87-3, except as provided in section 3.01, above.