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Bulletin No.

2001–48
November 26, 2001

HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in iden-
tifying the subject matter covered. They may not be relied
upon as authoritative interpretation.

SPECIAL ANNOUNCEMENT EXEMPT ORGANIZATIONS


Announcement 2001–116, page 539. Announcement 2001–118, page 540.
The Fourteenth Annual Institute on Current Issues in Interna- A list is provided of organizations now classified as private
tional Taxation, jointly sponsored by the Internal Revenue Ser- foundations.
vice and The George Washington University, will be held on
December 13 and 14, 2001, at the J.W. Marriott Hotel in Wash- ADMINISTRATIVE
ington, D.C.
Rev. Proc. 2001–54, page 530.
INCOME TAX Optional standard mileage rates. This procedure
announces 36.5 cents as the optional rate for deducting or
REG–125161–01, page 538. accounting for expenses for business use of an automobile, 14
Proposed regulations under section 446 of the Code confirm cents as the optional rate for use of an automobile as a chari-
that the timing rules of the intercompany transaction regula- table contribution, and 13 cents as the optional rate for use of
tions are a method of accounting. an automobile as a medical or moving expense for 2002. It
provides rules for substantiating the deductible expenses of
EMPLOYEE PLANS using an automobile for business, moving, medical, or chari-
table purposes. Rev. Proc. 2000–48 superseded.
Notice 2001–71, page 530.
Weighted average interest rate update. The weighted aver- Announcement 2001–115, page 539.
age interest rate for November 2001 and the resulting permis- The Service announces the availability of new Form 8038–R,
sible range of interest rates used to calculate current liability Request for Recovery of Overpayments Under Arbitrage
for purposes of the full funding limitation of section 412(c)(7) of Rebate Provisions. This form replaces the procedures of Rev.
the Code are set forth. Proc. 92–83. (1992–2 C.B. 487).

Finding Lists begin on page ii.


The IRS Mission
Provide America’s taxpayers top quality service by helping applying the tax law with integrity and fairness to all.
them understand and meet their tax responsibilities and by

Introduction
The Internal Revenue Bulletin is the authoritative instrument of and Service personnel and others concerned are cautioned
the Commissioner of Internal Revenue for announcing official against reaching the same conclusions in other cases unless
rulings and procedures of the Internal Revenue Service and for the facts and circumstances are substantially the same.
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general The Bulletin is divided into four parts as follows:
interest. It is published weekly and may be obtained from the
Superintendent of Documents on a subscription basis. Bulletin Part I.—1986 Code.
contents are consolidated semiannually into Cumulative Bulle- This part includes rulings and decisions based on provisions of
tins, which are sold on a single-copy basis. the Internal Revenue Code of 1986.

It is the policy of the Service to publish in the Bulletin all sub- Part II.—Treaties and Tax Legislation.
stantive rulings necessary to promote a uniform application of
This part is divided into two subparts as follows: Subpart A, Tax
the tax laws, including all rulings that supersede, revoke,
Conventions and Other Related Items, and Subpart B, Legisla-
modify, or amend any of those previously published in the Bul-
tion and Related Committee Reports.
letin. All published rulings apply retroactively unless otherwise
indicated. Procedures relating solely to matters of internal
management are not published; however, statements of inter- Part III.—Administrative, Procedural, and
nal practices and procedures that affect the rights and duties Miscellaneous.
of taxpayers are published. To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
Revenue rulings represent the conclusions of the Service on included in this part are Bank Secrecy Act Administrative Rul-
the application of the law to the pivotal facts stated in the rev- ings. Bank Secrecy Act Administrative Rulings are issued by
enue ruling. In those based on positions taken in rulings to tax- the Department of the Treasury’s Office of the Assistant Secre-
payers or technical advice to Service field offices, identifying tary (Enforcement).
details and information of a confidential nature are deleted to
prevent unwarranted invasions of privacy and to comply with Part IV.—Items of General Interest.
statutory requirements. This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they The first Bulletin for each month includes a cumulative index for
may be used as precedents. Unpublished rulings will not be the matters published during the preceding months. These
relied on, used, or cited as precedents by Service personnel in monthly indexes are cumulated on a semiannual basis, and are
the disposition of other cases. In applying published rulings and
published in the first Bulletin of the succeeding semiannual
procedures, the effect of subsequent legislation, regulations,
period, respectively.
court decisions, rulings, and procedures must be considered,

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402.

November 26, 2001 2001–48 I.R.B.


Part I. Rulings and Decisions Under the Internal Revenue Code of 1986
Section 62.—Adjusted Gross Section 170.—Charitable, Section 274.—Disallowance
Income Defined etc., Contributions and Gifts of Certain Entertainment,
etc., Expenses
26 CFR 1.62–2: Reimbursements and other expense 26 CFR 1.170A–1: Charitable, etc., contributions
allowance arrangements. and gifts; allowance of deduction. 26 CFR 1.274–5: Substantiation requirements.

Rules under which a reimbursement or other Rules are set forth for substantiating the amount Rules are set forth for an optional method for
expense allowance arrangement for the cost of oper- of a deduction for an expense for charitable use of substantiating the amount of ordinary and necessary
ating an automobile for business purposes will sat- an automobile. See Rev. Proc. 2001–54, page 530. business expenses of an employee for automobile
isfy the requirements of section 62(c) of the Code as expenses when a payor provides a mileage allow-
to business connection, substantiation, and returning ance for such expenses. Rules are also set forth for
amounts in excess of expenses are provided. See
Rev. Proc. 2001–54, page 530. Section 213.—Medical, an optional method for employees and self-
employed individuals to use in substantiating a trade
Dental, etc., Expenses or business deduction for automobile expenses. See
Rev. Proc. 2001–54, page 530.
Section 162.—Trade or 26 CFR 1.213–1: Medical, dental, etc., expenses.
Business Expenses
Rules are set forth for substantiating the amount Section 1016.—Adjustments
of a deduction for an expense for use of an automo-
26 CFR 1.162–17: Reporting and substantiation of
bile to obtain medical services. See Rev. Proc. to Basis
certain business expenses of employees.
2001–54, page 530.
26 CFR 1.1016–3: Exhaustion, wear and tear, obso-
Rules are set forth for substantiating the amount lescence, amortization, and depletion for periods
of a deduction for an expense for business use of an since February 28, 1913.
automobile that most nearly represents current costs. Section 217.—Moving
See Rev. Proc. 2001–54, page 530. Expenses Rules are set forth for substantiation of expenses
relating to the business use of an automobile using a
26 CFR 1.217–2: Moving expenses. standard mileage rate, one component of which is
depreciation, which will reduce the basis of the
Rules are set forth for substantiating the amount automobile (but not below zero) in determining
of a deduction for an expense for use of an automo- adjusted basis as required by § 1016. See Rev. Proc.
bile as part of a move. See Rev. Proc. 2001–54, 2001–54, page 530.
page 530.

2001–48 I.R.B 529 November 26, 2001


Part III. Administrative, Procedural, and Miscellaneous
Weighted Average Interest interest rates used to calculate current The average yield on the 30–year
Rate Update liability for the purpose of the full fund- Treasury Constant Maturities for October
ing limitation of § 412(c)(7) of the Inter- 2001 is 5.32 percent.
Notice 2001–71 nal Revenue Code as amended by the The following rates were determined
Omnibus Budget Reconciliation Act of for the plan years beginning in the month
Notice 88–73 provides guidelines for 1987 and as further amended by the Uru- shown below.
determining the weighted average interest guay Round Agreements Act, Pub. L.
rate and the resulting permissible range of 103–465 (GATT).

90% to 105% 90% to 110%


Weighted Permissible Permissible
Month Year Average Range Range
November 2001 5.74 5.17 to 6.03 5.17 to 6.32

DRAFTING INFORMATION tion described in this revenue procedure the cost of operating an automobile that is
is not mandatory and a taxpayer may use attributable to personal use is deductible.
The principal author of this notice is actual allowable expenses if the taxpayer .02 Section 274(d) provides, in part,
Todd Newman of the Employee Plans, maintains adequate records or other suffi- that no deduction shall be allowed under
Tax Exempt and Government Entities cient evidence for proper substantiation. § 162 with respect to any listed property
Division. For further information regard- (as defined in § 280F(d)(4) to include
ing this notice, please call Mr. Newman at SECTION 2. SUMMARY OF passenger automobiles and any other
(202) 283–9888 (not a toll-free number). STANDARD MILEAGE RATES property used as a means of transporta-
tion) unless the taxpayer complies with
.01 Standard mileage rates. certain substantiation requirements. The
26 CFR 601.105: Examination of returns and claims (1) Business (section 5 below) section further provides that regulations
for refund, credit, or abatement; determination of may prescribe that some or all of the sub-
36.5 cents per mile
correct tax liability. (Also Part I, Sections 62, 162, stantiation requirements do not apply to
170, 213, 217, 274, 1016; 1.62–2, 1.162–17, (2) Charitable (section 7 below)
1.170A–1, 1.213–1, 1.217–2, 1.274–5, 1.1016–3.) 14 cents per mile an expense that does not exceed an
(3) Medical and Moving (section 7 amount prescribed by such regulations.
.03 Section 1.274–5(j), in part, grants
Rev. Proc. 2001–54 below)
13 cents per mile the Commissioner of Internal Revenue
.02 Determination of standard mileage the authority to establish a method under
SECTION 1. PURPOSE
rates. The business, medical, and moving which a taxpayer may use mileage rates
to substantiate, for purposes of § 274(d),
This revenue procedure updates Rev. standard mileage rates reflected in this
the amount of the ordinary and necessary
Proc. 2000–48 (2000–49 I.R.B. 570) by revenue procedure are based on an annual
expenses of using a vehicle for local
providing optional standard mileage rates study of the fixed and variable costs of
transportation and transportation to, from,
for employees, self-employed individuals, operating an automobile conducted on
and at the destination while traveling
or other taxpayers to use in computing the behalf of the Internal Revenue Service by
away from home.
deductible costs of operating an automo- an independent contractor, and the chari- .04 Section 1.274–5(g), in part, grants
bile for business, charitable, medical, or table standard mileage rate is provided in the Commissioner the authority to pre-
moving expense purposes. This revenue § 170(i) of the Internal Revenue Code. scribe rules relating to mileage allow-
procedure also provides rules under ances for ordinary and necessary
which the amount of ordinary and neces- SECTION 3. BACKGROUND expenses of using a vehicle for local
sary expenses of local travel or transpor- transportation and transportation to, from,
tation away from home that are paid or .01 Section 162(a) allows a deduction and at the destination while traveling
incurred by an employee will be deemed for all the ordinary and necessary away from home. Pursuant to this grant
substantiated under § 1.274–5 of the expenses paid or incurred during the tax- of authority, the Commissioner may pre-
Income Tax Regulations when a payor able year in carrying on any trade or busi- scribe rules under which such allowances,
(the employer, its agent, or a third party) ness. Under that provision, an employee if in accordance with reasonable business
provides a mileage allowance under a or self-employed individual may deduct practice, will be regarded as (1) equiva-
reimbursement or other expense allow- the cost of operating an automobile to the lent to substantiation, by adequate records
ance arrangement to pay for such extent that it is used in a trade or busi- or other sufficient evidence, of the
expenses. Use of a method of substantia- ness. However, under § 262, no portion of amount of such travel and transportation
November 26, 2001 530 2001–48 I.R.B.
expenses for purposes of § 1.274–5(c), stantiated pursuant to rules prescribed allowance arrangement that meets the
and (2) satisfying the requirements of an under § 274(d), provided the allowance is requirements specified in § 1.62–2(c)(1)
adequate accounting to the employer of reasonably calculated not to exceed the and that is
the amount of such expenses for purposes amount of the employee’s expenses or (1) paid with respect to the ordinary
of § 1.274–5(f). anticipated expenses and the employee is and necessary business expenses incurred,
.05 Section 62(a)(2)(A) allows an required to return any portion of such an or which the payor reasonably anticipates
employee, in determining adjusted gross allowance that relates to miles of travel will be incurred, by an employee for
income, a deduction for the expenses not substantiated. transportation expenses in connection
allowed by Part VI (§ 161 and following), .08 Section 1.62–2(h)(2)(i)(B) pro- with the performance of services as an
subchapter B, chapter 1 of the Code, paid vides that if a payor pays a mileage employee of the employer,
or incurred by the employee in connec- allowance under an arrangement that (2) reasonably calculated not to exceed
tion with the performance of services as meets the requirements of § 1.62–2(c)(1), the amount of the expenses or the antici-
an employee under a reimbursement or the portion, if any, of the allowance that pated expenses, and
other expense allowance arrangement relates to miles of travel substantiated in (3) paid at the applicable standard
with a payor. accordance with § 1.62–2(e), that exceeds mileage rate, a flat rate or stated schedule,
.06 Section 62(c) provides that an the amount of the employee’s expenses or in accordance with any other Service-
arrangement will not be treated as a deemed substantiated for such travel pur- specified rate or schedule.
reimbursement or other expense allow- suant to rules prescribed under § 274(d) .04 Flat rate or stated schedule. A
ance arrangement for purposes of and § 1.274–5(g), and that the employee mileage allowance is paid at a flat rate or
§ 62(a)(2)(A) if it— is not required to return, is subject to stated schedule if it is provided on a uni-
(1) does not require the employee to withholding and payment of employment form and objective basis with respect to
substantiate the expenses covered by the taxes. See §§ 31.3121(a)–3, 31.3231(e)– the expenses described in section 4.03 of
arrangement to the payor, or this revenue procedure. Such allowance
1(a)(5), 31.3306(b)–2, and 31.3401(a)–4
(2) provides the employee with the may be paid periodically at a fixed rate, at
of the Employment Tax Regulations.
right to retain any amount in excess of the a cents-per-mile rate, at a variable rate
Because the employee is not required to
substantiated expenses covered under the based on a stated schedule, at a rate that
return this excess portion, the reasonable
arrangement. Section 62(c) further pro- combines any of these rates, or on any
period of time provisions of § 1.62–2(g)
vides that the substantiation requirements other basis that is consistently applied and
(relating to the return of excess amounts)
described therein shall not apply to any in accordance with reasonable business
do not apply to this excess portion.
expense to the extent that, under the grant practice. Thus, for example, a periodic
.09 Under § 1.62–2(h)(2)(i)(B)(4), the
of regulatory authority prescribed in payment at a fixed rate to cover the fixed
Commissioner may, in his or her discre-
§ 274(d), the Commissioner has provided costs (including depreciation (or lease
tion, prescribe special rules regarding the
that substantiation is not required for such payments), insurance, registration and
timing of withholding and payment of
expense. license fees, and personal property taxes)
.07 Under § 1.62–2(c)(1), a reimburse- employment taxes on mileage allowances. of driving an automobile in connection
ment or other expense allowance arrange- with the performance of services as an
ment satisfies the requirements of § 62(c) SECTION 4. DEFINITIONS employee of the employer, coupled with a
if it meets the requirements of business periodic payment at a cents-per-mile rate
connection, substantiation, and returning .01 Standard mileage rate. The term to cover the operating costs (including
amounts in excess of expenses as speci- “standard mileage rate” means the appli- gasoline and all taxes thereon, oil, tires,
fied in the regulations. Section 1.62– cable amount provided by the Service for and routine maintenance and repairs) of
2(e)(2) specifically provides that substan- optional use by employees or self- using an automobile for such purposes, is
tiation of certain business expenses in employed individuals in computing the an allowance paid at a flat rate or stated
accordance with rules prescribed under deductible costs of operating automobiles schedule. Likewise, a periodic payment at
the authority of § 1.274–5(g) will be (including vans, pickups, or panel trucks) a variable rate based on a stated schedule
treated as substantiation of the amount of owned or leased for business purposes, or for different locales to cover the costs of
such expenses for purposes of § 1.62–2. by taxpayers in computing the deductible driving an automobile in connection with
Under § 1.62–2(f)(2), the Commissioner costs of operating automobiles for chari- the performance of services as an
may prescribe rules under which an table, medical, or moving expense pur- employee is an allowance paid at a flat
arrangement providing mileage allow- poses. rate or stated schedule.
ances will be treated as satisfying the .02 Transportation expenses. The term
requirement of returning amounts in “transportation expenses” means the SECTION 5. BUSINESS STANDARD
excess of expenses, even though the expenses of operating an automobile for MILEAGE RATE
arrangement does not require the local travel or transportation away from
employee to return the portion of such an home. .01 In general. The standard mileage
allowance that relates to miles of travel .03 Mileage allowance. The term rate for transportation expenses is 36.5
substantiated and that exceeds the amount “mileage allowance” means a payment cents per mile for all miles of use for
of the employee’s expenses deemed sub- under a reimbursement or other expense business purposes. This business standard
2001–48 I.R.B 531 November 26, 2001
mileage rate will be adjusted annually (to .05 Depreciation. For owned automo- (subject to the applicable depreciation
the extent warranted) by the Service, and biles placed in service for business pur- deduction limitations under § 280F).
any such adjustment will be applied pro- poses, and for which the business stan- (4) The business standard mileage rate
spectively. dard mileage rate has been used for any and this revenue procedure may not be
.02 Use of the business standard mile- year, depreciation will be considered to used to compute the amount of the
age rate. A taxpayer may use the business have been allowed at the rate of 12 cents deductible automobile expenses of an
standard mileage rate with respect to an per mile for 1997, 1998, and 1999; 14 employee of the United States Postal Ser-
automobile that is either owned or leased cents per mile for 2000; and 15 cents per vice incurred in performing services
by the taxpayer. A taxpayer generally may mile for 2001 and 2002, for those years in involving the collection and delivery of
deduct an amount equal to either the busi- which the business standard mileage rate mail on a rural route if the employee
ness standard mileage rate times the num- was used. If actual costs were used for receives qualified reimbursements (as
ber of business miles traveled or the one or more of those years, the rates defined in § 162(o)) for such expenses.
actual costs (both operating and fixed) above will not apply to any year in which See § 162(o) for the rules that apply to
paid or incurred by the taxpayer that are such costs were used. The depreciation these qualified reimbursements.
allocable to traveling those business described above will reduce the basis of
miles. the automobile (but not below zero) in SECTION 6. RESERVED
.03 Business standard mileage rate in determining adjusted basis as required by
lieu of operating and fixed costs. A § 1016.
deduction using the standard mileage rate .06 Limitations. SECTION 7. CHARITABLE,
for business miles is computed on a (1) The business standard mileage rate MEDICAL, AND MOVING
yearly basis and is in lieu of all operating may not be used to compute the deduct- STANDARD MILEAGE RATE
and fixed costs of the automobile allo- ible expenses of (a) automobiles used for
cable to business purposes (except as pro- hire, such as taxicabs, or (b) two or more .01 Charitable. Section 170(i) pro-
vided in section 9.06 of this revenue pro- automobiles used simultaneously (such as vides a standard mileage rate of 14 cents
cedure). Such items as depreciation (or in fleet operations). per mile for purposes of computing the
lease payments), maintenance and repairs, (2) The business standard mileage rate charitable deduction for use of an auto-
tires, gasoline (including all taxes may not be used to compute the deduct- mobile in connection with rendering gra-
thereon), oil, insurance, and license and ible business expenses of an automobile tuitous services to a charitable organiza-
registration fees are included in operating leased by a taxpayer unless the taxpayer tion under § 170.
and fixed costs for this purpose. uses either the business standard mileage .02 Medical and moving. The standard
.04 Parking fees, tolls, interest, and rate or a “FAVR” allowance (as provided mileage rate is 13 cents per mile for use
taxes. Parking fees and tolls attributable in section 8 of this revenue procedure) to of an automobile (a) to obtain medical
to use of the automobile for business pur- compute the deductible business expenses care described in § 213, or (b) as part of
poses may be deducted as separate items. of the automobile for the entire lease a move for which the expenses are
Likewise, interest relating to the purchase period (including renewals). For a lease deductible under § 217. The standard
of the automobile as well as state and commencing on or before December 31, mileage rates for medical and moving
local personal property taxes may be 1997, the “entire lease period” means the transportation expenses will be adjusted
deducted as separate items, but only to portion of the lease period (including annually (to the extent warranted) by the
the extent allowable under § 163 or 164, renewals) remaining after that date. Service, and any such adjustment will be
respectively. If the automobile is operated (3) The business standard mileage rate applied prospectively.
less than 100 percent for business pur- may not be used to compute the deduct- .03 Charitable, medical, or moving
poses, an allocation is required to deter- ible expenses of an automobile for which expense standard mileage rate in lieu of
mine the business and nonbusiness por- the taxpayer has (a) claimed depreciation operating expenses. A deduction com-
tion of the taxes and interest deduction using a method other than straight-line puted using the applicable standard mile-
allowable. However, §163(h)(2)(A) for its estimated useful life, (b) claimed age rate for charitable, medical, or mov-
expressly provides that interest is nonde- a § 179 deduction, or (c) used the Accel- ing expense miles is in lieu of all
ductible personal interest when it is paid erated Cost Recovery System (ACRS) operating expenses (including gasoline
or accrued on indebtedness properly allo- under former § 168 or the Modified and oil) of the automobile allocable to
cable to the trade or business of perform- Accelerated Cost Recovery System such purposes. Costs for such items as
ing services as an employee. Section 164 (MACRS) under current § 168. By using depreciation (or lease payments), insur-
also expressly provides that state and the business standard mileage rate, the ance, and license and registration fees are
local taxes that are paid or accrued by a taxpayer has elected to exclude the auto- not deductible, and are not included in
taxpayer in connection with an acquisi- mobile (if owned) from MACRS pursuant such standard mileage rates.
tion or disposition of property will be to § 168(f)(1). If, after using the business .04 Parking fees, tolls, interest, and
treated as part of the cost of the acquired standard mileage rate, the taxpayer uses taxes. Parking fees and tolls attributable
property or as a reduction in the amount actual costs, the taxpayer must use to the use of the automobile for chari-
realized on the disposition of such prop- straight-line depreciation for the automo- table, medical, or moving expense pur-
erty. bile’s remaining estimated useful life poses may be deducted as separate items.
November 26, 2001 532 2001–48 I.R.B.
Interest relating to the purchase of the revenue procedure. An optional high must be paid at a rate that does not
automobile and state and local personal mileage payment covers the additional exceed the rate for that computation
property taxes are not deductible as chari- depreciation for a standard automobile period.
table, medical, or moving expenses, but attributable to business miles driven and (4) Base locality. A base locality is the
they may be deducted as separate items to substantiated by the employee for a calen- particular geographic locality or region of
the extent allowable under § 163 or 164, dar year in excess of the annual business the United States in which the costs of
respectively. mileage for that year. If an employee is driving an automobile in connection with
covered by the FAVR allowance for less the performance of services as an
SECTION 8. FIXED AND VARIABLE than the entire calendar year, the annual employee of the employer are generally
RATE ALLOWANCE business mileage may be prorated on a paid or incurred by the employee. Thus,
monthly basis for purposes of the preced- for purposes of determining the amount
.01 In general. ing sentence. of fixed costs, the base locality is gener-
(1) The ordinary and necessary (2) Periodic fixed payment. A periodic ally the geographic locality or region in
expenses paid or incurred by an employee fixed payment covers the projected fixed which the employee resides. For purposes
in driving an automobile owned or leased costs (including depreciation (or lease of determining the amount of operating
by the employee in connection with the payments), insurance, registration and costs, the base locality is generally the
performance of services as an employee license fees, and personal property taxes) geographic locality or region in which the
of the employer will be deemed substan- of driving the standard automobile in con- employee drives the automobile in con-
tiated (in an amount determined under nection with the performance of services nection with the performance of services
section 9 of this revenue procedure) when as an employee of the employer in a base as an employee of the employer.
a payor reimburses such expenses with a locality, and must be paid at least quar- (5) Standard automobile. A standard
mileage allowance using a flat rate or terly. A periodic fixed payment may be automobile is the automobile selected by
stated schedule that combines periodic computed by (a) dividing the total pro- the payor on which a specific FAVR
fixed and variable rate payments that jected fixed costs of the standard automo- allowance is based.
meet all the requirements of section 8 of bile for all years of the retention period, (6) Standard automobile cost. The
this revenue procedure (a FAVR allow- determined at the beginning of the reten- standard automobile cost for a calendar
ance). tion period, by the number of periodic year may not exceed 95 percent of the
(2) The amount of a FAVR allowance fixed payments in the retention period, sum of (a) the retail dealer invoice cost of
must be based on data that (a) is derived and (b) multiplying the resulting amount the standard automobile in the base local-
from the base locality, (b) reflects retail by the business use percentage. ity, and (b) state and local sales or use
prices paid by consumers, and (c) is rea- (3) Periodic variable payment. A peri- taxes applicable on the purchase of such
sonable and statistically defensible in odic variable payment covers the pro- an automobile. Further, the standard auto-
approximating the actual expenses jected operating costs (including gasoline mobile cost may not exceed $27,100.
employees receiving the allowance would and all taxes thereon, oil, tires, and rou- (7) Annual mileage. Annual mileage is
incur as owners of the standard automo- tine maintenance and repairs) of driving a the total mileage (business and personal)
bile. standard automobile in connection with a payor reasonably projects a standard
.02 Definitions. the performance of services as an automobile will be driven during a calen-
(1) FAVR allowance. A FAVR allow- employee of the employer in a base local- dar year. Annual mileage equals the
ance includes periodic fixed payments ity, and must be paid at least quarterly. annual business mileage divided by the
and periodic variable payments. A payor The rate of a periodic variable payment business use percentage.
may maintain more than one FAVR for a computation period may be com- (8) Annual business mileage. Annual
allowance. A FAVR allowance that uses puted by dividing the total projected oper- business mileage is the mileage a payor
the same payor, standard automobile (or ating costs for the standard automobile reasonably projects a standard automobile
an automobile of the same make and for the computation period, determined at will be driven by an employee in connec-
model that is comparably equipped), the beginning of the computation period, tion with the performance of services as
retention period, and business use per- by the computation period mileage. A an employee of the employer during the
centage is considered one FAVR allow- computation period can be any period of calendar year, but may not be less than
ance, even though other features of the a year or less. Computation period mile- 6,250 miles for a calendar year. Annual
allowance may vary. A FAVR allowance age is the total mileage (business and per- business mileage equals the annual mile-
also includes any optional high mileage sonal) a payor reasonably projects a stan- age multiplied by the business use per-
payments; however, such optional high dard automobile will be driven during a centage.
mileage payments are included in the computation period and equals the reten- (9) Business use percentage. A busi-
employee’s gross income, are reported as tion mileage divided by the number of ness use percentage is determined by
wages or other compensation on the computation periods in the retention dividing the annual business mileage by
employee’s Form W–2, and are subject to period. For each business mile substanti- the annual mileage. The business use per-
withholding and payment of employment ated by the employee for the computation centage may not exceed 75 percent. In
taxes when paid. See section 9.05 of this period, the periodic variable payment lieu of demonstrating the reasonableness

2001–48 I.R.B 533 November 26, 2001


of the business use percentage based on ally, a payor may use a business use per- ance that is paid for the following annual
records of total mileage and business centage that is less than or equal to the business mileage:
mileage driven by the employees annu- following percentages for a FAVR allow-

Annual business mileage Business use percentage


6,250 or more but less than 10,000 45 percent
10,000 or more but less than 15,000 55 percent
15,000 or more but less than 20,000 65 percent
20,000 or more 75 percent

(10) Retention period. A retention (2) Parking fees and tolls attributable (3) If the depreciation component of
period is the period in calendar years to an employee driving the standard auto- periodic fixed payments exceeds the limi-
selected by the payor during which the mobile in connection with the perfor- tations in section 8.04(2) of this revenue
payor expects an employee to drive a mance of services as an employee of the procedure, that section will be treated as
standard automobile in connection with employer are not included in fixed and satisfied in any year during which the
the performance of services as an operating costs and may be deducted as total annual amount of the periodic fixed
employee of the employer before the separate items. Similarly, interest relating payments and the periodic variable pay-
automobile is replaced. Such period may to the purchase of the standard automo- ments made to an employee driving 80
not be less than two calendar years. bile may be deducted as a separate item, percent of the annual business mileage of
(11) Retention mileage. Retention but only to the extent that the interest is the standard automobile does not exceed
mileage is the annual mileage multiplied an allowable deduction under § 163. the amount obtained by multiplying 80
by the number of calendar years in the .04 Depreciation. percent of the annual business mileage of
retention period. (1) A FAVR allowance may not be the standard automobile by the applicable
(12) Residual value. The residual value paid with respect to an automobile for business standard mileage rate for that
of a standard automobile is the projected which the employee has (a) claimed year (see, for example, section 5.01 of
amount for which it could be sold at the
depreciation using a method other than this revenue procedure).
end of the retention period after being
straight-line for its estimated useful life, (4) The depreciation included in each
driven the retention mileage. The Service
(b) claimed a § 179 deduction, or (c) used periodic fixed payment portion of a
will accept the following safe harbor
the Accelerated Cost Recovery System FAVR allowance paid with respect to an
residual values for a standard automobile
(ACRS) under former § 168 or the Modi- automobile will reduce the basis of the
computed as a percentage of the standard
automobile cost: fied Accelerated Cost Recovery System automobile (but not below zero) in
(MACRS) under current § 168. If an determining adjusted basis as required by
employee uses actual costs for an owned § 1016. See section 8.07(2) of this rev-
Retention period Residual value
automobile that has been covered by a enue procedure for the requirement that
2-year 70 percent FAVR allowance, the employee must use the employer report the depreciation com-
3-year 60 percent straight-line depreciation for the automo- ponent of a periodic fixed payment to the
4-year 50 percent bile’s remaining estimated useful life employee.
(subject to the applicable depreciation .05 FAVR allowance limitations.
.03 FAVR allowance in lieu of operat-
deduction limitations under § 280F). (1) A FAVR allowance may be paid
ing and fixed costs.
(1) A reimbursement computed using a (2) Except as provided in section only to an employee who substantiates to
FAVR allowance is in lieu of the employ- 8.04(3) of this revenue procedure, the the payor for a calendar year at least
ee’s deduction of all the operating and total amount of the depreciation compo- 5,000 miles driven in connection with the
fixed costs paid or incurred by an nent for the retention period taken into performance of services as an employee
employee in driving the automobile in account in computing the periodic fixed of the employer or, if greater, 80 percent
connection with the performance of ser- payments for that retention period may of the annual business mileage of that
vices as an employee of the employer, not exceed the excess of the standard FAVR allowance. If the employee is cov-
except as provided in section 9.06 of this automobile cost over the residual value of ered by the FAVR allowance for less than
revenue procedure. Such items as depre- the standard automobile. In addition, the the entire calendar year, these limits may
ciation (or lease payments), maintenance total amount of such depreciation compo- be prorated on a monthly basis.
and repairs, tires, gasoline (including all nent may not exceed the sum of the (2) A FAVR allowance may not be
taxes thereon), oil, insurance, license and annual § 280F limitations on depreciation paid to a control employee (as defined in
registration fees, and personal property (in effect at the beginning of the retention § 1.61–21(f)(5) and (6), excluding the
taxes are included in operating and fixed period) that apply to the standard automo- $100,000 limitation in paragraph
costs for this purpose. bile during the retention period. (f)(5)(iii)).
November 26, 2001 534 2001–48 I.R.B.
(3) At no time during a calendar year insurance coverage limits on the automo- be treated as covered by any FAVR allow-
may a majority of the employees covered bile, (c) the odometer reading of the auto- ance of the payor during the period of
by a FAVR allowance be management mobile, (d) if owned, the purchase price such failure. Nevertheless, the expenses
employees. of the automobile or, if leased, the price to which that mileage allowance relates
(4) At all times during a calendar year at which the automobile is ordinarily sold may be deemed substantiated using the
at least five employees of an employer by retailers (the gross capitalized cost of method described in sections 5, 9.01(1),
must be covered by one or more FAVR the automobile), and (e) if owned, and 9.02 of this revenue procedure to the
allowances. whether the employee has claimed depre- extent the requirements of those sections
(5) A FAVR allowance may be paid ciation with respect to the automobile are met.
only with respect to an automobile (a) using any of the depreciation methods
owned or leased by the employee receiv- prohibited by section 8.04(1) of this rev- SECTION 9. APPLICATION
ing the payment, (b) the cost of which, enue procedure or, if leased, whether the
when new, is at least 90 percent of the employee has computed deductible busi- .01 If a payor pays a mileage allow-
standard automobile cost taken into ness expenses with respect to the automo- ance in lieu of reimbursing actual trans-
account for purposes of determining the bile using actual expenses. The informa- portation expenses incurred or to be
FAVR allowance for the first calendar tion described in (a), (b), and (c) of the incurred by an employee, the amount of
year the employee receives the allowance preceding sentence also must be supplied the expenses that is deemed substantiated
with respect to that automobile, and (c) by the employee to the payor within 30 to the payor is either:
the model year of which does not differ days after the beginning of each calendar (1) for any mileage allowance other
from the current calendar year by more year that the employee’s automobile is than a FAVR allowance, the lesser of the
than the number of years in the retention covered by a FAVR allowance. amount paid under the mileage allowance
period. .07 Payor recordkeeping and report- or the applicable standard mileage rate in
(6) A FAVR allowance may not be ing. section 5.01 of this revenue procedure
paid with respect to an automobile leased (1) The payor or its agent must main- multiplied by the number of business
by an employee for which the employee tain written records setting forth (a) the miles substantiated by the employee; or
has used actual expenses to compute the statistical data and projections on which (2) for a FAVR allowance, the amount
deductible business expenses of the auto- the FAVR allowance payments are based, paid under the FAVR allowance less the
mobile for any year during the entire and (b) the information provided by the sum of (a) any periodic variable rate pay-
lease period. For a lease commencing on employees pursuant to section 8.06 of this ment that relates to miles in excess of the
or before December 31, 1997, the “entire revenue procedure. business miles substantiated by the
lease period” means the portion of the (2) Within 30 days of the end of each employee and that the employee fails to
lease period (including renewals) remain- calendar year, the employer must provide return to the payor although required to
ing after that date. each employee covered by a FAVR allow- do so, (b) any portion of a periodic fixed
(7) The insurance cost component of a ance during that year with a statement payment that relates to a period during
FAVR allowance must be based on the that, for automobile owners, lists the which the employee is treated as not cov-
rates charged in the base locality for amount of depreciation included in each ered by the FAVR allowance and that the
insurance coverage on the standard auto- periodic fixed payment portion of the employee fails to return to the payor
mobile during the current calendar year FAVR allowance paid during that calen- although required to do so, and (c) any
without taking into account such rate- dar year and explains that by receiving a optional high mileage payments.
increasing factors as poor driving records FAVR allowance the employee has .02 If the amount of transportation
or young drivers. elected to exclude the automobile from expenses is deemed substantiated under
(8) A FAVR allowance may be paid MACRS pursuant to § 168(f)(1). For the rules provided in section 9.01 of this
only to an employee whose insurance automobile lessees, the statement must revenue procedure, and the employee
coverage limits on the automobile with explain that by receiving the FAVR actually substantiates to the payor the ele-
respect to which the FAVR allowance is allowance the employee may not compute ments of time, place (or use), and busi-
paid are at least equal to the insurance the deductible business expenses of the ness purpose of the transportation
coverage limits used to compute the peri- automobile using actual expenses for the expenses in accordance with paragraphs
odic fixed payment under that FAVR entire lease period (including renewals). (b)(2) (travel away from home), (b)(6)
allowance. For a lease commencing on or before (listed property, which includes passenger
.06 Employee reporting. Within 30 December 31, 1997, the “entire lease automobiles and any other property used
days after an employee’s automobile is period” means the portion of the lease as a means of transportation), and (c) of §
initially covered by a FAVR allowance, or period (including renewals) remaining 1.274–5, the employee is deemed to sat-
is again covered by a FAVR allowance if after that date. isfy the adequate accounting requirements
such coverage has lapsed, the employee .08 Failure to meet section 8 require- of § 1.274–5(f), as well as the require-
by written declaration must provide the ments. If an employee receives a mileage ment to substantiate by adequate records
payor with the following information: (a) allowance that fails to meet one or more or other sufficient evidence for purposes
the make, model, and year of the employ- of the requirements of section 8 of this of § 1.274–5(c). See § 1.62–2(e)(1) for
ee’s automobile, (b) written proof of the revenue procedure, the employee may not the rule that an arrangement must require
2001–48 I.R.B 535 November 26, 2001
business expenses to be substantiated to .04 An employee is not required to applicable standard mileage rate multi-
the payor within a reasonable period of include in gross income the portion of a plied by the number of business miles
time. mileage allowance received from a payor substantiated by the employee minus the
.03 An arrangement providing mileage that is less than or equal to the amount amount deemed substantiated under sec-
allowances will be treated as satisfying deemed substantiated under section 9.01 tion 9.01 of this revenue procedure. The
the requirement of § 1.62–2(f)(2) with of this revenue procedure, provided the itemized deduction is subject to the
respect to returning amounts in excess of employee substantiates in accordance 2–percent floor on miscellaneous item-
expenses as follows: with section 9.02. See § 1.274-5(f)(2)(i). ized deductions provided in § 67.
(1) For a mileage allowance other than In addition, such portion of the allowance (2) An employee whose business trans-
a FAVR allowance, the requirement to is treated as paid under an accountable portation expenses with respect to a
return excess amounts will be treated as plan, is not reported as wages or other leased automobile are deemed substanti-
satisfied if the employee is required to compensation on the employee’s Form ated under section 9.01(1) of this revenue
return within a reasonable period of time W–2, and is exempt from the withholding procedure (relating to an allowance other
(as defined in § 1.62–2(g)) any portion of and payment of employment taxes. See than a FAVR allowance) may not claim a
such an allowance that relates to miles of §§ 1.62–2(c)(2) and (c)(4). deduction based on actual expenses
travel not substantiated by the employee, .05 An employee is required to include unless the employee does so consistently
even though the arrangement does not in gross income only the portion of a beginning with the first business use of
require the employee to return the portion mileage allowance received from a payor the automobile after December 31, 1997.
of such an allowance that relates to the that exceeds the amount deemed substan- However, an employee whose business
miles of travel substantiated and that tiated under section 9.01 of this revenue transportation expenses with respect to a
exceeds the amount of the employee’s procedure, provided the employee sub- leased automobile are deemed substanti-
expenses deemed substantiated. For stantiates in accordance with section 9.02 ated under section 9.01(2) of this revenue
example, assume a payor provides an of this revenue procedure. See § 1.274– procedure (relating to a FAVR allowance)
employee an advance mileage allowance 5(f)(2)(ii). In addition, the excess portion may not claim a deduction based on
of $80 based on an anticipated 200 busi- of the allowance is treated as paid under actual expenses.
ness miles at 40 cents per mile (at a time a nonaccountable plan, is reported as .07 An employee may deduct an
wages or other compensation on the amount computed pursuant to section
when the applicable business standard
employee’s Form W–2, and is subject to 5.01 of this revenue procedure only as an
mileage rate is 36.5 cents per mile), and
withholding and payment of employment itemized deduction. This itemized deduc-
the employee substantiates 120 business
taxes. See §§ 1.62–2(c)(3)(ii), (c)(5), and tion is subject to the 2–percent floor on
miles. The requirement to return excess
(h)(2)(i)(B). miscellaneous itemized deductions pro-
amounts will be treated as satisfied if the
.06 vided in § 67.
employee is required to return the portion
(1) Except as otherwise provided in .08 A self-employed individual may
of the allowance that relates to the 80
section 9.06(2) of this revenue procedure deduct an amount computed pursuant to
unsubstantiated business miles ($32) even
with respect to leased automobiles, if the section 5.01 of this revenue procedure in
though the employee is not required to
amount of the expenses deemed substan- determining adjusted gross income under
return the portion of the allowance
tiated under the rules provided in section § 62(a)(1).
($4.20) that exceeds the amount of the
9.01 of this revenue procedure is less than .09 If a payor’s reimbursement or
employee’s expenses deemed substanti- the amount of the employee’s business other expense allowance arrangement
ated under section 9.01 of this revenue transportation expenses, the employee evidences a pattern of abuse of the rules
procedure ($43.80) for the 120 substanti- may claim an itemized deduction for the of § 62(c) and the regulations thereunder,
ated business miles. However, the $4.20 amount by which the business transporta- all payments under the arrangement will
excess portion of the allowance is treated tion expenses exceed the amount that is be treated as made under a nonaccount-
as paid under a nonaccountable plan as deemed substantiated, provided the able plan. Thus, such payments are
discussed in section 9.05. employee substantiates all the business included in the employee’s gross income,
(2) For a FAVR allowance, the require- transportation expenses, includes on Form are reported as wages or other compensa-
ment to return excess amounts will be 2106, Employee Business Expenses, the tion on the employee’s Form W–2, and
treated as satisfied if the employee is deemed substantiated portion of the mile- are subject to withholding and payment of
required to return within a reasonable age allowance received from the payor, employment taxes. See §§ 1.62–2(c)(3),
period of time (as defined in § 1.62–2(g)), and includes in gross income the portion (c)(5), and (h)(2).
(a) the portion (if any) of the periodic (if any) of the mileage allowance received
variable payment received that relates to from the payor that exceeds the amount SECTION 10. WITHHOLDING AND
miles in excess of the business miles sub- deemed substantiated. See § 1.274– PAYMENT OF EMPLOYMENT
stantiated by the employee, and (b) the 5(f)(2)(iii). However, for purposes of TAXES.
portion (if any) of a periodic fixed pay- claiming this itemized deduction, substan-
ment that relates to a period during which tiation of the amount of the expenses is .01 The portion of a mileage allowance
the employee was not covered by the not required if the employee is claiming a (other than a FAVR allowance), if any,
FAVR allowance. deduction that is equal to or less than the that relates to the miles of business travel
November 26, 2001 536 2001–48 I.R.B.
substantiated and that exceeds the amount amount deemed substantiated under sec- (1) Any periodic variable rate payment
deemed substantiated for those miles tion 9.01(1) of this revenue procedure by that relates to miles in excess of the busi-
under section 9.01(1) of this revenue pro- comparing the total mileage allowance ness miles substantiated by the employee
cedure is subject to withholding and pay- paid for the period to the applicable stan- and that the employee fails to return
ment of employment taxes. See § 1.62– dard mileage rate in section 5.01 of this within a reasonable period, or any portion
2(h)(2)(i)(B). revenue procedure multiplied by the num- of a periodic fixed payment that relates to
(1) In the case of a mileage allowance ber of business miles substantiated by the a period during which the employee is
paid as a reimbursement, the excess employee for the period. Any excess is treated as not covered by the FAVR
described in section 10.01 of this revenue subject to withholding and payment of allowance and that the employee fails to
procedure is subject to withholding and employment taxes no later than the first return within a reasonable period, is sub-
payment of employment taxes in the pay- payroll period following the payroll ject to withholding and payment of
roll period in which the payor reimburses period in which the excess is computed. employment taxes no later than the first
the expenses for the business miles sub- See § 1.62–2(h)(2)(i)(B)(4). payroll period following the end of the
stantiated. See § 1.62–2(h)(2)(i)(B)(2). (4) For example, assume an employer reasonable period. See § 1.62–
(2) In the case of a mileage allowance pays its employees a mileage allowance 2(h)(2)(i)(A).
paid as an advance, the excess described at a rate of 40 cents per mile (when the (2) Any optional high mileage pay-
in section 10.01 of this revenue procedure business standard mileage rate is 36.5 ment is subject to withholding and pay-
is subject to withholding and payment of
cents per mile). The employer does not ment of employment taxes when paid.
employment taxes no later than the first
require the return of the portion of the
payroll period following the payroll
allowance that exceeds the business stan- SECTION 11. EFFECT ON OTHER
period in which the business miles with
dard mileage rate for the business miles DOCUMENTS
respect to which the advance was paid are
substantiated (3.5 cents). In June, the
substantiated. See § 1.62–2(h)(2)(i)(B)(3).
employer advances an employee $200 for Rev. Proc. 2000–48 (2000–49 I.R.B.
If some or all of the business miles with
500 miles to be traveled during the 5702) is hereby superseded for mileage
respect to which the advance was paid are
month. In July, the employee substanti- allowances that are paid both (1) to an
not substantiated within a reasonable
period of time and the employee does not ates to the employer 400 business miles employee on or after January 1, 2002, and
return the portion of the allowance that traveled in June and returns $40 to the (2) with respect to transportation
relates to those miles within a reasonable employer for the 100 business miles not expenses paid or incurred by the
period of time, the portion of the allow- traveled. The amount deemed substanti- employee on or after January 1, 2002.
ance that relates to those miles is subject ated for the 400 miles traveled is $146 Rev. Proc. 2000–48 is also hereby super-
to withholding and payment of employ- and the employee is not required to return seded for purposes of computing the
ment taxes no later than the first payroll the remaining $14. No later than the first amount allowable as a deduction for
period following the end of the reason- payroll period following the payroll transportation expenses paid or incurred
able period. See § 1.62–2(h)(2)(i)(A). period in which the 400 business miles on or after January 1, 2002.
(3) In the case of a mileage allowance traveled are substantiated, the employer
that is not computed on the basis of a must withhold and pay employment taxes DRAFTING INFORMATION
fixed amount per mile of travel (for on $14.
example, a mileage allowance that com- .02 The portion of a FAVR allowance, The principal author of this revenue
bines periodic fixed and variable rate pay- if any, that exceeds the amount deemed procedure is John Trevey of the Office of
ments, but that does not satisfy the substantiated for those miles under sec- Associate Chief Counsel (Income Tax and
requirements of section 8 of this revenue tion 9.01(2) of this revenue procedure is Accounting). For further information
procedure), the payor must compute peri- subject to withholding and payment of regarding this revenue procedure, contact
odically (no less frequently than quar- employment taxes. See § 1.62– Mr. Trevey at (202) 622–4970 (not a toll-
terly) the amount, if any, that exceeds the 2(h)(2)(i)(B). free call).

2001–48 I.R.B 537 November 26, 2001


Part IV. Items of General Interest
Notice of Proposed hearing, Guy Traynor (202) 622–7180 do not apply to these regulations, and,
Rulemaking (not toll-free numbers). because the proposed rule does not
impose a collection of information on
SUPPLEMENTARY INFORMATION: small entities, a Regulatory Flexibility
Conforming Amendments to
Analysis is not required. Pursuant to sec-
Section 446 Background and Explanation tion 7805(f) of the Internal Revenue
Code, these regulations will be submitted
REG–125161–01 On July 18, 1995, the Treasury and
to the Chief Counsel for Advocacy of the
the IRS published in the Federal Regis-
Small Business Administration for com-
AGENCY: Internal Revenue Service ter (60 FR 36671 [1995–2 C.B. 147])
ment on their impact on small business.
(IRS), Treasury. final regulations under §1.1502–13 gov-
erning the intercompany transaction sys- Comments and Public Hearing
ACTION: Notice of proposed rulemak- tem of the consolidated return regula-
ing. tions. Included in such regulations was an Before these proposed regulations are
express statement that “[t]he timing adopted as final regulations, consideration
SUMMARY: On July 18, 1995, the Trea- rules of [the intercompany transaction will be given to any written comments (a
sury and the IRS published final regula- regulations] are a method of accounting
signed original and eight (8) copies) or
tions governing the intercompany transac- for intercompany transactions, to be
electronic comments that are timely sub-
tion system of the consolidated return applied by each member in addition to
mitted to the IRS. All comments will be
regulations. Those regulations state that the member’s other methods of account-
made available for public inspection and
the timing rules of the intercompany ing.” § 1.1502–13(a)(3)(i). At the time of
copying. A public hearing may be sched-
transaction system are a method of the publication of those final regula-
uled if requested in writing by any person
accounting. At the time of the publication tions, no amendment was made to the
that timely submits written comments. If
of those regulations, no amendment was regulations promulgated under section
446 to coordinate with the statement in a public hearing is scheduled, notice of
made to the regulations promulgated
§ 1.1502–13(a)(3)(i) that the timing rules the date, time, and place for the hearing
under section 446 to coordinate with that
of § 1.1502–13 are a method of account- will be published in the Federal Regis-
statement. This document contains pro-
posed regulations confirming that the tim- ing. ter.
ing rules of the intercompany transaction In General Motors v. Commissioner,
Drafting Information
regulations are a method of accounting. 112 T.C. 270 (1999), the Tax Court
determined that the timing rule of former
The principal author of these proposed
DATES: Written or electronic comments § 1.1502–13(b)(2) was not a method of
accounting for purposes of section 446(e). regulations is Marie C. Milnes-Vasquez,
and requests for a public hearing must be
The proposed regulations included in this Office of the Associate Chief Counsel
received by January 7, 2002.
document amend § 1.446–1 to confirm (Corporate). However, other personnel
the IRS’s position that the timing rules of from the IRS and Treasury Department
ADDRESSES: Send submissions to:
CC:ITA:RU, room 5226 (REG–125161– current §1.1502–13 are a method of participated in their development.
01), Internal Revenue Service, POB 7604, accounting.
Ben Franklin Station, Washington, DC * * * * *
20044. Submissions may also be hand Proposed Effective Date
delivered Monday through Friday Proposed Amendments to the
between the hours of 8 a.m. and 5 p.m. The regulations in this section are pro- Regulations
to: CC:ITA:RU, room 5226 (REG– posed to apply to consolidated return
125161–01), Courier’s Desk, Internal years beginning on or after November 7, Accordingly, 26 CFR part 1 is pro-
Revenue Service, 1111 Constitution 2001. posed to be amended as follows:
Avenue, NW, Washington, DC. Alterna-
tively, taxpayers may submit comments Special Analyses PART 1 — INCOME TAXES
electronically via the Internet directly to
the IRS internet site at http://www.irs.gov/ It has been determined that this notice Paragraph 1. The authority citation for
tax_/regs/regslist.html. of proposed rulemaking is not a signifi- part 1 continues to read in part as follows:
cant regulatory action as defined in Authority: 26 U.S.C. 7805 ***
FOR FURTHER INFORMATION Executive Order 12866. Therefore, a Par. 2. Section 1.446–1 is amended by
CONTACT: Concerning the regulation, regulatory assessment is not required. It adding paragraph (c)(2)(iii) to read as fol-
Marie C. Milnes-Vasquez or Frances also has been determined that section lows:
Kelly (202) 622–7770, or Jeffery G. 553(b) of the Administrative Procedure
Mitchell (202) 622–4930; concerning Act (5 U.S.C. chapter 5) and the Regula- § 1.446-1 General rule for methods of
submissions and/or requests for a public tory Flexibility Act (5 U.S.C. chapter 6) accounting.
November 26, 2001 538 2001–48 I.R.B.
***** (i) * * * See §1.1502-17 and, with Announcement 2001–115
(c) *** regard to consolidated return years begin-
(2) *** ning on or after November 7, 2001, The IRS has released new Form
(iii) The timing rules of §1.1502–13 §1.446-1(c)(2)(iii). * * * 8038–R, Request for Recovery of Over-
are a method of accounting for intercom- payments Under Arbitrage Rebate Provi-
pany transactions (as defined in *****
sions. Form 8038–R replaces the proce-
§ 1.1502–13(b)(1)(i)), to be applied by dures of Revenue Procedure 92–83
Robert E. Wenzel,
each member of a consolidated group in (1992–2 C.B. 487) the purpose of which
Deputy Commissioner
addition to the member’s other methods was to provide guidance to issuers of tax-
of Internal Revenue.
of accounting. See §1.1502–13(a)(3)(i). exempt bonds who seek to recover over-
This paragraph is applicable to consoli- payments of amounts required to be paid
dated return years beginning on or after (Filed by the Office of the Federal Register on under section 148.
November 7, 2001. November 6, 2001, 8:45 a.m., and published in the You can obtain Form 8038–R by tele-
issue of the Federal Register for November 7, 2001, phone or by using IRS electronic infor-
***** 66 F.R. 56262)
Par. 3. In §1.1502-13, the second sen- mation services.
tence of paragraph (a)(3)(i) is revised to
read as follows:
New Form 8038–R, Request
§1.1502–13 Intercompany transactions. for Recovery of
(a) * * * Overpayments Under
(3) * * * Arbitrage Rebate Provisions

Request by Number or address

Telephone 1-800-TAX-FORM
(1-800-829-3676)
Personal Computer:

IRS Web Site www.irs.gov


File transfer protocol ftp.irs.gov

IRS and The George breaking issues and present key perspec- • Updates on Inbound Issues,
Washington University To tives on new developments. The Institute • Selected Transfer Pricing Issues and
Sponsor Institute on will open with an address by B. John Wil- • Managing Multinationals’ International
liams, Jr., IRS Chief Counsel nominee. Tax Controversies.
International Tax Issues
The first day will also feature sessions on Mark A. Weinberger, Assistant Trea-
the following: sury Secretary for Tax Policy, is sched-
Announcement 2001–116 • Moving from CFCs to CFPs: Credit uled to deliver the luncheon address. The
and Deferral Issues in the Partnership second day will also include an “Ask the
Director, International, LMSB, Carol
Setting; IRS” panel.
Dunahoo, has announced the Fourteenth
• Le Partnership: Coordinating Foreign Those interested in attending or
Annual Institute on Current Issues in
and U.S. Taxation of Partnerships; obtaining more information should con-
International Taxation, jointly sponsored
by the Internal Revenue Service and The • Evolution of Business Form: Hybrids, tact The George Washington University,
George Washington University, to be held Contractual Ventures, Etc.; and Conference Management Services, by
on December 13 and 14, 2001, at the J.W. • Updates on Outbound Issues. visiting their web site at www.gwu.edu/
Marriott Hotel in Washington, DC. Regis- Competent Authority officials from ~cms/iti14 or by telephone at 202-973-
tration is currently underway for the Insti- France, Canada, Japan, and the United 1110.
tute, which is intended for professionals States will discuss current issues. R.
in international tax law. Glenn Hubbard, Chairman of the White
The program will present a unique House’s Council of Economic Advisors,
opportunity for top IRS and Treasury offi- will deliver the luncheon address.
cials and tax experts, as well as leading The second day will focus on such
private sector specialists, to address topics as:
2001–48 I.R.B 539 November 26, 2001
Foundations Status of Certain Belagana Research Institute, Tucson, AZ Crossroads Treatment Center,
Organizations Bells Palsy Research Foundation, Sparks, NV
Tucson, AZ Dead Printers Society, Phoenix, AZ
Announcement 2001–118 Beneficial Care, Incorporated, Decker Lake Wetlands Preserve
Murray, UT Foundation, Salt Lake City, UT
Beyond X Harambee Museum and Deer Valley Spiritline Booster Club,
The following organizations have
Cultural Center, Murray, UT Glendale, AZ
failed to establish or have been unable to
Blue Mountain Demonstration Forest, Diamond Magic, Spokane, WA
maintain their status as public charities or
Port Angeles, WA Directions in Education Training and
as operating foundations. Accordingly,
grantors and contributors may not, after Border K-9 Search and Rescue, Inc., Consultation, Gig Harbor, WA
this date, rely on previous rulings or des- Las Cruces, NM Disease Prevention Program, Roy, UT
ignations in the Cumulative List of Orga- Brianne Kiner Foundation for Divine Mercy Foundation, Tacoma, WA
nizations (Publication 78), or on the pre- Exceptional Parents & Children, Dolphin Institute, Seattle, WA
sumption arising from the filing of Edmonds, WA Door of Hope Ministries,
notices under section 508(b) of the Code. Brolly Arts, Salt Lake City, UT Bellingham, WA
This listing does not indicate that the Camano Ranch, Camano Island, WA Double Camp Ministries, Glendale, AZ
organizations have lost their status as Camwood Players, Stanwood, WA Earth Spirit Wholeness Center,
organizations described in section Caribou Trail Housing Association, Tahotchi, NM
501(c)(3), eligible to receive deductible Okanogan, WA Earth Views Center for Ecosystem
contributions. Caughlin Ranch School Foundation, Mapping and Monitoring,
Former Public Charities. The follow- Reno, NV Santa Fe, NM
ing organizations (which have been Center for Entrpreneurship and Eclectic Cross Foundation,
treated as organizations that are not pri- Economic Development, Inc., Las Vegas, NV
vate foundations described in section Albuquerque, NM Ed Rimer Ministries, Inc.,
509(a) of the Code) are now classified as Central Area Coaches Association, Albuquerque, NM
private foundations: Seattle, WA Edison Foundation, Seattle, WA
Children and Adults Affected by Edmonds Floral and Arts Foundation,
1st Class, Ridgefield, WA Pesticides, Santa Fe, NM Edmonds, WA
12 Steps on the Way Home, Children’s Dignity Project Foundation, El Pesebre, Inc., Green Valley, AZ
Arlington, WA Inc., Santa Fe, NM Empathology Research Foundation,
Aaron A. Hofmann Foundation, Inc., Childrens Recording Corporation, Inc., Bellevue, WA
Salt Lake City, UT Park City, UT Entiat Valley Service Club, Entiat, WA
A B A Foundation, Inc., Phoenix, AZ Christian Outreach Assembly for Evergreen Clown Care, Orting, WA
Ace Foundation, Pleasant Grove, UT Children, Monroe, WA Familia of Seattle, Mercer Island, WA
AC-Tec, Everett, WA Cinema Concepts Foundation, Family Mental Health Clinic,
Adelante Housing Corporation, Scottsdale, AZ Las Cruces, NM
Surprise, AZ Citizens 911 Guide to Democracy, Fast Forward Media Lab, Seattle, WA
All Related Extended Care Services, Seattle, WA Fillmore Housing Corporation,
Inc., Phoenix, AZ Clark County Housing Affordability Phoenix, AZ
Allied Services for Aids Prevention, Consortium, Las Vegas, NV Flag Children Services, Inc.,
Las Vegas, NV Coalition for Community Development, Glendale, AZ
Ammpec, Inc., Albuquerque, NM Seattle, WA Fork in the Road, Inc., Tucson, AZ
Arizona Archival Institute, Inc., Comhaltas Ceoltoiri Eireann, Foundation for Colorectal Surgical
Glendale, AZ Albuquerque, NM Education, Seattle, WA
Arizona Citizens Project, Scottsdale, AZ Community Advocates Aligned to Unite Foundation for Law Enforcement
Arizona Jazz Rhythm & Blues Festival, Ethnic Social Services, Kent, WA Education and Training, Inc.,
Inc., Flaggstaff, AZ Community Built Association, Inc., Phoenix, AZ
Arizona Junior Ski Racing Association, Alamogordo, NM Friends of Garfield Foundation,
Phoenix, AZ Companion Care, Inc., Provo, UT Seattle, WA
Arizona Lawyers Committee on Computer Outreach, Phoenix, AZ Friends of the Adelson Drug Clinic, Inc.,
Violence, Oro Valley, AZ Copeland-Freeman Foundation, Las Vegas, NV
Arizona Minority Counsel Program, Inc., Mesa, AZ Gamblers at Their End Society,
Chandler, AZ Cops Racing Against Violence Through Graham, WA
Arizona Rising Suns Track Club, Inc., Education, Las Vegas, NV Gateway Estates, Inc., Silver City, NM
Glendale, AZ Cornerstone Christian Counseling, Get High on Life-Be Dear to Yourself,
Arizona Youth Theater, Inc., Tucson, AZ Tucson, AZ Inc., Las Vegas, NV
Back-on-Track, Inc., Phoenix, AZ County Line Riders of Catalina, Inc., Gods Little Creatures Foundation,
Begin Again Foundation, Phoenix, AZ Tucson, AZ Seattle, WA
November 26, 2001 540 2001–48 I.R.B.
Golden Hills Neighborhood Association, Lead International Ministry Network, NW River Ecology, Spokane, WA
Salt Lake City, UT Vancouver, WA Open Gates Ministries , Yuma, AZ
Golden League Association, Kent, WA Legacy Foundation, Inc., Phoenix, AZ Options for Youth Families and
Goldendale Education Fund, Leonard Bolar Foundation, Tacoma, WA Communities, Inc., Logan, UT
Goldendale, WA Lewis & Clark Bicentennial Seaplane Organization Latins Unidos,
Granny-Nanny Caregivers, Inc., Rendezvous Committee, Vashon, WA Albuquerque, NM
Reno, NV Light Foundation, Inc., Organization of Positive Thought and
Gratitude Fellowship, Salt Lake City, UT Salt Lake City, UT Action, Mesa, AZ
Great Basin National Feline Found, Light to the Nations, Wasilla, AK Pathway to Freedom Counseling Center,
Fallon, NV Malcom Harris Memorial Educational Inc., Tucson, AZ
Grey Hound Friends Northwest, Enrichment Trust, Phoenix, AZ Peak at Santa Teresa, Santa Teresa, NM
Issaquah, WA Mannings Child Care Learning Center, Percussion for Kids Association,
Harp, Inc., Glendale, AZ Seattle, WA Seattle, WA
Healthy Start Infants Home, Marine View Homes Association, Personal Credit Assistance, Inc.,
Deer Park, WA Federal Way, WA Carson City, NV
Heartpraise Music Association, Marshall-David Library, Tucson, AZ Pierce Housing Corporation,
Vancouver, WA Mesa American Youth Football, Inc., Phoenix, AZ
Help Ministries, Inc., Scottsdale, AZ Mesa, AZ Post-Recovery Aid Foundation,
Herdas Bicycle Club, Las Vegas, NV Mighty River Evangelistic Association, Federal Way, WA
Hispanic Historical Society, Inc., Inc., Albuquerque, NM Power to Cope-Missionary Health
Albuquerque, NM Mobile Caterer for the Homeless, Restoration Work, Spokane, WA
Hope for Coap, Spokane, WA Seattle, WA
Pro Homo Arts, Seattle, WA
Hosanna Ministries International, Mobile Community Council for
Professionals Helping Amputees Train,
Henderson, NV Progress, Inc., Maricopa, AZ
Inc., Tucson, AZ
Howard Memorial Mission, Inc., Mother of Mercy Chapel,
Recycling Insight, Everett, WA
Glendale, AZ Coulee City, WA
Resources United for Supportive
Impact Foundation, Salt Lake City, UT My Brothers Resource Center,
Services, Blaine, WA
Independent Technicians Education Casa Grande, AZ
Rialto Foundation, Tucson, AZ
Coalition, Tukwila, WA National American Indian Diabetes
Rising Star Communications of the
Institute for International Economic Association, Sacramento, CA
Pacific Northwest, Inc.,
Education, Mercer Island, WA Native American Fish & Wildlife
Kennewick, WA
International Society for Integrated Society, Broomfield, CO
Human Development and Universal Native Americas International Film Robbins Housing Corp , Santaquin, UT
Peace, West Valley City, UT Exposition, Santa Fe, NM Rocky Mountain Band of Cherokee
Inventors Association of Arizona, NDN Productions, Inc., Descendants, Sandy, UT
Tucson, AZ Albuquerque, NM Safe Passage, Sedro Wooley, WA
Irish Pipers Club, Seattle, WA Neighborhood Ice and Recreation San Jose Community Center,
Jackson High Booster Club, Everett, WA Development Fund, Inc., San Jose, NM
JASNET, Seattle, WA Salt Lake City, UT San Juan Resident Committee,
Jewish Council For HIV-AIDS, Inc., New Exodus Ministries, Inc., Mesa, AZ San Juan Pueblo, NM
Phoenix, AZ New Mexico Vietnam Veterans Sanctuary for Enlightened Action, Inc.,
Jimi Hendrix Family Foundation, Foundation, Inc., Albuquerque, NM Montpelier, VA
Tukwila, WA New Shiprock Campus Committee, Inc., Santa Fe High School Football Booster
Jonathon Turner Trauma Foundation, Shiprock, NM Association, Inc., Sante Fe, NM
Incline Village, NV Nibbana Foundation, Corrales, NM Santa Fe Institute for Medicine &
Kandy Productions Company, Inc., Nicholas Group, Seattle, WA Prayer, Sante Fe, NM
Scottsdale, AZ Nighthawk, Santa Fe, NM Scottsdale Childrens Nature Center for
King County Samoan Organizing Noah 2 Northern Navajo Organization Science & Education, Scottsdale, AZ
Project, Seattle, WA for the Advancement of Animal Health Sedro-Woolley Playfield Association,
Kingdom Giving Foundation, & Humanity, Shiprock, NM Sedro Woolley, WA
Bellingham, WA Noahs Ark Animal Refuge, Inc., Shield Ministries, Kennewick, WA
Kings Kids Day Care, Inc., Carlsbad, NM Shiprock Community Development
Roswell, NM North High School Alumni Association, Corporation, Shiprock, NM
Kylies Project, Bellingham, WA Phoenix, AZ Sierra Vista Ballet Company,
La Jicarita Enterprise Communities, North Snohomish County Boxing Club, Sierra Vista, AZ
Penasco, NM Arlington, WA Sigma Tau Sigma, Las Vegas, NV
Laughing Horse Productions, Northwest Tasar Association, Bow, WA Sonja L Harrison Foundation for
Seattle, WA Nurses for Christ, Kingman, AZ Seniors, Bothell, WA

2001–48 I.R.B 541 November 26, 2001


Sons of Haiti Manor Housing United States Freestyle Ski Team, Inc., Wings Foundation, Tucson, AZ
Association, Seattle, WA Salt Lake City, UT Wings of Love Ministries, Tukwila, WA
Sons of Haiti Senior Housing Utah Hispanic Womens Association, Womens Resource Center,
Association, Seattle, WA Inc., Mountain Green, UT Carson City, NV
South Asia Cultural Association, Valdez Swim Club, Inc., Valdez, AK Worldwide Cultural Exchange, Inc.,
Spokane, WA Valley Crossroads, Inc., Sedona, AZ
South Pacific County Cliff Rescue, Salt Lake City, UT Y.A.F.D.A. Youth Away From Drugs and
Seaview, WA Venturi Foundation, Sun City, AZ Alcohol, Moses Lake, WA
Southern Oregon Hockey Association, Visions World Productions, Inc., Young at Heart Ministries,
Inc., Medford, OR Phoenix, AZ Albuquerque, NM
Stephen Christopher Foundation, Inc., Walla Walla Blues Associations, Zion Temple Ashram Community, Inc.,
Scottsdale, AZ Walla Walla, WA Tucson, AZ
Super Kids of America, Springville, UT Wardley Foundation, Inc., Zolo Foundation, Gold Canyon, AZ
Tacoma Empowerment Consortium, Salt Lake City, UT
Tacoma, WA Warren and Jolene Young Ministries, If an organization listed above submits
Theatre Southwest, Inc., Sun City West, AZ information that warrants the renewal of
Albuquerque, NM Washington Higher Education Policy its classification as a public charity or as
Therapeutic Living Concept-Message Center, Olympia, WA a private operating foundation, the Inter-
Therapy for People With AIDS, Washington State Council of Firefighters nal Revenue Service will issue a ruling or
Everett, WA Benevolent Fund, Olympia, WA determination letter with the revised clas-
Threshold House, Mesa, AZ Washington Waterfowl Association, sification as to foundation status. Grant-
Tohatchi Youth Center, Tohatchi, NM Edmonds, WA ors and contributors may thereafter rely
Tseikiin Community Development Wellspring Womens Center, upon such ruling or determination letter
Corporation, Ramah, NM Sacramento, CA as provided in section 1.509(a)–7 of the
Tucson Marriage Encounter, Inc., West Bountiful Little League Baseball, Income Tax Regulations. It is not the
Tucson, AZ West Bountiful, UT practice of the Service to announce such
Tucson Mormon Battalion Monument West Jordan Municipal Soccer Authority revised classification of foundation status
Foundation, Tucson, AZ Incorporated, West Jordan, UT in the Internal Revenue Bulletin.

November 26, 2001 542 2001–48 I.R.B.


Definition of Terms
Revenue rulings and revenue procedures applies to both A and B, the prior rul- new ruling does more than restate the
(hereinafter referred to as “rulings”) that ing is modified because it corrects a substance of a prior ruling, a combination
have an effect on previous rulings use the published position. (Compare with ampli- of terms is used. For example, modified
following defined terms to describe the fied and clarified, above). and superseded describes a situation
effect: Obsoleted describes a previously pub- where the substance of a previously pub-
Amplified describes a situation where lished ruling that is not considered deter- lished ruling is being changed in part and
no change is being made in a prior pub- minative with respect to future transac- is continued without change in part and it
lished position, but the prior position is tions. This term is most commonly used is desired to restate the valid portion of
being extended to apply to a variation of in a ruling that lists previously published the previously published ruling in a new
the fact situation set forth therein. Thus, if rulings that are obsoleted because of ruling that is self contained. In this case
an earlier ruling held that a principle changes in law or regulations. A ruling the previously published ruling is first
applied to A, and the new ruling holds may also be obsoleted because the sub- modified and then, as modified, is super-
that the same principle also applies to B, stance has been included in regulations seded.
the earlier ruling is amplified. (Compare subsequently adopted. Supplemented is used in situations in
with modified, below). Revoked describes situations where the which a list, such as a list of the names of
Clarified is used in those instances position in the previously published rul- countries, is published in a ruling and that
where the language in a prior ruling is ing is not correct and the correct position list is expanded by adding further names
being made clear because the language is being stated in the new ruling. in subsequent rulings. After the original
has caused, or may cause, some confu- Superseded describes a situation where ruling has been supplemented several
sion. It is not used where a position in a the new ruling does nothing more than times, a new ruling may be published that
prior ruling is being changed. restate the substance and situation of a includes the list in the original ruling and
Distinguished describes a situation previously published ruling (or rulings). the additions, and supersedes all prior rul-
where a ruling mentions a previously Thus, the term is used to republish under ings in the series.
published ruling and points out an essen- the 1986 Code and regulations the same Suspended is used in rare situations to
tial difference between them. position published under the 1939 Code show that the previous published rulings
Modified is used where the substance and regulations. The term is also used will not be applied pending some future
of a previously published position is when it is desired to republish in a single action such as the issuance of new or
being changed. Thus, if a prior ruling ruling a series of situations, names, etc., amended regulations, the outcome of
held that a principle applied to A but not that were previously published over a cases in litigation, or the outcome of a
to B, and the new ruling holds that it period of time in separate rulings. If the Service study.

Abbreviations
The following abbreviations in current E.O.—Executive Order. PHC—Personal Holding Company.
use and formerly used will appear in ER—Employer. PO—Possession of the U.S.
ERISA—Employee Retirement Income Security PR—Partner.
material published in the Bulletin. Act. PRS—Partnership.
EX—Executor. PTE—Prohibited Transaction Exemption.
A—Individual.
F—Fiduciary. Pub. L.—Public Law.
Acq.—Acquiescence.
FC—Foreign Country. REIT—Real Estate Investment Trust.
B—Individual.
FICA—Federal Insurance Contributions Act. Rev. Proc—Revenue Procedure.
BE—Beneficiary.
FISC—Foreign International Sales Company. Rev. Rul.—Revenue Ruling.
BK—Bank.
FPH—Foreign Personal Holding Company. S—Subsidiary.
B.T.A.—Board of Tax Appeals.
FR—Federal Register. S.PR.—Statements of Procedural Rules.
C—Individual.
FUTA—Federal Unemployment Tax Act. Stat—Statutes at Large.
C.B.—Cumulative Bulletin.
FX—Foreign Corporation. T—Target Corporation.
CFR—Code of Federal Regulations.
G.C.M.—Chief Counsels Memorandum. T.C.—Tax Court.
CI—City.
GE—Grantee. T.D.—Treasury Decision.
COOP—Cooperative.
GP—General Partner. TFE—Transferee.
Ct.D.—Court Decision.
GR—Grantor. TFR—Transferor.
CY—County.
IC—Insurance Company. T.I.R.—Technical Information Release.
D—Decedent.
I.R.B.—Intemal Revenue Bulletin. TP—Taxpayer.
DC—Dummy Corporation.
LE—Lessee. TR—Trust.
DE—Donee.
LP—Limited Partner. TT—Trustee.
Del. Order—Delegation Order.
LR—Lessor. U.S.C.—United States Code.
DISC—Domestic International Sales Corporation.
M—Minor. X—Corporation.
DR—Donor.
Nonacq.—Nonacquiescence. Y—Corporation.
E—Estate.
O—Organization. Z—Corporation
EE—Employee.
P—Parent Corporation.

2001–48 I.R.B i November 26, 2001


Numerical Finding List1 Notices: Revenue Procedures—Continued

Bulletins 2001–27 through 2001–47 2001–39, 2001–27 I.R.B. 3 2001–48, 2001–40 I.R.B. 308
2001–41, 2001–27 I.R.B. 2 2001–49, 2001–39 I.R.B. 300
Announcements: 2001–42, 2001–30 I.R.B. 70 2001–50, 2001–43 I.R.B. 437
2001–43, 2001–30 I.R.B. 72 2001–51, 2001–43 I.R.B. 369
2001–69, 2001–27 I.R.B. 23 2001–44, 2001–30 I.R.B. 77 2001–52, 2001–46 I.R.B. 491
2001–70, 2001–27 I.R.B. 23 2001–45, 2001–33 I.R.B. 129 2001–53, 2001–47 I.R.B. 506
2001–71, 2001–27 I.R.B. 26 2001–46, 2001–32 I.R.B. 122
2001–47, 2001–36 I.R.B. 212 Revenue Rulings:
2001–72, 2001–28 I.R.B. 39
2001–73, 2001–28 I.R.B. 40 2001–48, 2001–33 I.R.B. 130
2001–49, 2001–34 I.R.B. 188 2001–30, 2001–29 I.R.B. 46
2001–74, 2001–28 I.R.B. 40 2001–33, 2001–32 I.R.B. 118
2001–50, 2001–3 4 I.R.B. 189
2001–75, 2001–28 I.R.B. 42 2001–34, 2001–28 I.R.B. 31
2001–51, 2001–34 I.R.B. 190
2001–76, 2001–29 I.R.B. 67 2001–35, 2001–29 I.R.B. 59
2001–52, 2001–35 I.R.B. 203
2001–77, 2001–30 I.R.B. 83 2001–36, 2001–32 I.R.B. 119
2001–53, 2001–37 I.R.B. 225
2001–78, 2001–30 I.R.B. 87 2001–37, 2001–32 I.R.B. 100
2001–54, 2001–37 I.R.B. 225
2001–79, 2001–31 I.R.B. 97 2001–55, 2001–39 I.R.B. 299 2001–38, 2001–33 I.R.B. 124
2001–80, 2001–31 I.R.B. 98 2001–56, 2001–38 I.R.B. 277 2001–39, 2001–33 I.R.B. 125
2001–81, 2001–33 I.R.B. 175 2001–57, 2001–38 I.R.B. 279 2001–40, 2001–38 I.R.B. 276
2001–82, 2001–32 I.R.B. 123 2001–58, 2001–39 I.R.B. 299 2001–41, 2001–35 I.R.B. 193
2001–83, 2001–35 I.R.B. 205 2001–59, 2001–41 I.R.B. 315 2001–42, 2001–37 I.R.B. 223
2001–84, 2001–35 I.R.B. 206 2001–60, 2001–40 I.R.B. 304 2001–43, 2001–36 I.R.B. 209
2001–85, 2001–36 I.R.B. 219 2001–61, 2001–40 I.R.B. 305 2001–44, 2001–37 I.R.B. 223
2001–86, 2001–35 I.R.B. 207 2001–62, 2001–40 I.R.B. 307 2001–45, 2001–42 I.R.B. 323
2001–87, 2001–35 I.R.B. 208 2001–63, 2001–40 I.R.B. 308 2001–46, 2001–42 I.R.B. 321
2001–88, 2001–36 I.R.B. 220 2001–64, 2001–41 I.R.B. 316 2001–47, 2001–39 I.R.B. 293
2001–89, 2001–38 I.R.B. 291 2001–65, 2001–43 I.R.B. 369 2001–48, 2001–42 I.R.B. 324
2001–90, 2001–35 I.R.B. 208 2001–66, 2001–44 I.R.B. 396 2001–49, 2001–41 I.R.B. 312
2001–91, 2001–36 I.R.B. 221 2001–68, 2001–47 I.R.B. 504 2001–50, 2001–43 I.R.B. 343
2001–92, 2001–39 I.R.B. 301 2001–69, 2001–46 I.R.B. 491 2001–51, 2001–45 I.R.B. 427
2001–93, 2001–44 I.R.B. 416 2001–70, 2001–45 I.R.B. 437 2001–52, 2001–45 I.R.B. 434
2001–94, 2001–39 I.R.B. 303 2001–53, 2001–46 I.R.B. 489
2001–95, 2001–39 I.R.B. 303 Proposed Regulations: 2001–54, 2001–46 I.R.B. 490
2001–96, 2001–41 I.R.B. 317 2001–55, 2001–47 I.R.B. 497
2001–97, 2001–40 I.R.B. 310 REG-110311-98, 2001–35 I.R.B. 204 2001–56, 2001–47 I.R.B. 500
2001–98 2001–41 I.R.B. 317 REG-106917-99, 2001–27 I.R.B. 4 2001–57, 2001–46 I.R.B. 488
2001–99 2001–42 I.R.B. 340 REG-103735-00, 2001–35 I.R.B. 204
REG-103736-00, 2001–35 I.R.B. 204 Treasury Decisions:
2001–100, 2001–41 I.R.B. 317
2001–101, 2001–43 I.R.B. 374 REG-107151-00, 2001–43 I.R.B. 370
REG-100548-01, 2001–29 I.R.B. 67 8947, 2001–28 I.R.B. 36
2001–102, 2001–42 I.R.B. 340 8948, 2001–28 I.R.B. 27
REG-106431-01, 2001–37 I.R.B. 272
2001–103, 2001–43 I.R.B. 375 8949, 2001–28 I.R.B. 33
REG-142499-01, 2001–45 I.R.B. 476
2001–104, 2001–43 I.R.B. 376 8950, 2001–28 I.R.B. 34
2001–105, 2001–43 I.R.B. 376 8951, 2001–29 I.R.B. 63
Railroad Retirement Quarterly Rates:
2001–106, 2001–44 I.R.B. 416 8952, 2001–29 I.R.B. 60
2001–107, 2001–44 I.R.B. 419 2001–27, I.R.B. 1 8953, 2001–29 I.R.B. 44
2001–108, 2001–44 I.R.B. 419 2001–41, I.R.B. 314 8954, 2001–29 I.R.B. 47
2001–109, 2001–45 I.R.B. 485 8955, 2001–32 I.R.B. 101
2001–110, 2001–45 I.R.B. 486 Revenue Procedures: 8956, 2001–32 I.R.B. 112
2001–111, 2001–45 I.R.B. 486 8957, 2001–33 I.R.B. 125
2001–112, 2001–46 I.R.B. 494 2001–39, 2001–28 I.R.B. 38 8958, 2001–34 I.R.B. 183
2001–113, 2001–46 I.R.B. 494 2001–40, 2001–33 I.R.B. 130 8959, 2001–34 I.R.B. 185
2001–114, 2001–47 I.R.B. 528 2001–41, 2001–33 I.R.B. 173 8960, 2001–34 I.R.B. 176
2001–42, 2001–36 I.R.B. 212 8961, 2001–35 I.R.B. 194
Court Decisions: 2001–43, 2001–34 I.R.B. 191 8962, 2001–35 I.R.B. 201
2001–44, 2001–35 I.R.B. 203 8963, 2001–35 I.R.B. 197
2070, 2001–31 I.R.B. 90 2001–45, 2001–37 I.R.B. 227 8964, 2001–42 I.R.B. 320
2071, 2001–44 I.R.B. 385 2001–46, 2001–37 I.R.B. 263 8965, 2001–43 I.R.B. 344
2072, 2001–44 I.R.B. 379 2001–47, 2001–42 I.R.B. 332 8966, 2001–45 I.R.B. 422

1
A cumulative list of all revenue rulings, revenue
procedures, Treasury decisions, etc., published in
Internal Revenue Bulletins 2001–1 through 2001–26
is in Internal Revenue Bulletin 2001–27, dated July
2, 2001.

November 26, 2001 ii 2001–48 I.R.B.


Finding List of Current Actions Proposed Regulations—Continued Revenue Procedures–Continued

on Previously Published Items1 REG–107186–00 2001–6


Corrected by Modified by
Bulletins 2001–27 through 2001–47 Ann. 2001–71, 2001–27 I.R.B. 26 Notice 2001–42, 2001–30 I.R.B. 70

Announcements: REG–130477–00 Revenue Rulings:


Supplemented by
2000–48 57–589
Ann. 2001–82, 2001–32 I.R.B. 123
Modified by Obsoleted by
Notice 2001–43, 2001–30 I.R.B. 72 REG–130481–00 REG–106917–99, 2001–27 I.R.B. 4
Supplemented by
Notices: Ann. 2001–82, 2001–32 I.R.B. 123 65–316
Obsoleted by
98–52 Revenue Procedures: REG–106917–99, 2001–27 I.R.B. 4
Modified by
83–74 67–274
Notice 2001–56, 2001–38 I.R.B. 277
Revoked by Amplified by
99–41 Rev. Proc. 2001–49, 2001–39 I.R.B. 300 Rev. Rul. 2001–46, 2001–42 I.R.B. 321
Modified and superseded by 84–84
Notice 2001–62, 2001–38 I.R.B. 307 68–125
Revoked by
Obsoleted by
2001–4 Rev. Proc. 2001–49, 2001–39 I.R.B. 300
REG–106917–99, 2001–27 I.R.B. 4
Modified by 93–27
Notice 2001–43, 2001–30 I.R.B. 72 69–563
Clarified by
Obsoleted by
Rev. Proc. 2001–43, 2001–34 I.R.B. 191
2001–9 REG–106917–99, 2001–27 I.R.B. 4
Modified by 97–13
Notice 2001–46, 2001–32 I.R.B. 122 Modified by 70–379
Rev. Proc. 2001–39, 2001–28 I.R.B. 38 Obsoleted by
2001–15 Rev. Rul. 2001–39, 2001–33 I.R.B. 125
Supplemented by 97–19
Notice 2001–51, 2001–34 I.R.B. 190 Modified by 74–326
Notice 2001–62, 2001–40 I.R.B. 307 Obsoleted by
2001–42 REG–106917–99, 2001–27 I.R.B. 4
Modified by 98–44
Notice 2001–57, 2001–38 I.R.B. 279 Superseded by 78–127
Rev. Proc. 2001–40, 2001–33 I.R.B. 130 Modified by
Proposed Regulations: Rev. Rul. 2001–40, 2001–38 I.R.B. 276
99–27
LR–97–79 Superseded by 78–179
Withdrawn by Rev. Proc. 2001–42, 2001–36 I.R.B. 212 Obsoleted by
REG–100548–01, 2001–29 I.R.B. 67 REG–106917–99, 2001–27 I.R.B. 4
99–49
LR–107–84 Modified and amplified by 89–42
Withdrawn by Rev. Proc. 2001–46, 2001–37 I.R.B. 263 Modified and superseded by
REG–100548–01, 2001–29 I.R.B. 67 2000–20 Rev. Rul. 2001–48, 2001–42 I.R.B. 324
REG–110311–98 Modified by
90–95
Supplemented by Notice 2001–42, 2001–30 I.R.B. 70
Distinguished by
T.D. 8961, 2001–35 I.R.B. 194 2000-28 Rev. Rul. 2001–42, 2001–42 I.R.B. 321
Superseded by
REG–106917–99 92–19
Rev. Proc. 2001-50, 2001-45 I.R.B. 437
Corrected by Supplemented by
Ann. 2001–86, 2001–35 I.R.B. 207 2000–39 Rev. Rul. 2001–38, 2001–33 I.R.B. 124
Corrected by
REG–103735–00 Ann. 2001–73, 2001–28 I.R.B. 40 97–31
Supplemented by Superseded by Modified and superseded by
T.D. 8961, 2001–35 I.R.B. 194 Rev. Proc. 2001–47, 2001–42 I.R.B. 332 Rev. Rul. 2001–48, 2001–42 I.R.B. 324
REG–103736–00 2001–2 Treasury Decisions:
Supplemented by Modified by
T.D. 8961, 2001–35 I.R.B. 194 8948
Rev. Proc. 2001–41, 2001–33 I.R.B. 173
Corrected by
2001–3 Ann. 2001–90, 2001–35 I.R.B. 208
Modified by
Rev. Proc. 2001–51, 2001–43 I.R.B. 369

1
A cumulative list of current actions on previously published
items in Internal Revenue Bulletins 2001–1 through 2001–26 is
in Internal Revenue Bulletin 2001–27, dated July 2, 2001.

2001–48 I.R.B iii November 26, 2001