Rev. Proc. 84-22

SECTION 1. PURPOSE AND NATURE OF CHANGES

.01 The purpose of this revenue procedure is to update Rev. Proc. 83-22, 1983-1 C.B. 680, as amplified and modified by subsequent revenue procedures, by providing a revised list of those areas of the Internal Revenue Code under the jurisdiction of the Associate Chief Counsel (Technical) in which the Internal Revenue Service will not issue advance rulings or determination letters.

.02 Changes

1 New section 3.011 refers to section 61. See Rev. Proc. 84-14, 1984-9 I.R.B. 15.

2 New section 3.019 refers to section 163. See Rev. Proc. 83-31, 1983-1 C.B. 722.

3 New section 3.0131 refers to section 641. See Rev. Proc. 83-61, 1983-34 I.R.B. 30.

4 New section 3.0135 refers to section 801. See Rev. Proc. 84-15, 1984-9 I.R.B. 15.

5 New section 3.0145 refers to section 7701. See Rev. Proc. 83-50, 1983-27 I.R.B. 142.

6 New section 4.011 refers to sections 38, 46, and 48. See Rev. Proc. 84-8, 1984-6 I.R.B. 12.

7 New section 4.012 refers to section 61. See Rev. Proc. 83-55, 1983-30 I.R.B. 22.

8 New section 4.015 refers to section 103. See Rev. Proc. 84-13, 1984-9 I.R.B. 13.

9 New section 4.018 referse to sections 167 and 168. See Rev. Proc. 84-8, 1984-6 I.R.B. 12.

10 New section 4.0115, which refers to section 341, supersedes old section 4.0111. See Rev. Proc. 83-85, 1983-49 I.R.B. 18.

11 New section 4.0118 refers to section 864. See Rev. Proc. 84-12, 1984-9 I.R.B. 15.

12 New section 4.0120 refers to section 894. See Rev. Proc. 84-12, 1984-9 I.R.B. 15.

13 New section 4.0121 refers to section 901. See Rev. Proc. 84-12, 1984-9 I.R.B. 15.

14 New section 4.024 refers to a transaction affected by pending litigation among the parties to the transaction. See Rev. Proc. 83-75, 1983-41 I.R.B. 17.

15 New section 5.02 refers to sections 61 and 162. See Rev. Proc. 83-62, 1983-35 I.R.B. 14.

16 New section 5.05 refers to section 101. See Rev. Proc. 83-45, 1983-1 C.B. 780.

17 New section 5.06 refers to section 103. See Rev. Proc. 83-64, 1983-36 I.R.B. 14.

18 Old section 5.08 has been deleted. See Rev. Proc. 83-42, 1983-1 C.B. 778.

19 New section 5.11 refers to section 306(b)(4). See Rev. Proc. 83-82, 1983-46 I.R.B. 32.

20 New section 5.12 refers to section 334(b)(2). See Rev. Proc. 83-57, 1983-31 I.R.B. 11.

21 New section 5.13 refers to section 336. See Rev. Proc. 83-57, 1983-31 I.R.B. 11.

22 New section 5.14 refers to section 338. See Rev. Proc. 83-57, 1983-31 I.R.B. 11.

23 New section 5.19 refers to section 368. See Rev. Proc. 83-53, 1983-28 I.R.B. 38.

24 New section 5.24 refers to sections 708 and 741. See Rev. Proc. 83-39, 1983-1 C.B. 774.

25 New section 5.26 refers to section 801(b). See Rev. Proc. 83-57, 1983-31 I.R.B. 11.

26 New section 5.27 refers to section 802(b)(3). See Rev. Proc. 83-57, 1983-31 I.R.B. 11.

27 New section 5.28 refers to section 809(d)(11). See Rev. Proc. 83-57, 1983-31 I.R.B. 11.

28 New section 5.29 refers to section 815(d)(2). See Rev. Proc. 83-57, 1983-31 I.R.B. 11.

29 New section 5.30 refers to section 817. See Rev. Proc. 83-57, 1983-31 I.R.B. 11.

30 New section 5.31 refers to section 818(b)(3). See Rev. Proc. 83-57, 1983-31 I.R.B. 11.

31 Old section 5.18 has been deleted. See Rev. Proc. 83-60, 1983-33 I.R.B. 16.

32 Old section 5.19 has been deleted. See Rev. Proc. 84-21, 1984-12 I.R.B. 11.

33 New section 5.32 refers to section 1248. See Rev. Proc. 83-82, 1983-46 I.R.B. 32.

34 Old section 5.23 has been deleted. See Rev. Proc. 83-67, 1983-37 I.R.B. 16.

35 New section 5.39 refers to section 7701. See Rev. Proc. 83-52, 1983-29 I.R.B. 62.

36 Old section 6.01 has been deleted. See Rev. Proc. 84-14, 1984-9 I.R.B. 15.

37 The amplification made by Rev. Proc. 83-80, 1983-44 I.R.B. 22, does not appear in this document because the prohibition contained in Pub.L. 98-63, 1983-51 I.R.B. 14, as extended by Pub.L. 98-107, has expired.

38 Section 6 has been deleted because there are no areas now for which the Service is prohibited by statute from issuing rulings or determination letters.

SEC. 2. BACKGROUND AND SCOPE OF APPLICATION

.01 Background.

Whenever appropriate in the interest of sound tax administration, it is the policy of the Service to answer inquiries of individuals and organizations regarding their status for tax purposes and the tax effects of their acts or transactions, prior to the filing of returns or reports that are required by the revenue laws.

There are, however, certain areas in which, because of the inherently factual nature of the problems involved, or for other reasons, the Service will not issue advance rulings or determination letters. These areas are set forth in three sections of this revenue procedure. Section 3 reflects those areas in which advance rulings and determinations will not be issued. Section 4 sets forth those areas in which they will not ordinarily be issued. "Not ordinarily" connotes that unique and compelling reasons must be demonstrated to justify a ruling or determination letter. Those sections reflect a number of specific questions and problems as well as general areas. Section 5 lists specific areas for which the Service is temporarily not issuing advance rulings and determinations because those matters are under extensive study.

With respect to the items listed, revenue rulings or revenue procedures may be published in the Internal Revenue Bulletin from time to time to provide general guidelines regarding the position of the Service.

Additions or deletions to this revenue procedure as well as restatement of items listed will be made by modification of this revenue procedure. Changes will be published as they occur throughout the year and will be incorporated annually in a new revenue procedure published in the first quarter of the next calendar year. These lists should not be considered all inclusive. Decisions not to rule on individual cases, as contrasted with those that present significant pattern issues, are not reported in this revenue procedure and will not be added to subsequent revisions.

The authority and general procedures of the Technical Function of the National Office of the Internal Revenue Service or the Offices of the District Directors of the Internal Revenue with respect to the issuance of advance rulings and determination letters with respect to Code sections under the jurisdiction of the Associate Chief Counsel (Technical) are outlined in Rev. Proc. 84-1, 1984-1 I.R.B. 10.

.02 Scope of Application.

This revenue procedure is not to be considered as precluding the submission of requests for technical advice to the National Office from the Office of a District Director of the Internal Revenue or a Chief, Appeals Office.

SEC. 3. AREAS IN WHICH RULINGS OR DETERMINATION LETTERS WILL NOT BE ISSUED

.01 Specific questions and problems.

1 Section 61.-Gross Income Defined.-Before January 1, 1985, a matter involving the federal income tax treatment of nonstatutory employee fringe benefits.

2 Section 79.-Group-Term Life Insurance Purchased for Employees.-Whether a group insurance plan for 10 or more employees qualifies as group-term insurance if the amount of insurance is not computed under a formula that would meet the requirements of section 1.79-1(c)(2)(ii) if the group consisted of fewer than 10 employees.

3 Section 83-Property Transferred in Connection with Performance of Services.-Whether a restriction constitutes a substantial risk of forfeiture if the employee is a controlling shareholder. Also, whether a transfer has occurred if the amount paid for a purported transfer of property involves a nonrecourse obligation.

4 Section 105(h).-Amount Paid to Highly Compensated Individuals under a Discriminatory Self-Insured Medical Expense Reimbursement Plan.-Whether, following a determination that a self-insured medical expense reimbursement plan is discriminatory, that plan had previously made reasonable efforts to comply with tax discrimination rules.

5 Section 117.-Scholarships and Fellowship Grants.-Whether an employer-related scholarship or fellowship grant is excludable from the employee's gross income if there is no intermediary private foundation distributing the grants, as there was in Rev. Proc. 76-47, 1976-2 C.B. 670.

6 Section 119.-Meals or Lodging Furnished for the Convenience of the Employer.-Whether the value of meals or lodging is excludable from gross income by an employee who is a controlling shareholder of the employer.

7 Sections 121 and 1034.-One-Time Exclusion of Gain from Sale of Principal Residence by Individual Who Has Attained Age 55; Rollover of Gain on Sale of Principal Residence.-Whether property qualifies as the taxpayer's principal residence.

8 Section 162.-Trade or Business Expenses.-Whether compensation is reasonable in amount.

9 Section 163.-Interest.-The income tax consequences of transactions involving "shared appreciation mortgage" (SAM) loans in which a taxpayer, borrowing money to purchase real property, pays a fixed rate of interest on the mortgage loan below the prevailing market rate and will also pay the lender a percentage of the appreciation in value of the real property upon termination of the mortgage. This applies to all SAM arrangements where the loan proceeds are used for commercial or business activities, or where used to finance a personal residence if the facts are not similar to those described in Rev. Rul. 83-51, 1983-1 C.B. 48. (Also sections 61, 451, 461, 856, 1001, and 7701).

10 Section 170.-Charitable, Etc., Contributions and Gifts.-Whether a charitable lead interest qualifies as a guaranteed annuity interest for purposes of section 170(f)(2)(B) of the Code if that interest may be prepaid before the expiration of the specified term of that interest or before the death of the life or lives used to measure the term of such interest.

11 Section 170.-Charitable, Etc., Contributions and Gifts.-Whether a taxpayer who advances funds to a charitable organization and receives therefor a promissory note may deduct as contributions, in one taxable year or in each of several years, amounts forgiven by the taxpayer in each of several years by endorsement on the note.

12 Section 213(a).-Medical, Dental, Etc., Expenses.-Whether a capital expenditure for an item that is ordinarily used for personal, living, or family purposes, such as a swimming pool, has as its primary purpose the medical care of the taxpayer or the taxpayer's spouse or dependent, or is related directly to such medical care.

13 Section 264(b).-Certain Amounts Paid in Connection with Insurance Contracts.-Whether "substantially all" the premiums of a contract of insurance are paid within a period of 4 years from the date on which the contract is purchased. Also, whether an amount deposited is in payment of a "substantial number" of future premiums on such a contract.

14 Section 264(c)(1).-Certain Amounts Paid in Connection with Insurance Contracts.-Whether section 264(c)(1) of the Code applies.

15 Section 269.-Acquisitions Made to Evade or Avoid Income Tax.-Whether an acquisition is within the meaning of section 269 of the Code.

16 Section 302.-Distributions in Redemption of Stock.-Whether section 302(b) of the Code applies when the consideration given in redemption by a corporation consists entirely or partly of its notes payable, and the shareholder's stock is held in escrow or as security for payment of the notes with the possibility that the stock may or will be returned to the shareholder in the future, upon the happening of specified defaults by the corporation.

17 Section 302.-Distributions in Redemption of Stock.-Whether section 302(b) of the Code applies when the consideration given in redemption by a corporation in exchange for a shareholder's stock consists entirely or partly of the corporation's promise to pay an amount is based on, or contingent on, future earnings of the corporation, when the promise to pay is contingent on working capital being maintained to a certain level, or any other similar contingency.

18 Section 302.-Distributions in Redemption of Stock.-Whether section 302(b) of the Code applies to a redemption of stock if after the redemption the distributing corporation used property that is owned by the shareholder from whom the stock is redeemed and the payments by the corporation for the use of the property are dependent upon the corporation's future earnings or are subordinate to the claims of the corporation's general creditors. Payments for the use of property will not be considered to dependent upon future earnings merely because they are based on a fixed percentage of receipts or sales.

19 Section 302.-Distributions in Redemption of Stock.-Whether the acquisition or disposition of stock described in section 302(c)(2)(B) of the Code has, or did not have, as one of its principal purposes the avoidance of federal income taxes within the meaning of that section, unless the facts and circumstances are materially identical to those set forth in Rev. Rul. 56-556, 1956-2 C.B. 177, Rev. Rul. 56-584, 1956-2 C.B. 179, Rev. Rul. 57-387, 1957-2 C.B. 225, Rev. Rul. 77-293, 1977-2 C.B. 91, or Rev. Rul. 79-67, 1979-1 C.B. 128.

20 Section 302(b)(4) and (e) (pre-TEFRA sections 346(a)(2) and (b)).-Partial Liquidation.-The amount of working capital attributable to a business or portion of a business terminated that may be distributed in partial liquidation.

21 Section 311 and 336.-Taxability of Corporation on Distribution; General Rule.-Upon distribution of property in kind by a corporation to its shareholders, in complete liquidation under section 331 of the Code (when under the facts a sale of the property by the corporation would not qualify under section 337) and section 346(a) (pre-TEFRA section 346(a)(1)), in partial liquidation under section 302(b)(4) and (e) (pre-TEFRA sections 346(a)(2) and (b)) or in redemption of stock under section 302(a), followed by a sale of the property, whether the sale can be deemed to have been made by the corporation under the doctrine of Commissioner v. Court Holding Company, 324 U.S. 331 (1945), 1945 C.B. 58.

22 Section 312.-Effect on Earnings and Profits.-The determination of the amount of earnings and profits of a corporation.

23 Sections 302(b)(4) and (e) (Pre-TEFRA sections 346(a)(2) and (b)), 331, 332, 333 and section 346(a) (pre-TEFRA section 346(a)(1)).-Effects on Recipients of Distributions in Corporate Liquidations.-The tax effect of the liquidation of a corporation preceded or followed by the reincorporation of all or a part of the business and assets when more than a nominal amount of the stock (that is, more than 20 percent in value) of both the liquidating corporation and the transferee corporation is owned by the same shareholders; or when a liquidation is followed by the sales of the corporate assets by the shareholders to another corporation in which such shareholders own more than a nominal amount of the stock (that is, more than 20 percent in value).

24 Section 337.-Gain or Loss; Certain Liquidations.-The application of this section to a corporation upon the sale of property, in connection with its liquidation, to another corporation, when more than a nominal amount of the stock (that is, more than 20 percent in value) of both the selling corporation and the purchasing corporation is owned by the same persons.

25 Section 351.-Transfers to Controlled Corporation.-

(a) That this section applies to a transfer by a shareholder of stock in one corporation (acquired) to another corporation (acquiring), in an exchange otherwise qualifying for treatment under this section, if the exchange is part of a larger transaction that fits a pattern common to acquisitive reorganizations, and after the transaction the acquiring corporation has control of the acquired corporation (within the meaning of section 368(c)), unless there is a continuing interest through stock ownership in the acquiring corporation on the part of the former shareholders of the acquired corporation that is equal in value to at least 50 percent of the value of all of the stock of the acquired corporation outstanding immediately before the overall transaction. For purposes of this determination, liabilities assumed or liabilities to which the property transferred is subject, will be considered to be part of the total consideration received. See Rev. Rul. 80-284, 1980-2 C.B. 117, and section 3.02 of Rev. Proc. 77-37, 1977-2 C.B. 568, 569.

(b) That this section applies to a transfer by a corporation (acquired) of a substantial portion of its assets to another corporation (acquiring), in an exchange otherwise qualifying for treatment under this section, if the exchange is part of a larger transaction that fits a pattern common to acquisitive reorganizations, unless there is a continuing interest through stock ownership in the acquiring corporation on the part of the acquired corporation or shareholders of the acquired corporation that is equal in value to at least 50 percent of the value of all of the stock of the acquired corporation outstanding immediately before the overall transaction. For purposes of this determination, liabilities assumed or liabilities to which the property transferred is subject, will be considered to be part of the total consideration received. In addition, for purposes of this revenue procedure, an acquired corporation shall be deemed to have transferred a substantial portion of its assets if the transferred assets constitute 15 percent or more of its gross assets. See Rev. Rul. 80-285, 1980-2 C.B. 119, and section 3.02 of Rev. Proc. 77-37.

26 Section 368(a)(1)(B).-Definitions Relating to Corporate Reorganizations.-The acceptability of an estimation procedure or the acceptability of a specific sampling procedure to determine the basis of stock acquired by an acquiring corporation in a reorganization described in section 368(a)(1)(B).

27 Section 368(a)(1)(E).-Definitions Relating to Corporate Reorganizations.-Whether a transaction constitutes a corporate recapitalization within the meaning of section 368(a)(1)(E) of the Code (or a transaction that also qualifies under section 1036) except when the recapitalization is an integral part of a larger transaction and it is impossible to determine the tax consequences of the larger transaction without making a determination with regard to the recapitalization.

28 Section 451.-General Rule for Taxable Year of Inclusion.-The tax consequences of a nonqualified unfunded deferred compensation arrangement with respect to a controlling shareholder employee eligible to participate in the arrangement.

29 Sections 451 and 457.-General Rule for Taxable Year of Inclusion; Deferred Compensation Plans with Respect to Service for State and Local Governments.-The tax consequences to unidentified independent contractors in nonqualified unfunded deferred compensation plans. This applies to plans established under section 451 of the Code by employers in the private sector and to eligible state plans under section 457. However, a ruling with respect to a specific independent contractor's participation in such a plan may be issued.

30 Section 453.-Revolving Credit Sales as Installment Sales.-Whether a proposed sampling procedure will be acceptable by the Service for the purpose of determining the portion of revolving credit balances to be treated as installment account balances. See Rev. Proc. 64-4, 1964-1 (Part 1) C.B. 644, and Rev. Proc. 65-5, 1965-1 C.B. 720.

31 Section 641.-Imposition of Tax.-Whether the period of administration or settlement of an estate is reasonable or unduly prolonged.

32 Section 642(c).-Deduction for Amounts Paid or Permanently Set Aside for a Charitable Purpose.-Allowance of an unlimited deduction for amounts set aside by a trust or estate for charitable purposes when there is a possibility that the corpus of the trust or estate may be invaded.

33 Section 704(b)(2).-Partner's Distributive Share Determined.-Whether the allocation to a partner under the partnership agreement of income, gain, loss, deduction, or credit (or an item thereof) has substantial economic effect.

34 Section 704(e).-Family Partnerships.-Matters relating to the validity of a family partnership when capital is not a material income producing factor.

35 Section 801.-Definition of a Life Insurance Company.-Whether a life insurance policy issued during 1984 will meet the definition of life insurance until Congress acts upon legislation concerning the taxation of life insurance companies.

36 Section 856.-Definition of a Real Estate Investment Trust.

-Whether a corporation whose stock is "paired" with or "stapled" to that of another corporation will qualify as a real estate investment trust under section 856 of the Code if the activities of the corporations are integrated.

37 Section 1221.-Capital Asset Defined.-Whether specialty stock allocated to an investment account by a registered specialist on a national securities exchange is a capital asset.

38 Section 1551.-Disallowance of Surtax Exemption and Accumulated Earnings Credit.-Whether a transfer is within section 1551 of the Code.

39 Section 2031.-Definition of Gross Estate.-Actuarial factors for valuing interests in the prospective gross estate of a living person.

40 Section 2055.-Transfers for Public, Charitable, and Religious Uses.-Whether a charitable lead interest qualifies as a guaranteed annuity interest for purposes of section 2055(e)(2)(B) of the Code if that interest may be prepaid before the expiration of the specified term of that interest or before the death of the life or lives used to measure the term of such interest.

41 Section 2512.-Valuation of Gifts.-Actuarial factors for valuing prospective or hypothetical gifts of a donor.

42 Section 2522.-Charitable and Similar Gifts.-Whether a charitable lead interest qualifies as a guaranteed annuity interest for purposes of section 2522(c)(2)(B) of the Code if that interest may be prepaid before the expiration of the specified term of that interest or before the death of the life or lives used to measure the term of such interest.

43 Section 7701.-Definitions.-Whether a foreign arrangement that is a participant in a domestic arrangement classified as a partnership for U.S. tax purposes will itself be classified as a partnership.

44 Section 7701.-Definitions.-Whether a foreign limited liability company will be classified as a partnership if the taxpayer requests classification as a partnership and (1) the taxpayer is a corporation and less than 20 percent of the interests in the limited liability company are held by independent parties or (2) the taxpayer is not a corporation and independent parties hold only a nominal interest in the company.

45 Section 7701.-Definitions.-Whether an organization, formed in a state that has a statute corresponding to the Uniform Limited Partnership Act or the Revised Uniform Limited Partnership Act, lacks the corporate characteristic of continuity of life where, in the case of the removal of a general partner, the partnership agreement allows less than a majority in interest of limited partners to elect a new one to continue the partnership.

.02 General Areas

1 The results of transactions that lack bona fide business purpose or have as their principal purpose the reduction of federal taxes.

2 A matter upon which a court decision adverse to the government has been handed down and the question of following the decision or litigating further has not yet been resolved.

3 A matter involving the prospective application of the estate tax to the property or the estate of a living person.

4 A matter involving alternate plans of proposed transactions or involving hypothetical situations.

5 A matter involving the federal tax consequences of any proposed federal, state, local or municipal legislation. The Service may provide general information in response to an inquiry.

6 Whether reasonable cause exists under Subtitle F (Procedure and Administration) of the Code.

7 Whether a proposed transaction would subject the taxpayer to a criminal penalty.

8 A request that does not comply with the provisions of Rev. Proc. 84-1.

9 Whether, under the common law rules applicable in determining the employer-employee relationship, a professional staffing corporation (loan-out corporation) or the subscriber is the employer of individuals if:

(a) the loan-out corporation hires employees of the subscriber and assigns the employees back to the subscriber or;

(b) the loan-out corporation assigns individuals to subscribers for more than a temporary period (1 year or longer).

SEC. 4. AREAS IN WHICH RULINGS OR DETERMINATION LETTERS WILL NOT ORDINARILY BE ISSUED

.01 Specific questions and problems.

1 Sections 38, 46, and 48.-Investment Tax Credit.-Application of these sections where the formal ownership of property is in a party other than the taxpayer, except when title is held merely as security.

2 Section 61.-Gross Income Defined.-Determination as to who is the true owner of property in cases involving the sale of securities, or participation interests therein, where the purchaser has the contractual right to cause the security, or participation interest therein, to be purchased by either the seller or a third party.

3 Sections 61 and 163.-Gross Income Define; Interest.-Determinations as to who is the true owner of property or the true borrower of money in cases in which the formal ownership of the property or liability for the indebtedness is in another party.

4 Section 103.-Interest on Certain Governmental Obligations.-Whether municipal bonds will meet the "security interest test" under section 103(b)(2)(B) of the Code and section 1.103-7(b)(4) of the regulations because an underlying arrangement is inferred, as illustrated in Rev. Rul. 80-251, 1980-2 C.B. 40, and Rev. Rul. 80-339, 1980-2 C.B. 42, when payments not pledged as security for the bonds are received in respect of the bond-financed property used in the trade or business of nonexempt persons in an amount equal to more than 25 percent of the principal or interest payments on the bonds.

5 Section 103.-Interest on Certain Governmental Obligations.-Whether an issue of industrial development bonds is exempt under section 103(b) of the Code when 10 percent or more of the proceeds of the issue (minus "neutral costs" as described in Rev. Rul. 80-171, 1980-2 C.B. 44) are used to finance a facility in which an owner (or a related person) or a lessee (or a related person), who was a user of the facility at any time before the bonds were issued, will be a user of the facility after the bonds are issued.

6 Section 162.-Trade or Business Expenses.-Whether the requisite risk shifting and risk distribution necessary to constitute insurance are present for purposes of determining the deductibility under section 162 of amounts paid (premiums) by a taxpayer for insurance, unless the facts of the transaction are within the scope of Rev. Rul. 77-316, 1977-2 C.B. 53, or Rev. Rul. 78-338, 1978-2 C.B. 107.

7 Section 167.-Depreciation.

(a) Useful lives of assets.

(b) Depreciation rates.

(c) Salvage value of assets.

8 Sections 167 and 168.-Depreciation; Accelerated Cost Recovery System.-Application of these sections where the formal ownership of property is in a party other than the taxpayer, except when title is held merely as security.

9 Section 170(c).-Charitable, etc., Contributions and Gifts.-Whether a taxpayer who transfers property to a charitable organization and thereafter leases back all or a portion of the transferred property, may deduct the fair market value of the property transferred and leased back as a charitable contribution.

10 Section 302.-Distribution in Redemption of Stock.-The tax effect of the redemption of stock for notes, when the payments on the notes are to be made over a period in excess of 15 years from the date of issuance of such notes.

11 Section 302(b)(4) and (e) (pre-TEFRA section 346(a)(2)).-Partial Liquidation.-Whether a distribution will qualify as a distribution in partial liquidation under section 302(b)(4) and (e)(1)(A) (pre-TEFRA section 346(a)(2)) of the Code unless it results in a 20 percent or greater reduction in (1) gross revenue, (2) net fair market value of assets, and (3) employees.

12 Sections 304 and 357.-Redemption Through Use of Related Corporations; Assumption of Liability.-A transaction similar to that described in Rev. Rul. 80-240, 1980-2 C.B. 116, holding that sections 304(a)(1) and 357(a) of the Code are inapplicable because there was no assumption of liability, unless the taxpayer can satisfy the Internal Revenue Service that the liability was incurred by the taxpayer as a mere intermediary agent for the newly created corporate transferee. To establish this, the taxpayer must submit to the Internal Revenue Service documented evidence, composed at the time the liability was incurred, which indicates that the unrelated lender had agreed to release the transferor-borrower from any and all obligation on the liability in favor of the corporate transferee. Further, the taxpayer must show, or represent to the Internal Revenue Service that transfer and assumption actually occurred, or will actually occur within 12 months of the date the debt was incurred.

13 Section 306.-Disposition of Certain Stock.-Whether the distribution or disposition or redemption of "section 306 stock" in a closely held corporation is in pursuance of a plan having as one of its principal purposes the avoidance of federal income taxes within the meaning of section 306(b)(4) of the Code.

14 Sections 331 and 346(a).-Gain or Loss to Shareholders in Corporate Liquidations.-The tax effect of the liquidation of a corporation by a series of distributions, when the distributions in liquidation are to be made over a period in excess of 3 years from the adoption of the plan of liquidation.

15 Section 341.-Collapsible Corporations.-Whether a corporation will be considered to be a "collapsible corporation," that is, whether it was "formed or availed of" with the view of certain tax consequences. However, ruling requests will be considered on this matter when the enterprise (1) has been in existence for at least 20 years or has clearly demonstrated that it has realized a substantial part of the taxable income to be derived from the manufacturing constructing, producing, or purchasing of property as defined in section 341(b)(1)(A) of the Code and as described in Rev. Rul. 72-48, 1972-1 C.B. 102, (2) has had an aggregate change in the shareholders' interests of not more than 10 percent during that period (except for transfers among family members, as defined in section 267(c)(4)), and (3) had conducted substantially the same trade or business during that period. The period referred to in (2) or (3) above is the lesser of 20 years of corporate existence or the period in which the enterprise has realized a substantial part of the taxable income from activities defined in section 341(b)(1)(A).

16 Section 351.-Transfers to Controlled Corporation.-The tax effect of the transfer when part of the consideration received by the transferors consists of bonds, debentures, or any other evidence of indebtedness of the transferee and the term of the "indebtedness" is either less than 10 years or a determination as to whether the "indebtedness" is properly classified as debt or equity is required in order to establish that the requirements of section 351 are met.

17 Section 801.-Definition of Life Insurance Company.-Whether the requisite risk shifting and risk distribution necessary to constitute insurance are present for purposes of determining if a company is an "insurance company" under section 1.801-3(a) of the regulations, unless the facts of the transaction are within the scope of Rev. Rul. 77-316, 1977-2 C.B. 53, or Rev. Rul. 78 338, 1978-2 C.B. 107.

18 Section 864.-Definitions.-Whether a taxpayer is engaged in trade or business within the United States.

19 Section 871.-Tax on Nonresident Alien Individuals.-The determination as to whether an alien individual is either a resident or nonresident of the United States will not be made with respect to situations in which the determination is dependent on factual representations that cannot be confirmed until the close of the alien individual's affected taxable year(s), that is, representations concerning an alien individual's projected stay and activities in the United States.

20 Sections 894.-Income Affected by Treaty.-Whether a taxpayer has a permanent establishment in the United States for the purpose of any United States Income Tax Treaty.

21 Section 901.-Taxes of Foreign Countries and of Possessions of United States.-Whether a person claiming credit has established, based on all of the relevant facts and circumstances, the amount, if any, paid by the dual capacity taxpayer pursuant to the qualifying levy, that is not paid in exchange for a specific economic benefit. Section 1.901-2A(c)(2) of the regulations.

22 Section 992.-Requirements of a Domestic International Sales Corporation.-The tax effects of a Domestic International Sales Corporation's stock being held by individuals who are also shareholders in a related supplier corporation.

23 Section 7701.-Definitions.-Whether what is generally known as a foreign corporation will be classified as a partnership for U.S. tax purposes if the taxpayer requests classification as a partnership.

24 Section 7701.-Definitions.-Whether a foreign partnership will be classified as an association for U.S. tax purposes if the taxpayer requests classification as an association.

.02 General areas.

1 Any matter in which the determination requested is primarily one of fact, e.g., market value of property, or whether an interest in a corporation is to be treated as stock or indebtedness.

2 The tax effect of any transaction to be consummated at some indefinite future time.

3 Any matter dealing with the question of whether property is held primarily for sale to customers in the ordinary course of trade or business.

4 The tax effect of a transaction if any part of the transaction is involved in litigation among the parties affected by the transaction, except for transactions involving bankruptcy reorganizations.

SEC. 5. AREAS UNDER EXTENSIVE STUDY IN WHICH RULINGS OR DETERMINATION LETTERS WILL NOT BE ISSUED UNTIL THE SERVICE RESOLVES THE ISSUE THROUGH PUBLICATION OF A REVENUE RULING, REVENUE PROCEDURE, REGULATIONS OR OTHERWISE

.01 Section 61.-Gross Income Defined.-Whether amounts voluntarily deferred by a taxpayer under a deferred compensation plan maintained by an organization described in section 501 of the Code are currently includible in the taxpayer's gross income.

.02 Sections 61 and 162.-Gross Income Defined; Trade or Business Expenses.-The tax consequences with respect to a salary reduction arrangement under which an employee receives and returns salary amounts to the employer. (Also sections 3121, 3306, and 3401).

.03 Section 79.-Group-Term Life Insurance Purchased for Employees.-Whether life insurance provided for employees under a "retired lives reserve" plan will be considered group-term insurance (also sections 61, 72, 83, 101, 162, 264, and 641).

.04 Section 101.-Certain Death Benefits.-Whether proceeds of "self-insured" life and survivor benefit plans established through a trust qualified under section 501(c)(9) of the Code are excludable from the beneficiary's gross income as amounts paid by reason of the death of the insured under section 101(a).

.05 Section 101.-Whether the death benefit payable under a single premium increasing death benefit life insurance policy will be excludable from the gross income of the beneficiary thereof pursuant to section 101(a).

.06 Section 103.-Interest on Certain Governmental Obligations.-With respect to requests made pursuant to Rev. Proc. 79-12, 1979-1 C.B. 492, whether municipal bonds will meet the "trade or business test" and the "security interest test" under sections 103(b)(2)(A) and (B) of the Code and section 1.103-7(b)(5) of the regulations when the proceeds are used to finance facilities such as electric energy, gas or water facilities and, pursuant to a contract to take, or to take or pay for, a nonexempt person purchases 75 percent or more of the actual output of the facility but less than 25 percent of the subparagraph (5) output of the facility as defined in section 1.103-7(b)(5)(ii)(b) of the regulations.

.07 Sections 162 and 262.-Commuting Expenses.-Whether expenses are nondeductible commuting expenses.

.08 Section 168(f)(8).-Special Rule for Leases.-The tax consequences in certain areas specifically reserved in the Temporary Income Tax Regulations under the Economic Recovery Act of 1981, relating to special rules for leases. The areas specifically reserved are: section 5c.168(f)(8) 8(b)(9) on retirements and casualties; section 5c.168(f)(8) 9 on the transfer of investment tax credit by section 168(f)(8) leases; section 5c.168(f)(8) 10 on leases between related parties; and section 5c.168(f)(8) 11 on consolidated returns.

.09 Section 216.-Deduction of Taxes, Interest, and Business Depreciation by Cooperative Housing Corporation Tenant-Stockholder.-If a cooperative housing corporation, as defined in section 216(b)(1) of the Code, transfers an interest in real property to a corporation (not a cooperative housing corporation), in exchange for stock or securities of the transferee corporation, which engages in commercial activity with respect to the real property interest transferred, whether (1) the income of the transferee corporation derived from the commercial activity, and (2) any cash and property attributable to the real property interest transfered that may be distributed by the transferee corporation to the cooperative housing corporation, will be considered as gross income of the cooperative housing corporation for the purpose of determining whether 80 percent or more of the gross income of the cooperative housing cooperation is derived from tenant-stockholders within the meaning of section 216(b)(1)(D).

.10 Section 302(b)(4) and (e) (also pre-TEFRA section 346(a)(2) and (b)).-Partial Liquidation.-Whether the absence of an actual redemption of stock is a meaningless gesture within the meaning of Rev. Rul. 79-257, 1979-2 C.B. 136, as amplified by Rev. Rul. 81-3, 1981-1 C.B. 125, when:

(i) the corporation has outstanding more than one class of stock and there are priorities in dividend or liquidating distributions or any other differences in stock rights, or

(ii) either under the terms of the stock or as established contractually, there are outstanding any rights affecting the corporation's stock, such as, but not limited to, warrants, options, convertible securities, shareholder agreements, or rights of first refusal.

.11 Section 306(b)(4).-Transactions Not in Avoidance.-Whether section 306(b)(4) of the Code applies to the distribution and disposition or redemption of "section 306 stock" that is subject to mandatory redemption.

.12 Section 334(b)(2) (pre-TEFRA).-Liquidation of Subsidiary.-Whether an acquiring corporation may treat the life insurance reserves received in the liquidation as unsecured liabilities assumed.

.13 Section 336 (pre-TEFRA).-Distribution of Property in Liquidation.-Whether the liquidation of a life insurance subsidiary is a termination pursuant to section 815(d)(2).

.14 Section 338 (pre-TEFRA section 334(b)(2)).-Certain Stock Purchases Treated as Asset Acquisitions.-The tax consequences, under subchapter L, from the stock purchase and the deemed purchase of the assets of a life insurance subsidiary.

.15 Section 351.-Transfer to Corporation Controlled by Transferor.-Whether section 351 applies to the transfer of widely held developed or undeveloped real property or interests therein; widely held oil and gas properties or interests therein; or any similarly held properties or interests to a corporation in exchange for shares of stock of such corporation when (i) the transfer is the result of solicitation by promoters, brokers, or investment houses, or (ii) the transferee corporation's stock is issued in a form designed to render it readily tradable.

.16 Section 351.-Transfer to Corporation Controlled by Transferor.-Whether section 351 of the Code applies to the transfer of an interest in real property by a cooperative housing corporation (as defined in section 216(b)(1)) to a corporation in exchange for stock or securities of the transferee corporation when the transferee corporation engages in commercial activity with respect to the real property interest transferred.

.17 Section 368.-Definitions Relating to Corporate Reorganizations.-Whether a transaction qualifies under either section 368(b)(1)(B) or section 351(a) of the Code by reason of Rev. Rul. 67-448, 1967-2 C.B. 144, when the same transaction is structured under sections 368(a)(1)(A) and 368(a)(2)(E) (as a reverse triangular merger) and fails to qualify for an advance ruling under those sections merely because (i) the "substantially all" requirement set forth in section 3.01 of Rev. Proc. 77-37, 1977-2 C.B. 568, is not met, or (ii) the "control" requirement of section 368(a)(2)(E)(ii) is not met where the step transaction doctrine may be applied to treat a prior redemption of stock as part of the plan of reorganization.

.18 Section 368.-Definitions Relating to Corporate Reorganizations.-The tax consequences of a transaction intended to qualify as a reorganization under section 368(a)(1)(E) of the Code when the plan or reorganization provides for the use of contingent or escrow stock arrangements, and where the share adjustment is triggered by an event the occurrence or non-occurrence of which is within the control of the shareholders or is triggered by a Service audit of the shareholders or the corporation.

.19 Section 368.-Definitions Relating to Corporate Reorganizations.-Whether the conversion of a financial institution from mutual to stock will qualify under section 368(a)(1)(G) and section 368(a)(3)(D) of the Code, unless the stock of the converted financial institution is acquired by a financial institution to which either section 585 or section 593 of the Code applies.

.20 Section 422A.-INcentive Stock Options.-Whether Holding (1) of Rev. Rul. 80-244, 1980-2 C.B. 234, relating to section 1036, applies to incentive stock options.

.21 Section 565.-Consent Dividends.-Whether the consent dividend procedure under section 565 applies to corporations other than those corporations to which sections 535, 545, 556, 852, and 857 are applicable.

.22 Section 671.-Trust Income Deductions, and Credits Attributable to Grantor and Others as Substantial Owners.-Whether the grantor will be considered the owner of any portion of a trust when (1) the trust corpus consists or will consist substantially of insurance policies on the life of the grantor or the grantor's spouse, (2) the trustee or any other person has a power to apply the trust's income or corpus to the payment of premiums on policies of insurance on the life of the grantor or the grantor's spouse, (3) the trustee or any other person has a power to use the trust's assets to make loans to the grantor's estate or to purchase assets from the grantor's estate, and (4) there is a right or power in any person that would cause the grantor to be treated as the owner of all or a portion of the trust under section 673 to 677.

.23 Section 704(e).-Family Partnerships.-Any matter relating to a family partnership in which, on formation of the partnership or other specified date, there is a special allocation of an item of income, gain, loss, deduction or credit for the purpose of fixing or freezing the value of a partner's partnership interest.

.24 Sections 708 and 741.-Issues arising under subchapter K of the Code and issues of disposition or recapture with respect to assets held by a partnership if a corporation that holds a partnership interest liquidates and distributes the partnership interest to shareholders.

.25 Section 721.-Nonrecognition of Gain or Loss on Contribution.-Whether section 721 applies to the contribution of widely held developed or undeveloped real property or interests therein; widely held oil and gas properties or interests therein; or any similarly held properties or interests to a partnership in exchange for an interest in the partnership when (i) the contribution is the result of solicitation by promoters, brokers, or investment houses, or (ii) the interest in the transferee partnership is issued in a form designed to render it readily tradable.

.26 Section 801(b).-Life Insurance Reserves Defined.-Whether the life insurance reserves acquired in the liquidation of a life insurance subsidiary qualify as unsecured liabilities assumed by the acquiring corporation for purposes of section 334(b)(2) (pre-TEFRA) and section 338 (added by TEFRA).

.27 Section 802(b)(3).-Life Insurance Company Taxable Income Defined.-Whether the liquidation of a life insurance subsidiary pursuant to either section 334(b)(2) (pre-TEFRA) or section 338 (added by TEFRA) is a termination under section 315(d)(2) causing a distribution from the subsidiary's policyholders surplus account.

.28 Section 809(d)(11).-Other Deductions.-Whether a portion of the purchase price of the stock of the life insurance subsidiary is properly allocable to insurance in force.

.29 Section 815(d)(2).-Termination as Life Insurance Company.-Whether the liquidation of a life insurance subsidiary pursuant to section 334(b)(2) (pre-TEFRA) or section 338 (added by TEFRA) is a termination requiring the application of section 802(b)(3).

.30 Section 817.-Rules Relating to Certain Gains and Losses.-Whether the purchase of the stock of a life insurance subsidiary and its subsequent liquidation under section 334(b)(2) (pre-TEFRA) or section 338 (added by TEFRA) is, in fact, a purchase of the subsidiary's insurance contracts.

.31 Section 818(b)(3).-Amortization of Premium and Accrual of Discount-Exception.-Whether the difference between the face value of bonds held by a life insurance subsidiary liquidating under section 334(b)(2) (pre-TEFRA) or section 338 (added by TEFRA) and the amount allocable to such bonds pursuant to the liquidation is market discount and need not be accrued.

.32 Section 1248.-Gain From Certain Sales or Exchanges of Stock In Certain Foreign Corporations.-Whether the earnings and profits of a controlled foreign corporation attributable to stock exchanged in a transaction subject to section 1248 should be reduced by the amount of gain treated as a dividend in the hands of the seller under section 1248(a).

.33 Section 1502.-Regulations.-Whether a parent cooperative housing corporation (as defined in section 216(b)(1)) will be permitted to file a consolidated income tax return with its transferee subsidiary if the transferee engages in commercial activity with respect to the real property interest transferred to it by the cooperative housing corporation.

.34 Section 2503.-Taxable Gifts.-Whether the transfer of property to a trust will be a gift of a present interest in property when (1) the trust corpus consists or will consist substantially of insurance policies on the life of the grantor or the grantor's spouse, (2) the trustee or any other person has a power to apply the trust's income or corpus to the payment of premiums on policies of insurance on the life of the grantor or the grantor's spouse, (3) the trustee or any other person has a power to use the trust's assets to make loans to the grantor's estate or to purchase assets from the grantor's estate, (4) the trust beneficiaries have the power to withdraw, on demand, any additional transfers made to the trust, and (5) there is a right or power in any person that would cause the grantor to be treated as the owner of all or a portion of the trust under section 673 to 677.

.35 Section 2514.-Powers of Appointment.-If the beneficiaries of a trust permit a power of withdrawal to lapse, whether section 2514(e) of the Code will be applicable to each beneficiary in regard to the power when (1) the trust corpus consists or will consist substantially of insurance policies on the life of the grantor or the grantor's spouse, (2) the trustee or any other person has a power to apply the trust's income or corpus to the payment of premiums on policies of insurance on the life of the grantor or the grantor's spouse, (3) the trustee or any other person has a power to use the trust's assets to make loans to the grantor's estate or to purchase assets from the grantor's estate, (4) the trust beneficiaries have the power to withdraw, on demand, any additional transfers made to the trust, and (5) there is right or power in any person that would cause the grantor to be treated as the owner of all or a portion of the trust under section 673 to 677.

.36 Sections 3121, 3306, and 3401.-Employment Taxes.-Who is the employer of an "employee-owner" as defined in section 269A of the Code.

.37 Section 7701.-Definitions.-The classification of arrangements formed as trusts under local law, in which the trust borrows money to purchase equipment or property and leases it to third parties, and in which the grantor or grantors have a beneficial interest in the trust and the power to manage the activities of the trust.

.38 Section 7701.-Definitions.-The classification of limited liability companies for federal income tax purposes.

.39 Section 7701.-Definitions.-The classification of an arrangement as a fixed investment trust when the arrangement has multiple classes of equitable ownership.

SEC. 7. EFFECT ON OTHER REVENUE PROCEDURES

Rev. Procs. 83-22, 83-31, 83-39, 83-42, 83-45, 83-50, 83-52, 83-53, 83-55, 83-57, 83-60, 83-61, 83-62, 83-64, 83-67, 83-75, 83-80, 83-82, 83-85, 83-88, 84-8, 84-12, 84-13, 84-14, 84-15, 84-18, and 84-21 are superseded.