SERVICE ABOLISHES USER FEE FOR EARNINGS AND PROFITS DETERMINATIONS.

Rev. Proc. 88-27

SECTION 1. PURPOSE

This revenue procedure provides that no user fee is charged for earning and profits determinations (Form 5452). It modifies Rev. Proc. 88-8, 1988-4 I.R.B. 22, as MODIFIED by Rev. Proc. 88-13, 1988-7 I.R.B. 7, which requires the payment of a user fee for requests to the Internal Revenue Service for ruling letters, opinion letters, and determination letters and for similar requests.

SEC. 2 BACKGROUND

01 Question N on page 3 of the Form 1120, U.S. Corporation Income Tax Return, instructs the corporate taxpayer, that, if during the year it paid dividends in excess of this current and accumulated earnings and profits, it must file Form 5452, Corporate Report of Nontaxable Dividends.

02 Section 10511 of the Revenue Act of 1987 (Act), Pub. L. No. 100-203, 101 Stat. 1330, provides that the Secretary shall establish a program requiring the payment of user fees for requests to the Internal Revenue Service for ruling letters, opinion letters, and determination letters and for similar requests.

03 Rev. Proc. 8808 establishes such a program. It imposes a $200 fee for earnings and profits determination letters (Form 5452).

04 After reconsideration, however, the Service has concluded that a Form 5452 is not subject to section 10511 of the Act because that form is neither a request for a ruling letter, opinion letter, or determination letter nor a similar request.

SEC. 3 PROCEDURES

01 Section 4.031 of Rev. Proc. 88-8 is modified to delete the user fee of $200 for earnings and profits determinations (form 5452). Section 4.031 of Rev. Proc. 88-8, as modified, reads as followings:

Applications with respect to accounting periods (Forms 1128 and 2553) . . . . $150

Change in accounting method (Form 3115) . . . . . $200

All other rulings (which includes accounting period, accounting method, and earnings and profits requests other than those submitted on Forms 1128, 2553, 3115, and 5452) . . . . . $300

SEC. 4. EFFECT ON OTHER REVENUE PROCEDURES

Section 4.031 of Rev. Proc. 88-8, is modified. When reprinted in the Cumulative Bulletin, Rev. Proc. 88-8 will incorporate this modification.

SEC. 5. EFFECTIVE DATE

This revenue procedure applies to all requests subject to Rev. Proc. 88-8, that is, to requests postmarked or, if not mailed, received on or after February 1, 1988. Any fees that have been paid for earnings and profits determinations (Form 5452) will be refunded.

DRAFTING INFORMATION

The principal author of this revenue procedure is Dan McCubbin of the Corporation Tax Division. For further information regarding this revenue procedure, call (202) 566-4389 (not a toll-free call).