-
INCOME TAX
REG–209682–94, page 20.Proposed regulations under sections 743,
755, and 1017of the Code provide guidance to partnerships and their
part-ners concerning the optional adjustments to the basis
ofpartnership property, the allocation of basis adjustmentsamong
partnership assets, and the computation of a part-ner’s share of
the adjusted basis of depreciable partnershipproperty.
Rev. Proc. 98–30, page 6.Automobile owners and lessees. This
procedure providesowners and lessees of passenger automobiles
(includingelectric automobiles) with tables detailing the
limitations ondepreciation deductions for automobiles first placed
in ser-vice during calendar year 1998 and the amounts to be
in-cluded in income for automobiles first leased during calen-dar
year 1998. In addition, this revenue procedure providesthe maximum
allowable value of employer-provided automo-biles first made
available to employees for personal use incalendar year 1998 for
which the vehicle cents-per-mile valu-ation rule provided under
section 1.61–21(e) of the IncomeTax Regulations may be
applicable.
EMPLOYEE PLANSNotice 98–24, page 5.Qualified plans; net
unrealized appreciation; capitalgains. This notice describes the
holding period to be usedfor determining the capital gains tax
treatment of net unre-alized appreciation in the distribution of
employer securitiesfrom a qualified plan as a result of section 311
of the Tax-payer Relief Act of 1997, Pub. L. No. 105–34.
EXEMPT ORGANIZATIONSAnnouncement 98–33, page 39.A list is
provided of organizations that no longer qualify as
organizations to which contributions are deductible undersection
170 of the Code.
Announcement 98–34, page 39.A list is given of organizations now
classified as private foun-dations.
ADMINISTRATIVERev. Proc. 98–32, page 11.Information is provided
about the Electronic Federal Tax Pay-ment System (EFTPS) programs
for Batch Filers and Bulk Fil-ers (Filers). EFTPS is an electronic
remittance processingsystem for making federal tax deposits (FTDs)
and federaltax payments (FTPs). The Batch Filer and Bulk Filer
pro-grams are used by Filers for electronically submitting
enroll-ments, FTDs, and FTPs on behalf of multiple taxpayers.
Notice 98–22, page 5.This notice announces that shareholders of
passive foreigninvestment companies may apply the rules of
section1.1295–1T(b)(4), (f), and (g) of the Income Tax
Regulationsto taxable years beginning before January 1, 1998.
Announcement 98–30, page 38.The penalty under section 6677 of
the Code will not be im-posed on a U.S. owner of a foreign trust
for failure to timelyfile if the foreign trust files Form 3520–A
and furnishes therequired statements to the U.S. owners and U.S.
beneficia-ries in accordance with this announcement.
Announcement 98–32, page 39.This announcement withdraws the
notice issued under sec-tion 7428(c) of the Code in Internal
Revenue Bulletin1997–52, dated December 29, 1997, with respect to
theorganization At Cost Services, Inc.
Announcement 98–35, page 40.An updated edition of Publication
954, Tax Incentives for Em-powerment Zones and Other Distressed
Communities (re-vised March 1998), is now available.
Internal Revenue
bbuulllleettiinnBulletin No. 1998–17
April 27, 1998
HIGHLIGHTSOF THIS ISSUEThese synopses are intended only as aids
to the reader inidentifying the subject matter covered. They may
not berelied upon as authoritative interpretations.
Department of the TreasuryInternal Revenue Service
Finding Lists begin on page 43.Announcement of Declaratory
Judgment Proceedings Under Section 7428 begins on page 41.
-
Mission of the Service
The purpose of the Internal Revenue Service is to collectthe
proper amount of tax revenue at the least cost; servethe public by
continually improving the quality of our prod-
ucts and services; and perform in a manner warrantingthe highest
degree of public confidence in our integrity, effi-ciency, and
fairness.
2
Statement of Principlesof Internal RevenueTax AdministrationThe
function of the Internal Revenue Service is to adminis-ter the
Internal Revenue Code. Tax policy for raising revenueis determined
by Congress.
With this in mind, it is the duty of the Service to carry out
thatpolicy by correctly applying the laws enacted by Congress;to
determine the reasonable meaning of various Code provi-sions in
light of the Congressional purpose in enacting them;and to perform
this work in a fair and impartial manner, withneither a government
nor a taxpayer point of view.
At the heart of administration is interpretation of the Code.
Itis the responsibility of each person in the Service, chargedwith
the duty of interpreting the law, to try to find the truemeaning of
the statutory provision and not to adopt astrained construction in
the belief that he or she is “protect-ing the revenue.” The revenue
is properly protected onlywhen we ascertain and apply the true
meaning of the statute.
The Service also has the responsibility of applying
andadministering the law in a reasonable, practical manner.Issues
should only be raised by examining officers whenthey have merit,
never arbitrarily or for trading purposes.At the same time, the
examining officer should never hesi-tate to raise a meritorious
issue. It is also important thatcare be exercised not to raise an
issue or to ask a court toadopt a position inconsistent with an
established Serviceposition.
Administration should be both reasonable and vigorous. Itshould
be conducted with as little delay as possible andwith great
courtesy and considerateness. It should nevertry to overreach, and
should be reasonable within thebounds of law and sound
administration. It should, howev-er, be vigorous in requiring
compliance with law and itshould be relentless in its attack on
unreal tax devices andfraud.
-
The Internal Revenue Bulletin is the authoritative instrumentof
the Commissioner of Internal Revenue for announcing offi-cial
rulings and procedures of the Internal Revenue Serviceand for
publishing Treasury Decisions, Executive Orders, TaxConventions,
legislation, court decisions, and other items ofgeneral interest.
It is published weekly and may be obtainedfrom the Superintendent
of Documents on a subscriptionbasis. Bulletin contents of a
permanent nature are consoli-dated semiannually into Cumulative
Bulletins, which are soldon a single-copy basis.
It is the policy of the Service to publish in the Bulletin all
sub-stantive rulings necessary to promote a uniform applicationof
the tax laws, including all rulings that supersede, revoke,modify,
or amend any of those previously published in theBulletin. All
published rulings apply retroactively unless other-wise indicated.
Procedures relating solely to matters of in-ternal management are
not published; however, statementsof internal practices and
procedures that affect the rightsand duties of taxpayers are
published.
Revenue rulings represent the conclusions of the Service onthe
application of the law to the pivotal facts stated in therevenue
ruling. In those based on positions taken in rulingsto taxpayers or
technical advice to Service field offices,identifying details and
information of a confidential natureare deleted to prevent
unwarranted invasions of privacy andto comply with statutory
requirements.
Rulings and procedures reported in the Bulletin do not havethe
force and effect of Treasury Department Regulations,but they may be
used as precedents. Unpublished rulingswill not be relied on, used,
or cited as precedents by Servicepersonnel in the disposition of
other cases. In applying pub-lished rulings and procedures, the
effect of subsequent leg-islation, regulations, court decisions,
rulings, and proce-
dures must be considered, and Service personnel and oth-ers
concerned are cautioned against reaching the same con-clusions in
other cases unless the facts and circumstancesare substantially the
same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.This part includes rulings and decisions based
on provisionsof the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.This part is divided into
two subparts as follows: Subpart A,Tax Conventions, and Subpart B,
Legislation and RelatedCommittee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.To the
extent practicable, pertinent cross references tothese subjects are
contained in the other Parts and Sub-parts. Also included in this
part are Bank Secrecy Act Admin-istrative Rulings. Bank Secrecy Act
Administrative Rulingsare issued by the Department of the
Treasury’s Office of theAssistant Secretary (Enforcement).
Part IV.—Items of General Interest.With the exception of the
Notice of Proposed Rulemakingand the disbarment and suspension list
included in this part,none of these announcements are consolidated
in the Cumu-lative Bulletins.
The first Bulletin for each month includes a cumulative indexfor
the matters published during the preceding months.These monthly
indexes are cumulated on a semiannual basisand are published in the
first Bulletin of the succeeding semi-annual period,
respectively.
3
Introduction
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.
-
Section 61.—Gross IncomeDefined
26 CFR 61–21: Taxation of fringe benefits.
This procedure provides the maximum value ofemployer-provided
automobiles first made availableto employees for personal use in
calendar year 1998for which the vehicle cents-per-mile valuation
ruleprovided under § 1.61–21(e) of the Income Tax Reg-ulations may
be applicable. See Rev. Proc. 98–30,page 6.
Section 280F.—Limitation onDepreciation for LuxuryAutomobiles;
Limitation WhereCertain Property Used forPersonal Purposes
26 CFR 280F–7: Property leased after December31, 1986.
This procedure provides owners and lessees ofpassenger
automobiles (including electric automo-biles) with tables detailing
the limitations on depre-ciation deductions for automobiles first
placed in
service during calendar year 1998 and the amountsto be included
in income for automobiles first leasedduring calendar year 1998.
See Rev. Proc. 98–30,page 6.
Section 1295.—QualifiedElecting Funds
Notice 98–22 announces that final regulationsunder section 1295
will permit shareholders of pas-sive foreign investment companies
treated as quali-fied electing funds to apply the rules of §
1.1295–1T(b)(4) (joint return elections), the rulesof §
1.1295–1T(f) and (g) (simplified filing and re-porting procedures),
or both sets of rules to a taxableyear beginning before January 1,
1998. See Notice98–22, page 5.
Section 6302.—Mode or Time ofCollection
26 CFR 31.6302–1: Federal tax deposit rules forwithheld income
taxes and taxes under the FederalInsurance Contributions Act (FICA)
attributable topayments made after December 31, 1992.
Information is provided about the Electronic Fed-eral Tax
Payment System (EFTPS) programs forBatch Filers and Bulk Filers
(Filers). EFTPS is anelectronic remittance processing system for
makingfederal tax deposits (FTDs) and federal tax pay-ments (FTPs).
The Batch Filer and Bulk Filer pro-grams are used by Filers for
electronically submit-ting enrollments, FTDs, and FTPs on behalf
ofmultiple taxpayers. See Rev. Proc. 98–32, page 11.
April 27, 1998 4 1998–17 I.R.B.
Part I. Rulings and Decisions Under the Internal Revenue Code of
1986
-
Application of Section 1.1295–1T(b)(4), (f), and (g) to
TaxableYears Beginning Before January 1, 1998
Notice 98–22
This notice provides guidance to director indirect shareholders
of passive foreigninvestment companies (PFICs), as de-fined in
section 1297 of the Internal Rev-enue Code, concerning the
effective dateof § 1.1295–1T(b)(4), (f), and (g) of thetemporary
regulations published in theFederal Registeron January 2, 1998,
asT.D. 8750. As described below, final reg-ulations under section
1295 will permitshareholders of PFICs to apply the rulesof §
1.1295–1T(b)(4), the rules of § 1.1295–1T(f) and (g), or both sets
ofrules to a taxable year beginning beforeJanuary 1, 1998, for
which the period oflimitations has not run as of the date
ofpublication of this notice, provided that,in the case of §
1.1295–1T(b)(4), theshareholders consistently apply the rulesto all
subsequent taxable years.
BACKGROUND
Section 1.1295–1T(b)(4) of the tempo-rary regulations provides
rules concern-ing a section 1295 election made by a tax-payer in a
joint return under section 6013.Section 1.1295–1T(f) and (g)
providesimplified rules concerning the manner ofmaking and
maintaining a section 1295election to treat a PFIC as a
qualifiedelecting fund (QEF). Prior to the publica-tion of §
1.1295–1T(f) and (g), Notice88–125, 1988–2 C.B. 535, provided
suchguidance. Under § 1.1295–1T(k), § 1.1295–1T(b)(4), (f), and (g)
is effectivefor taxable years of shareholders begin-ning after
December 31, 1997.
APPLICATION TO EARLIERTAXABLE YEARS
Commenters have requested that § 1.1295–1T(b)(4) apply on an
electivebasis to taxable years beginning beforeJanuary 1, 1998, to
provide taxpayers cer-tainty with respect to elections made onjoint
returns for such years. Commentersalso requested that §
1.1295–1T(f) and (g)apply on an elective basis to taxable years
beginning before January 1, 1998, to en-able taxpayers to use
the simplified re-porting procedures for 1997. In responseto these
comments, the final regulationswill permit taxpayers to apply the
rules oftemporary regulations § 1.1295–1T(b)(4),the rules of §
1.1295–1T(f) and (g), orboth sets of rules, to a taxable year
begin-ning before January 1, 1998, for whichthe statute of
limitations on the assess-ment of tax has not expired as of the
dateof publication of this notice. Taxpayersthat filed a joint
return in which the sec-tion 1295 election was made may onlyapply
the rules of §1.1295–1T(b)(4) ifthey have consistently applied the
rules ofthat section to all taxable years followingthe year in
which the election was madeand for which the statute of limitations
forthe assessment of tax is open. Subject tothis consistency
requirement, the rule of§1.1295–1T(b)(4) may be applied to anyopen
year even if the section 1295 elec-tion was made in a year for
which thestatute of limitations has expired. No ac-tion other than
treatment consistent withan effective section 1295 election is
nec-essary for the section 1295 election to betreated as made by
both spouses.
PAPERWORK REDUCTION ACT
The collections of information require-ments contained in the
temporary regula-tions to which this notice applies were re-viewed
and, pending receipt andevaluation of public comments, approvedby
the Office of Management and Budget(OMB) in accordance with the
PaperworkReduction Act (44 U.S.C. 3507) undercontrol number
1545-1555.
FOR FURTHER INFORMATION CON-TACT Teresa Hughes at (202)
622-3840(not a toll-free call).
Net Unrealized Appreciation inEmployer Securities
Notice 98–24
PURPOSE
This notice provides guidance concern-ing the tax treatment of
net unrealized ap-preciation in employer securities distrib-
uted from a qualified retirement plan, tothe extent such
appreciation is realized ina subsequent taxable transaction.
Specifi-cally, this notice provides guidance re-garding the holding
period to be used fordetermining the capital gains tax rate
thatapplies with regard to net unrealized ap-preciation under §
1(h) of the InternalRevenue Code (“Code”) as amended by§ 311 of the
Taxpayer Relief Act of 1997(“TRA ’97”), Pub. L. 105–34. This
guid-ance applies to sales or other dispositionsof employer
securities that occur beforethe later of January 1, 2001, or the
datefurther guidance is issued.
BACKGROUND
Section 402(e)(4)(A) of the Code pro-vides that in the case of a
distributionother than a lump sum distribution, theamount actually
distributed to a distribu-tee from a trust described in §
401(a)which is exempt from tax under § 501(a)shall not include any
net unrealized ap-preciation in employer securities attribut-able
to amounts contributed by the em-ployee.
Section 402(e)(4)(B) provides that inthe case of a lump sum
distribution whichincludes employer securities, there shallbe
excluded from gross income the netunrealized appreciation
attributable to theemployer securities.
Section 402(e)(4)(C) provides that, forpurposes of §
402(e)(4)(A) and (B), netunrealized appreciation and the
resultingadjustments to basis are determined in ac-cordance with
regulations.
Section 1.402(a)–1(b)(1)(i) of the In-come Tax Regulations
provides that theamount of net unrealized appreciationwhich is not
included in the basis of thesecurities in the hands of the
distributee atthe time of distribution is considered again from the
sale or exchange of a capitalasset held for more than six months to
theextent such appreciation is realized in asubsequent taxable
transaction. Net gainrealized by the distributee in a
subsequenttaxable transaction that exceeds theamount of the net
unrealized appreciationat the time of distribution shall
constitutea long-term or short-term capital gain, de-pending on the
holding period of the secu-rities in the hands of the distributee.
In
1998–17 I.R.B. 5 April 27, 1998
Part III. Administrative, Procedural, and Miscellaneous
-
1956, when this regulation was issued, thelong-term capital
gains tax rate applied tothe sale or exchange of a capital asset
heldfor more than six months.
Rev. Rul. 81–122, 1981–1 C.B. 202,states that the amount of net
unrealizedappreciation that is not included in thebasis of the
securities in the hands of adistributee at the time of distribution
isconsidered a gain from the sale or ex-change of a capital asset
held for morethan one year to the extent it is realized ina
subsequent transaction. When this rev-enue ruling was published,
the long-termcapital gains tax rate applied to the sale orexchange
of a capital asset held for morethan one year.
Section 311 of TRA ’97 reduces thecapital gains tax rate on the
sale or ex-change of certain assets held for morethan 18 months
from 28 percent to 20 per-cent (10 percent in the case of gain
thatwould otherwise be taxed at 15 percent),effective generally for
amounts properlytaken into account after May 6, 1997. SeeNotice
97–59, 1997–45 I.R.B. 7. The 28-percent maximum capital gains tax
ratecontinues to apply to the sale or exchangeof assets held for 18
months or less butmore than one year.
CAPITAL GAINS RATE APPLICABLETO NET UNREALIZEDAPPRECIATION
Under this notice, the amount of netunrealized appreciation
which is not in-cluded in the basis of the securities in thehands
of the distributee at the time of dis-tribution is considered a
gain from thesale or exchange of a capital asset held formore than
18 months to the extent thatsuch appreciation is realized in a
subse-quent taxable transaction. Accordingly,for a sale or other
disposition of employersecurities that occurs after May 6, 1997,the
actual period that an employer secu-rity was held by a qualified
plan need notbe calculated in order to determinewhether, with
respect to the net unrealizedappreciation, the disposition
qualifies forthe rate for capital assets held for morethan 18
months. However, with respect toany further appreciation in the
employersecurities after distribution from the plan,the actual
holding period in the hands ofthe distributee determines the
capitalgains rate that applies.
The guidance provided in this noticeapplies to sales or other
dispositions ofemployer securities that occur before thelater of
January 1, 2001, or the date fur-ther guidance is issued. This
guidance isfor purposes of the Code and regulationsections cited
above. No inference is in-tended with regard to any other section
ofthe Code or regulations that deals withcapital gains
treatment.
COMMENTS
Beginning in 2001, § 311 of TRA ’97reduces the capital gains tax
rates for gainfrom certain assets that are held for morethan 5
years (“qualified 5-year gain”).The 10-percent rate is reduced to 8
per-cent for taxable years beginning after De-cember 31, 2000. The
20-percent rate isreduced to 18 percent for property theholding
period for which begins after De-cember 31, 2000.
The Service invites comments with re-spect to the computation of
the holdingperiod for purposes of the reduced capitalgains tax
rates for qualified 5-year gain asthese rates apply to net
unrealized appre-ciation (for example, whether to use anactual
holding period, a deemed holdingperiod, or a combination).
Commentsshould be submitted by October 24, 1998.
Comments can be addressed toCC:DOM:CORP:R (Notice 98–24),
room5228, Internal Revenue Service, POB7604, Ben Franklin Station,
Washington,DC 20044. In the alternative, commentsmay be hand
delivered between the hoursof 8 a.m. and 5 p.m. to CC:DOM:CORP:R
(Notice 98–24), Courier’s Desk, Inter-nal Revenue Service, 1111
ConstitutionAvenue, NW, Washington, DC. Alterna-tively, taxpayers
may transmit commentselectronically via the IRS Internet site
athttp://www.irs.ustreas.gov/prod/tax_regs/comments.html.
DRAFTING INFORMATION
The principal author of this notice isSteven Linder of the
Employee Plans Divi-sion. For further information regarding
thisnotice, please contact the Employee PlansDivision’s taxpayer
assistance telephoneservice at (202) 622-6074 or (202) 622-6075,
between the hours of 1:30 p.m. and3:30 p.m. Eastern time, Monday
throughThursday, or Mr. Linder at (202) 622-6214. These are not
toll-free numbers.
26 CFR 601.105: Examination of returns andclaims for refund,
credit, or abatement;determination of correct tax liability.(Also
Part I, § 280F; 1.280F–7, 1.61–21.)
Rev. Proc. 98–30
SECTION 1. PURPOSE
This revenue procedure provides: (1)limitations on depreciation
deductions forowners of passenger automobiles firstplaced in
service during calendar year1998, including separate limitations
onpassenger automobiles designed to bepropelled primarily by
electricity andbuilt by an original equipment manufac-turer
(electric automobiles); (2) theamounts to be included in income
bylessees of passenger automobiles firstleased during calendar year
1998, includ-ing separate inclusion amounts for elec-tric
automobiles; and (3) the maximumallowable value of
employer-provided au-tomobiles first made available to employ-ees
for personal use in calendar year 1998for which the vehicle
cents-per-mile valu-ation rule provided under § 1.61–21(e) ofthe
Income Tax Regulations may be ap-plicable. The tables detailing
these depre-ciation limitations and lessee inclusionamounts reflect
the automobile price inflation adjustments required by § 280F(d)(7)
of the Internal RevenueCode. The maximum allowable automo-bile
value for applying the vehicle cents-per-mile valuation rule
reflects the auto-mobile price inflation adjustment of § 280F(d)(7)
as required by § 1.61–21(e)-(1)(iii)(A).
SECTION 2. BACKGROUND
For owners of automobiles, § 280F(a)imposes dollar limitations
on the depreci-ation deduction for the year that the auto-mobile is
placed in service and each suc-ceeding year. In the case of
electricautomobiles placed in service after Au-gust 5, 1997, and
before January 1, 2005,§ 280F(a)(1)(C) requires tripling of
theselimitation amounts. Section 280F(d)(7)requires the amounts
allowable as depre-ciation deductions to be increased by aprice
inflation adjustment amount for pas-senger automobiles placed in
service aftercalendar year 1988.
For leased automobiles, § 280F(c) re-quires a reduction in the
deduction al-lowed to the lessee of the automobile.
April 27, 1998 6 1998–17 I.R.B.
-
The reduction must be substantiallyequivalent to the limitations
on the depre-ciation deductions imposed on owners ofautomobiles.
Under § 1.280F–7(a), thisreduction requires the lessees to
includein gross income an inclusion amount de-termined by applying
a formula to theamount obtained from a table. There is atable for
lessees of electric automobilesand a table for all other passenger
auto-mobiles. Each table shows inclusionamounts for a range of fair
market valuesfor each tax year after the automobile isfirst
leased.
For automobiles first provided by em-ployers to employees that
meet the re-quirements of § 1.61–21(e)(1), the valueto the employee
of the use of the automo-bile may be determined under the
vehiclecents-per-mile valuation rule of § 1.61–21(e). Section
1.61-21(e)(1)(iii)(A) pro-vides that for an automobile first
madeavailable after 1988 to any employee ofthe employer for
personal use, the valueof the use of the automobile may not
bedetermined under the vehicle cents-per-mile valuation rule for a
calendar year ifthe fair market value of the automobile(determined
pursuant to § 1.61–21(d)-(5)(i) through (iv)) on the first date the
au-tomobile is made available to the em-ployee exceeds $12,800 as
adjusted by § 280F(d)(7).
SECTION 3. SCOPE AND OBJECTIVE
01. The limitations on depreciation de-ductions in section 4.02
of this revenueprocedure apply to automobiles (otherthan leased
automobiles) that are placedin service in calendar year 1998 and
con-tinue to apply for each tax year that theautomobile remains in
service.
02. The tables in section 4.03 of thisrevenue procedure apply to
leased auto-mobiles for which the lease term begins incalendar year
1998. Lessees of such auto-mobiles must use these tables to
deter-mine the inclusion amount for each taxyear during which the
automobile isleased.
03. SeeRev. Proc. 96–25, 1996–1 C.B.681, for information on
determining in-clusion amounts for automobiles firstleased before
January 1, 1997; Rev. Proc.97–20, 1997–11 I.R.B. 10, for
automo-biles first leased during calendar year
1997, including electric automobiles firstleased on or after
January 1, 1997, and be-fore August 6, 1997; and Rev. Proc.98–24,
1998-10 I.R.B. 31, for electric au-tomobiles first leased after
August 5,1997, and before January 1, 1998.
04. The maximum fair market valuefigure in section 4.04(2) of
this revenueprocedure applies to employer-providedautomobiles first
made available to anyemployee for personal use in calendaryear
1998. SeeRev. Proc. 97–20, for themaximum fair market value figure
for au-tomobiles first made available in calendaryear 1997.
SECTION 4. APPLICATION
01. A taxpayer placing an automobilein service for the first
time during calen-dar year 1998 is limited to the deprecia-tion
deduction shown in Table 1 of sec-tion 4.02(2) or, in the case of
an electricautomobile, Table 2. A taxpayer firstleasing an
automobile in calendar year1998 must determine the inclusionamount
that is added to gross incomeusing Table 3 of section 4.03 or, in
thecase of an electric automobile, Table 4.Otherwise, the
procedures of § 1.280F–7(a) must be followed. An employer
pro-viding an automobile for the first time incalendar year 1998
for the personal use ofany employee may determine the value ofthe
use of the automobile by using thecents-per-mile valuation rule in
§ 1.61–21(e) if the fair market value of the auto-mobile does not
exceed the amount speci-fied in section 4.04(2). If the fair
marketvalue of the automobile exceeds theamount specified in
section 4.04(2), theemployer may determine the value of theuse of
the automobile under the generalvaluation rules of § 1.61–21(b) or
underthe special valuation rules of § 1.61–21(d)(Automobile lease
valuation) or § 1.61–21(f) (Commuting valuation) if the ap-plicable
requirements are met.
02. Limitations on Depreciation De-ductions for Certain
Automobiles.
(1) Amount of the Inflation Adjust-ment. Under §
280F(d)(7)(B)(i), the auto-mobile price inflation adjustment for
anycalendar year is the percentage (if any) bywhich the CPI
automobile component forOctober of the preceding calendar
yearexceeds the CPI automobile component
for October 1987. The term “CPI auto-mobile component” is
defined in § 280F(d)(7)(B)(ii) as the “automobilecomponent” of the
Consumer Price Indexfor all Urban Consumers published by
theDepartment of Labor (the CPI). The newcar component of the CPI
was 115.2 forOctober 1987 and 140.6 for October1997. The October
1997 index exceededthe October 1987 index by 25.4. The In-ternal
Revenue Service has, therefore, de-termined that the automobile
price infla-tion adjustment for 1998 is 22.05 percent(25.4/115.2 3
100%). This adjustment isapplicable to all automobiles that are
firstplaced in service in calendar year 1998.The dollar limitations
in § 280F(a) musttherefore be multiplied by a factor of0.2205, and
the resulting increases, afterrounding to the nearest $100, are
added tothe 1988 limitations to give the deprecia-tion limitations
applicable to passengerautomobiles (other than electric
automo-biles) for 1998. To determine the dollarlimitations
applicable to an electric auto-mobile first placed in service
during cal-endar year 1998, the dollar limitations in§ 280F(a) are
tripled in accordance with § 280F(a)(1)(C) and are then
multipliedby a factor of 0.2205; the resulting in-creases, after
rounding to the nearest$100, are added to the tripled 1988
limita-tions to give the depreciation limitationsfor 1998.
(2) Amount of the Limitation.Forautomobiles (other than electric
automo-biles) placed in service in calendar year1998, Table 1
contains the dollar amountof the depreciation limitations for
eachtax year. For electric automobiles placedin service in calendar
year 1998, Table 2contains these amounts.
1998–17 I.R.B. 7 April 27, 1998
REV. PROC. 98–30 TABLE 1
DEPRECIATION LIMITATIONSFOR AUTOMOBILES (OTHERTHAN ELECTRIC
AUTOMO-
BILES) FIRST PLACED IN SER-VICE IN CALENDAR YEAR 1998
Tax Year Amount
1st Tax Year $3,1602nd Tax Year $5,0003rd Tax Year $2,950Each
Succeeding Year $1,775
-
REV. PROC. 98–30 TABLE 3
DOLLAR AMOUNTS FOR AUTOMOBILES (OTHER THAN ELECTRIC
AUTOMOBILES)WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 1998
Fair Market Value of Automobile Tax Year During Lease
Over Not Over 1st 2nd 3rd 4th 5th and Later
$ 15,800 16,100 1 5 8 12 1416,100 16,400 4 10 16 22 2516,400
16,700 6 15 25 31 3616,700 17,000 9 20 33 41 4717,000 17,500 12 28
43 53 6217,500 18,000 16 37 56 70 8018,000 18,500 20 46 70 85
9918,500 19,000 24 55 83 101 11719,000 19,500 28 64 96 117
13619,500 20,000 32 73 110 133 15420,000 20,500 36 82 123 149
17320,500 21,000 40 91 36 165 19121,000 21,500 45 99 150 181
20921,500 22,000 49 108 163 197 22822,000 23,000 55 122 183 221
25523,000 24,000 63 140 210 252 29224,000 25,000 71 158 236 285
32925,000 26,000 79 176 263 316 36626,000 27,000 88 193 290 348
40327,000 28,000 96 211 317 380 43928,000 29,000 104 229 343 412
47729,000 30,000 112 247 370 444 51330,000 31,000 120 265 396 476
550 31,000 32,000 128 283 423 508 58732,000 33,000 137 301 449 540
624 33,000 34,000 145 319 476 571 66134,000 35,000 153 337 502 604
697 35,000 36,000 161 355 529 635 73536,000 37,000 169 373 556 667
77137,000 38,000 178 391 582 699 80838,000 39,000 186 409 608 731
84539,000 40,000 194 427 635 763 882
03. Inclusions in Income of Lessees ofAutomobiles.
The inclusion amounts for automobilesfirst leased in calendar
year 1998 are cal-
culated under the procedures described in§ 1.280F-7(a). Lessees
of automobilesother than electric automobiles should useTable 3 in
applying these procedures,
while lessees of electric automobilesshould use Table 4.
April 27, 1998 8 1998–17 I.R.B.
REV. PROC. 98–30 TABLE 2
DEPRECIATION LIMITATIONS FOR ELECTRIC AUTOMOBILES FIRST PLACED
IN SERVICE IN CALENDAR YEAR 1998
Tax Year Amount
1st Tax Year $9,3802nd Tax Year $15,0003rd Tax Year $8,950Each
Succeeding Year $5,425
-
1998–17 I.R.B. 9 April 27, 1998
REV. PROC. 98–30 TABLE 3—Continued
DOLLAR AMOUNTS FOR AUTOMOBILES (OTHER THAN ELECTRIC
AUTOMOBILES)WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 1998
Fair Market Value of Automobile Tax Year During Lease
Over Not Over 1st 2nd 3rd 4th 5th and Later
40,000 41,000 202 445 662 794 91941,000 42,000 210 463 688 827
95542,000 43,000 218 481 715 859 99243,000 44,000 227 498 742 891
1,02844,000 45,000 235 516 769 922 1,06645,000 46,000 243 534 795
955 1,10246,000 47,000 251 552 822 986 1,14047,000 48,000 259 570
849 1,018 1,17648,000 49,000 268 588 875 1,050 1,21349,000 50,000
276 606 901 1,082 1,25050,000 51,000 284 624 928 1,114 1,28651,000
52,000 292 642 955 1,145 1,32452,000 53,000 300 660 981 1,178
1,36053,000 54,000 308 678 1,008 1,209 1,39854,000 55,000 317 695
1,035 1,241 1,43455,000 56,000 325 713 1,062 1,273 1,47156,000
57,000 333 732 1,087 1,305 1,50857,000 58,000 341 750 1,114 1,337
1,54458,000 59,000 349 768 1,140 1,369 1,58259,000 60,000 358 785
1,168 1,400 1,61960,000 62,000 370 812 1,207 1,449 1,67462,000
64,000 386 848 1,261 1,512 1,74764,000 66,000 403 884 1,313 1,577
1,82166,000 68,000 419 920 1,367 1,640 1,89468,000 70,000 435 956
1,420 1,704 1,96870,000 72,000 452 991 1,474 1,767 2,04272,000
74,000 468 1,027 1,527 1,832 2,11574,000 76,000 484 1,063 1,580
1,896 2,18976,000 78,000 501 1,099 1,633 1,959 2,26378,000 80,000
517 1,135 1,686 2,023 2,33780,000 85,000 546 1,198 1,779 2,134
2,46685,000 90,000 587 1,287 1,913 2,294 2,64990,000 95,000 627
1,377 2,046 2,453 2,83495,000 100,000 668 1,467 2,178 2,613
3,018
100,000 110,000 730 1,601 2,378 2,852 3,294110,000 120,000 812
1,780 2,644 3,172 3,662120,000 130,000 893 1,960 2,910 3,490
4,031130,000 140,000 975 2,139 3,176 3,810 4,398140,000 150,000
1,057 2,318 3,443 4,128 4,767150,000 160,000 1,139 2,498 3,708
4,447 5,135160,000 170,000 1,221 2,677 3,974 4,766 5,504170,000
180,000 1,302 2,857 4,240 5,085 5,872180,000 190,000 1,384 3,036
4,506 5,404 6,241190,000 200,000 1,466 3,215 4,772 5,724
6,608200,000 210,000 1,548 3,394 5,039 6,042 6,977210,000 220,000
1,630 3,574 5,304 6,361 7,345220,000 230,000 1,712 3,753 5,570
6,680 7,714230,000 240,000 1,793 3,932 5,837 6,999 8,082240,000
250,000 1,875 4,112 6,102 7,318 8,450
-
April 27, 1998 10 1998–17 I.R.B.
REV. PROC. 98–30 TABLE 4
DOLLAR AMOUNTS FOR ELECTRIC AUTOMOBILES WITH A LEASE TERM
BEGINNING IN CALENDAR YEAR 1998
Fair Market Value of Automobile Tax Year During Lease
Over Not Over 1st 2nd 3rd 4th 5th and Later
$ 47,000 48,000 5 11 18 21 2348,000 49,000 13 29 45 52 6049,000
50,000 21 47 71 85 9650,000 51,000 29 65 98 116 13451,000 52,000 38
83 124 148 17152,000 53,000 46 101 151 180 20753,000 54,000 54 119
177 212 24454,000 55,000 62 137 204 244 28155,000 56,000 70 155 231
275 31856,000 57,000 79 172 258 307 35557,000 58,000 87 190 284 340
39158,000 59,000 95 208 311 372 42859,000 60,000 103 226 338 403
46560,000 62,000 115 253 378 451 52062,000 64,000 132 289 430 515
59464,000 66,000 148 325 484 578 66866,000 68,000 164 361 537 643
74168,000 70,000 181 396 591 706 81570,000 72,000 197 432 644 770
88872,000 74,000 214 468 697 834 96274,000 76,000 230 504 750 898
1,03576,000 78,000 246 540 803 962 1,10978,000 80,000 263 576 856
1,025 1,18380,000 85,000 291 639 949 1,137 1,31285,000 90,000 332
728 1,083 1,296 1,49690,000 95,000 373 818 1,215 1,456 1,68195,000
100,000 414 908 1,348 1,615 1,865
100,000 110,000 475 1,042 1,548 1,855 2,141110,000 120,000 557
1,221 1,814 2,174 2,509120,000 130,000 639 1,401 2,080 2,492
2,878130,000 140,000 721 1,580 2,346 2,812 3,245140,000 150,000 803
1,759 2,612 3,131 3,614150,000 160,000 884 1,939 2,878 3,450
3,982160,000 170,000 966 2,118 3,144 3,769 4,350170,000 180,000
1,048 2,297 3,410 4,088 4,719180,000 190,000 1,130 2,477 3,676
4,406 5,087190,000 200,000 1,212 2,656 3,942 4,726 5,455200,000
210,000 1,293 2,835 4,209 5,044 5,824210,000 220,000 1,375 3,015
4,474 5,364 6,191220,000 230,000 1,457 3,194 4,740 5,683
6,560230,000 240,000 1,539 3,373 5,006 6,002 6,928240,000 250,000
1,621 3,552 5,273 6,320 7,297
-
04. Maximum Automobile Value forUsing the Cents-per-mile
Valuation Rule.
(1) Amount of Adjustment.Under § 1.61–21(e)(1)(iii)(A), the
limitation onthe fair market value of an employer-pro-vided
automobile first made available toany employee for personal use
after 1988is to be adjusted in accordance with § 280F(d)(7).
Accordingly, the adjust-ment for any calendar year is the
percent-age (if any) by which the CPI automobilecomponent for
October of the precedingcalendar year exceeds the CPI
automobilecomponent for October 1987 (See,section4.02(1).) The new
car component of theCPI was 115.2 for October 1987 and140.6 for
October 1997. The October1997 index exceeded the October 1987index
by 25.4. The Internal Revenue Ser-vice has, therefore, determined
that theadjustment for 1998 is 22.05 percent(25.4/115.2 3 100%).
This adjustment isapplicable to all employer-provided auto-mobiles
first made available to any em-ployee for personal use in calendar
year1998. The maximum fair market valuespecified in §
1.61–21(e)(1)(iii)(A) musttherefore be multiplied by a factor
of0.2205, and the resulting increase, afterrounding to the nearest
$100, is added to$12,800 to give the maximum value for1998.
(2) The Maximum Automobile Value.For automobiles first made
available incalendar year 1998 to any employee ofthe employer for
personal use, the vehiclecents-per-mile valuation rule may be
ap-plicable if the fair market value of the au-tomobile on the date
it is first made avail-able does not exceed $15,600.
SECTION 5. EFFECTIVE DATE
This revenue procedure is effective forautomobiles (other than
leased automo-biles) that are first placed in service dur-ing
calendar year 1998, to leased automo-biles that are first leased
during calendaryear 1998, and to employer-provided au-tomobiles
first made available to employ-ees for personal use in calendar
year1998.
DRAFTING INFORMATION
The principal author of this revenueprocedure is Bernard P.
Harvey of the Of-fice of the Assistant Chief Counsel(Passthroughs
and Special Industries).
For further information regarding the de-preciation limitations
and lessee inclusionamounts in this revenue procedure, con-tact Mr.
Harvey at (202) 622-3110; forfurther information regarding the
maxi-mum automobile value for applying thevehicle cents-per-mile
valuation rule,contact Ms. Janine Cook of the Office ofthe
Associate Chief Counsel (EmployeeBenefits and Exempt Organizations)
at(202) 622-6040 (not toll-free calls).
26 CFR 601.602: Tax forms and instructions.(Also Part I, §§
6302; 31.6302–1)
Rev. Proc. 98–32
Table of ContentsSECTION 1. PURPOSESECTION 2. BACKGROUNDSECTION
3. DEFINITIONSSECTION 4. OVERVIEWSECTION 5. REGISTRATIONSECTION 6.
ASSIGNMENT TO A FI-
NANCIAL AGENTSECTION 7. AUTHORIZATIONS SECTION 8.
ENROLLMENTSECTION 9. ACH DEBIT ENTRYSECTION 10. ACH CREDIT
ENTRYSECTION 11. ELECTRONIC TAX AP-
PLICATION TRANSAC-TION
SECTION 12. PROOF OF PAYMENTSECTION 13. REFUNDSSECTION 14.
DISASTER PROCE-
DURESSECTION 15. RESPONSIBILITIES OF
A FILERSECTION 16. ADVERTISING STAN-
DARDS SECTION 17. REASONS FOR SUS-
PENSIONSECTION 18. ADMINISTRATIVE RE-
VIEW PROCESS FORPROPOSED SUSPEN-SION
SECTION 19. EFFECT OF SUSPEN-SION
SECTION 20. APPEAL OF SUSPEN-SION
SECTION 21. PENALTIES SECTION 22. FORMS, PUBLICA-
TIONS, IMPLEMENTA-TION GUIDES, ANDADDITIONAL INFOR-MATION
SECTION 23. EFFECT ON OTHERDOCUMENTS
SECTION 24. EFFECTIVE DATESECTION 25. PAPERWORK REDUC-
TION ACT
SECTION 1. PURPOSE
This revenue procedure provides infor-mation about the
Electronic Federal TaxPayment System (EFTPS) programs forBatch
Filers and Bulk Filers (Filers).EFTPS is an electronic remittance
pro-cessing system for making federal tax de-posits (FTDs) and
federal tax payments(FTPs). The Batch Filer and Bulk Filerprograms
are used by Filers for electroni-cally submitting enrollments,
FTDs, andFTPs on behalf of multiple taxpayers.
SECTION 2. BACKGROUND
.01 Section 6302(c) of the InternalRevenue Code provides that
the Secretaryof the Treasury (Secretary) may authorizeFederal
Reserve banks, and incorporatedbanks and other financial
institutions thatare depositories or financial agents of theUnited
States, to receive any tax imposedunder the internal revenue laws,
in suchmanner, at such times, and under suchconditions as the
Secretary may prescribe.Section 6302(c) also provides that
theSecretary shall prescribe the manner,times, and conditions under
which the re-ceipt of such tax by such banks and otherfinancial
institutions is to be treated as apayment of such tax to the
Secretary.
.02 Section 6302(h) requires the Secre-tary to establish an
electronic funds trans-fer (EFT) system to collect depositarytaxes
(FTDs). EFTPS is the EFT systemdeveloped by the Secretary to
collect fed-eral taxes (FTDs and FTPs). See § 31.6302–1(h)(4)(i) of
the EmploymentTax and Collection of Income Tax atSource
Regulations, and Rev. Proc. 97–33, 1997–30 I.R.B. 10.
.03 Some taxpayers are required by theregulations issued under §
6302(h) to make FTDs using EFTPS. See § 31.6302–1(h)(2)(i)(A).
Taxpayers notrequired to make FTDs using EFTPS maychoose to do so
voluntarily. Taxpayersalso may choose to make FTPs usingEFTPS.
.04 All Filers using the Batch Filer orBulk Filer programs must
comply withthis revenue procedure, and with the Im-plementation
Guide for EFTPS Batch Fil-ers, or the Implementation Guide for
1998–17 I.R.B. 11 April 27, 1998
-
EFTPS Bulk Filers, whichever is applica-ble.
.05 The two primary remittance meth-ods in EFTPS are an
Automated ClearingHouse (ACH) debit entry and an ACHcredit entry.
Filers may also use an Elec-tronic Tax Application (ETA)
transaction.These remittance methods are defined insection 3 and
described in sections 9, 10,and 11 of this revenue procedure.
.06 Filers participating in EFTPS mustensure that taxpayers’
funds are remittedon a timely basis. See § 31.6302–1(h)(8)for rules
regarding when an FTD remittedby EFTPS is deemed made. For FTDsand
FTPs remitted by EFTPS, see § 31.6302–1(h)(9) for rules
regardingwhen the tax is deemed paid.
.07 If a taxpayer is required by regula-tions to make an FTD by
EFTPS, a Filermay not use a paper FTD coupon (Form8109, Federal Tax
Deposit Coupon) or themagnetic tape FTD program (described inRev.
Proc. 89–48, 1989–2 C.B. 599) tomake an FTD for the taxpayer. If a
tax-payer is a voluntary participant in EFTPS(that is, a
participant not required by regu-lations to make an FTD by EFTPS)
andthe Filer is unable, for any reason, tomake an FTD using EFTPS
or choosesnot to use EFTPS to make an FTD, theFiler may make a
timely FTD for the tax-payer by using a paper FTD coupon, orthe
magnetic tape FTD program if autho-rized by the taxpayer.
.08 EFTPS does not change the compu-tation of tax liability,
interest or penalties,or FTD or FTP due dates.
SECTION 3. DEFINITIONS
.01 The definitions provided in this sec-tion will be used for
the Batch Filer andBulk Filer programs.
.02 Administrative FRB Head OfficeLocal Zone Time.
“Administrative FRBHead Office Local Zone Time” is thelocal zone
time of the Administrative Fed-eral Reserve Bank head office
throughwhich a financial institution, or its autho-rized
correspondent bank, sends a Same-Day Payment.
.03 Authorization. An “Authorization”is an instrument used by a
taxpayer todesignate a Filer as the taxpayer’s agentfor submitting
enrollments and for mak-ing FTDs or FTPs.
.04 Automated Clearing House(ACH).“Automated Clearing House” is
a funds
transfer system, governed by the ACHRules (the Operating Rules
and the Oper-ating Guidelines published by NationalAutomated
Clearing House Association(NACHA)) that provides for the
interbankclearing of electronic entries for partici-pating
financial institutions.
.05 ACH credit entry.An “ACH creditentry” is a transaction in
which a financialinstitution, upon instructions from a
Filer,originates an FTD or FTP to the appropri-ate Treasury
Department account throughthe ACH system. An ACH credit entry isa
transfer of funds representing one FTDor FTP. There are no “bulk”
ACH creditentries. See section 10 of this revenueprocedure for
information on an ACHcredit entry.
.06 ACH debit entry. An “ACH debitentry” is a transaction in
which one of theFinancial Agents, upon instructions froma Filer,
instructs the Filer’s or the tax-payer’s financial institution to
withdrawfunds from a designated account for anFTD or FTP and to
route the FTD or FTPto the appropriate Treasury Departmentaccount
through the ACH system. A sin-gle ACH debit entry is a transfer of
fundsrepresenting one FTD or FTP. A bulkACH debit entry (a
remittance methodavailable only in the Bulk Filer program)is a
transfer of funds representing multi-ple FTDs or FTPs. See section
9 of thisrevenue procedure for information on anACH debit
entry.
.07 Batch Filer. A Batch Filer is a Filerthat is registered
under the Batch Filerprogram. A Batch Filer submits
multipleelectronic enrollment files at one time anduses a personal
computer or telephone formaking FTDs or FTPs.
.08 Bulk Filer. A Bulk Filer is a Filerthat is registered under
the Bulk Filer pro-gram. A Bulk Filer uses Electronic
DataInterchange (EDI) files to transmit and re-ceive enrollment or
payment information.A Bulk Filer also has additional remit-tance
methods (bulk ACH debit entriesand bulk ETA entries).
.09 Electronic tax application (ETA)transaction. An “ETA
transaction” (alsoreferred to as “Same-Day Payment”) is atransfer
of funds through the ETA subsys-tem of EFTPS that receives,
processes,and transmits an FTD or FTP and the re-lated tax payment
information for Same-Day Payments through Fedwire valuetransfers,
Fedwire non-value transactions,
and Direct Access transactions. A singleETA transaction is a
transfer of funds rep-resenting one FTD or FTP. A bulk
ETAtransaction (a remittance method avail-able only in the Bulk
Filer program) is atransfer of funds representing multipleFTDs or
FTPs. See section 11 of this rev-enue procedure for information on
anETA transaction.
.10 Employer identification number(EIN). An “EIN” is a unique
nine digittaxpayer identifying number issued by theInternal Revenue
Service to business tax-payers for the purpose of reporting tax
re-lated information.
.11 Federal Reserve Bank(FRB). The“FRB” is the U.S. Government’s
fiscalagent. The FRB also processes ACHtransactions to a commercial
financial in-stitution account or to a Treasury Depart-ment
account.
.12 Filer. A “Filer” is a person makingFTDs or FTPs on behalf of
multiple tax-payers in the Batch Filer or Bulk Filerprogram. Each
Filer must be either thetaxpayer or a person authorized to act
onbehalf of the taxpayer.
.13 Financial Agent. For purposes ofEFTPS, a “Financial Agent”
(also re-ferred to as a “Treasury Financial Agent”)is a financial
institution that is designatedas an agent of the Treasury
Department.The Secretary has designated Nations-Bank and First
National Bank of Chicago(First Chicago) to be the Financial
Agentsfor EFTPS. A Financial Agent processesBatch Filer and Bulk
Filer registrations,processes taxpayer enrollments, receivespayment
information, originates ACHdebit entries upon instructions from
tax-payers or Filers, and provides customerservice assistance for
EFTPS enrollmentand payment information.
.14 IRS individual taxpayer identifica-tion number(ITIN). An
“ITIN” is a tax-payer identifying number issued by theService to an
alien individual who is inel-igible to receive a social security
number(SSN) for the purpose of reporting tax re-lated
information.
.15 Prenotification ACH credit. “Pre-notification ACH credit” is
a processwhereby a financial institution verifies theappropriate
Treasury Routing TransitNumber (RTN), the Treasury Depart-ment’s
account number, and the tax-payer’s taxpayer identification
number(TIN).
April 27, 1998 12 1998–17 I.R.B.
-
.16 Prenotification ACH debit. “Preno-tification ACH debit” is a
processwhereby the appropriate Financial Agentverifies the RTN of
the financial institu-tion, the account number, and the
accounttype.
.17 Social security number(SSN). An“SSN” is a taxpayer
identifying numberassigned to an individual or estate by theSocial
Security Administration.
.18 Taxpayer identification number(TIN). A “TIN” is a taxpayer
identifyingnumber assigned to a taxpayer for the pur-pose of
reporting tax related information.A TIN includes an EIN, ITIN, or
SSN.
SECTION 4. OVERVIEW
Filers must follow the following proce-dures to participate in
the Batch Filer orBulk Filer programs:
(1) register as a Filer with the appropri-ate Financial Agent
(see sections 5 and 6of this revenue procedure);
(2) obtain an Authorization from eachtaxpayer for which the
Filer will be sub-mitting enrollments and making FTDs orFTPs, and
submit these Authorizations tothe Service (see section 7 of this
revenueprocedure); and
(3) enroll each of those taxpayers withthe appropriate Financial
Agent (see sec-tion 8 of this revenue procedure).
SECTION 5. REGISTRATION
.01 A Filer may register for the Batch
Filer or Bulk Filer program if the Filer an-ticipates making
FTDs or FTPs for multi-ple taxpayers.
.02 The Batch Filer program is recom-mended for Filers who
anticipate submit-ting 50 or more enrollments.
Additionalinformation for Batch Filers is furnishedin the
Implementation Guide for EFTPSBatch Filers. A copy of this
implementa-tion guide may be obtained from EFTPSCustomer Service
(see section 22 of thisrevenue procedure).
.03 The Bulk Filer program is recom-mended for Filers who
anticipate making750 or more FTDs or FTPs on a peak day.Additional
information for Bulk Filers isfurnished in the Implementation
Guidefor EFTPS Bulk Filers. A copy of this im-plementation guide
may be obtained fromEFTPS Customer Service (see section 22of this
revenue procedure).
.04 A Filer wanting to participate in ei-ther the Batch Filer or
Bulk Filer programmust submit the appropriate registrationletter
(also referred to as an “Agree-ment”). Some Bulk Filers may wish
touse the Batch Filer program as a backup.To participate in both
programs, a Filermust submit a Batch Filer registration let-ter and
a Bulk Filer registration letter.Blank registration letter(s) may
be ob-tained by contacting the appropriate Fi-nancial Agent (listed
in section 6 of thisrevenue procedure).
.05 A Filer must submit the registrationletter to the address
designated in the in-
structions accompanying the registrationletter.
.06 If an unregistered entity acquires aregistered Filer, a new
registration lettermust be submitted by the unregistered en-tity if
it wants to participate in either theBatch Filer or Bulk Filer
program.
.07 A Filer should notify the appropri-ate Financial Agent if
the Filer chooses towithdraw from either the Batch Filer orBulk
Filer program. A Filer that is inac-tive in the Batch Filer or Bulk
Filer pro-gram (that is, the Filer has submitted noenrollments,
FTDs, or FTPs in that pro-gram) for 6 months or more is treated
ashaving withdrawn from that program. Ifa Bulk Filer uses the Batch
Filer programas a backup, the Filer must submit anFTD or FTP
through the Batch Filer pro-gram at least once every six months
toprevent the Filer from being treated ashaving withdrawn from the
Batch Filerprogram. If a Filer withdraws (or istreated as having
withdrawn) from a pro-gram, the Filer must reregister to
partici-pate in that program.
SECTION 6. ASSIGNMENT TO AFINANCIAL AGENT
.01 A Filer’s assignment to a FinancialAgent is based on the
location of theFiler’s principal place of business. EachFinancial
Agent has responsibility forcertain geographic locations as
listedbelow:
1998–17 I.R.B. 13 April 27, 1998
NationsBank (800) 555-4477AlabamaAmerican Samoa Arizona Arkansas
California (Los Angeles,
Orange, San Bernardino, Riverside, San Diego, and Imperial
counties only)
Commonwealth of the Northern Mariana Islands Commonwealth of
Puerto Rico Delaware District of Columbia Florida Georgia Guam
Kentucky Louisiana Maryland Mississippi Nevada New Mexico
First Chicago (800) 945-0966AlaskaCalifornia (except Los
Angeles, Orange, San Bernardino,
Riverside, San Diego, and Imperial
counties)ColoradoConnecticutHawaiiIdahoIllinoisIndianaIowaKansasMaineMassachusettsMichiganMinnesotaMissouriMontanaNebraskaNew
HampshireNew Jersey
-
.02 If a Filer wants to use the other Fi-nancial Agent, the
Filer must submit awritten request detailing the reasons forthe
request and providing the name andtelephone number of a contact
person.This request may be submitted to:
FTD & Electronic Payments Section,T:S:C:F Internal Revenue
Service5000 Ellin RdLanham, MD 20706
or faxed to FTD & Electronic PaymentsSection at (202)
283-7434 (not a toll-freenumber).
.03 A Filer, registered with a FinancialAgent on April 27, 1998,
may continueusing the services of that Financial Agent,regardless
of the geographic assignmentsin section 6.01 of this revenue
procedure.
SECTION 7. AUTHORIZATIONS
.01 If a Filer is not the taxpayer, theFiler must submit a
taxpayer’s Authoriza-tion to the Service before submitting
thetaxpayer’s enrollment to the FinancialAgent.
.02 Except as provided under thegrandfather rule in section
24.02 of thisrevenue procedure, an Authorization mustbe submitted
on Form 8655, ReportingAgent Authorization for
MagneticTape/Electronic Filers, or any other in-strument that
complies with Rev. Proc.96–17, 1996–1 C.B. 633, as modified byRev.
Proc. 97–47, 1997–42 I.R.B. 19.
.03 A Filer that acquires all or some ofthe clients of another
Filer must obtainnew Authorizations from those clients andsubmit
the new Authorizations to the Ser-vice before making FTDs and FTPs
onbehalf of those clients.
.04 An Authorization permits a Filer tosubmit enrollments and to
make FTDs orFTPs on behalf of a taxpayer. An Autho-rization may
also permit the Filer to re-
ceive certain tax information on behalf ofthe taxpayer. Although
EFTPS is de-signed for the payment of various types oftax, the
Authorization may limit the typesof tax information the Filer is
permitted toreceive. For example, a Filer may makeFTDs and FTPs on
behalf of the taxpayer,but may be authorized to receive only
no-tices regarding FTDs for Form 941, Em-ployer’s Quarterly Federal
Tax Return,and Form 940, Employer’s Annual Fed-eral Unemployment
(FUTA) Tax Return.
.05 Except as provided in section 7.07of this revenue procedure,
a Filer submit-ting Authorizations to the Service for theBatch
Filer and Bulk Filer programs on orafter April 27, 1998, must
include a list ofall taxpayers for whom the Filer is sub-mitting
Authorizations. The list must in-clude each taxpayer’s complete
name (forexample, business name on file with Ser-vice), address
(including zip code), andTIN. EINs, SSNs, and ITINs should eachbe
grouped separately. Within eachgroup, the taxpayers must be listed
in TINnumber sequence.
.06 Except as provided in section 7.07of this revenue procedure,
the Authoriza-tions and the accompanying list must besubmitted
to:
EFTPS Coordinator—Authorizations5333 Getwell RoadStop
532Memphis, TN 38118
or faxed to the EFTPS Coordinator at(901) 546-4112 (not a
toll-free number).
.07 If a Filer has submitted Authoriza-tions to the Service for
the Form 941 ELFprogram, as described in Rev. Proc. 97–47, or the
Form 941 or Form 940 MagTape Programs, as described in Rev.
Proc.96–18, 1996–1 C.B. 637, and these Au-thorizations allow the
Filer to make pay-ments on behalf of the taxpayer, the Fileris not
required to resubmit the Authoriza-
tions or to submit a list containing thoseAuthorizations to the
Service. Similarly,if a Filer has submitted Authorizations tothe
Service for the magnetic tape FTDprogram, as described in Rev.
Proc. 89–48, the Filer is not required to resubmitthe
Authorizations or to submit a list con-taining those Authorizations
to the Ser-vice.
.08 To delete Authorizations that a Filerpreviously submitted to
the Service, theFiler must submit a list of the taxpayers tobe
deleted to the EFTPS Coordinator.The list must be submitted in the
formatprescribed in section 7.05 of this revenueprocedure and to
the address (or fax num-ber) provided in section 7.06 of this
rev-enue procedure.
SECTION 8. ENROLLMENT
.01 A Filer must submit electronic tax-payer enrollments to the
appropriate Fi-nancial Agent in accordance with the ap-plicable
implementation guide. As part ofcompleting each taxpayer
enrollment, theFiler may choose to use the ACH debitentry or ACH
credit entry remittancemethod on a taxpayer-by-taxpayer basis.In
both the Batch Filer and the Bulk Filerprograms, enrollment of a
taxpayer in theACH Debit remittance method will auto-matically
enroll the taxpayer in the ACHCredit remittance method. In the
BulkFiler program, enrollment of a taxpayer inthe ACH Credit
remittance method willautomatically enroll the taxpayer in theACH
Debit remittance method. How-ever, in the Batch Filer program,
enroll-ment of a taxpayer in the ACH Credit re-mittance method will
not automaticallyenroll the taxpayer in the ACH Debit re-mittance
method.
.02 The Financial Agent will verify theaccuracy of the
enrollment informationfor each taxpayer and enter the verified
April 27, 1998 14 1998–17 I.R.B.
NationsBank (800) 555-4477North
CarolinaOhioOklahomaPennsylvaniaSouth CarolinaTennessee Texas U.S.
Virgin Islands Virginia West Virginia
First Chicago (800) 945-0966New YorkNorth DakotaOregonRhode
IslandSouth DakotaUtahVermontWashingtonWisconsinWyomingForeign
countries
-
enrollment information in its enrollmentrecord database. As part
of the verifica-tion process for an ACH debit entry in theBatch
Filer program, the Financial Agentwill originate a prenotification
ACHdebit, if requested by the Batch Filer. Inthe Bulk Filer
program, prenotificationACH debits are not available. When
aprenotification ACH debit is not made,the Filer assumes
responsibility for theaccuracy of the information, including theRTN
of the financial institution.
.03 When the enrollment process for ataxpayer is completed, the
FinancialAgent will provide the Filer with an en-rollment response
record that either ac-cepts or rejects the taxpayer’s enrollment.A
rejected enrollment will identify neces-sary corrections. Any
necessary correc-tions must be submitted by the Filer as anew
enrollment of that taxpayer.
.04 If a Filer attempts to make an FTDor FTP through EFTPS
before a taxpayeris enrolled, the FTD or FTP generally willbe
rejected and the taxpayer may be sub-ject to a penalty for a late
FTD or FTP.
SECTION 9. ACH DEBIT ENTRY
.01 For an FTD or FTP to be timely, aFiler must complete the
initiation of anACH debit entry with a Financial Agent atleast one
business day prior to the FTD orFTP due date.
.02 A Filer may “warehouse” an ACHdebit entry for a business
taxpayer by ar-ranging for the entry up to 30 days in ad-vance of
the due date. A Filer may ware-house an ACH debit entry for
anindividual taxpayer by arranging for theentry up to 105 days in
advance of the duedate.
.03 After a Batch Filer or a Bulk Filerinitiates a single ACH
debit entry, the Fi-nancial Agent will validate the
taxpayer’spayment information and issue an ac-knowledgment number
to the Filer. Theacknowledgment number verifies whenthe necessary
payment information wasreceived by a Financial Agent but doesnot
constitute proof of payment. See sec-tion 12 of this revenue
procedure regard-ing proof of payment.
.04 After a Bulk Filer initiates a bulkACH debit entry, the
Financial Agent willvalidate the taxpayers’ payment informa-tion
and issue acknowledgment numbersto the Filer for accepted payments.
TheBulk Filer will receive an acknowledg-
ment number for the bulk ACH debitentry and separate
acknowledgementnumbers for each accepted FTD or FTPincluded in the
bulk ACH debit entry.The acknowledgment numbers verifywhen the
necessary payment informationwas received by a Financial Agent but
donot constitute proof of payment. See sec-tion 12 of this revenue
procedure regard-ing proof of payment.
.05 In a bulk ETA debit entry, any re-jected payment will be
returned to theBulk Filer without an acknowledgementnumber and
subtracted from the bulkACH debit entry, as specified in the
Im-plementation Guide for EFTPS Bulk Fil-ers. The Bulk Filer
assumes responsibil-ity for reinitiating any rejected payments.
.06 Pursuant to the Filer’s instructions,the Financial Agent, on
the date desig-nated by the Filer, will originate the trans-fer of
funds from the taxpayer’s or Filer’saccount to the appropriate
Treasury De-partment account. The Financial Agentalso will transmit
the related payment in-formation, supplied by the Filer, to
theService for posting to the tax account(s)of the taxpayer(s).
.07 The Service will deem an FTD orFTP made by an ACH debit
entry to havebeen made at the time of the debit (that is,when the
amount is withdrawn from thetaxpayer’s or Filer’s account and not
re-turned or reversed).
.08 When a timely ACH debit entrycannot be made, a Filer may
instruct theFinancial Agent to complete the transac-tion at the
next opportunity to submit anACH debit entry. The Filer may also
usean ACH credit entry or an ETA transac-tion. If a taxpayer is not
required to useEFTPS for FTDs, the Filer may use apaper FTD coupon
or, if authorized by thetaxpayer, the magnetic tape FTD program.To
avoid penalties, the FTD or FTP mustbe received by an appropriate
means on orbefore the FTD or FTP due date.
.09 The ACH Rules will govern ACHdebit entry returns and
reversals.
SECTION 10. ACH CREDIT ENTRY
.01 If a Filer chooses the ACH creditentry remittance method to
make an FTDor FTP, the Filer may use any financial in-stitution
capable of originating an ACHcredit entry.
.02 For each TIN used in making ACHcredit entries through a
financial institu-
tion, the Filer may request that the finan-cial institution
originate a prenotificationACH credit.
.03 To initiate a timely ACH creditentry, a Filer must take into
account thefinancial institution’s deadline for origi-nating an ACH
credit entry.
.04 When a timely ACH credit entrycannot be made, a Filer may
instruct thefinancial institution to complete the trans-action at
the next opportunity to submit anACH credit entry. The Filer may
alsouse an ETA transaction. A Bulk Filer mayinitiate an ACH debit
entry. However, aBatch Filer may initiate an ACH debitentry only if
the taxpayer is enrolled forthe ACH debit remittance method. If
ataxpayer is not required to use EFTPS forFTDs, the Filer may use a
paper FTDcoupon or, if authorized by the taxpayer,the magnetic tape
FTD program. Toavoid penalties, the FTD or FTP must bereceived by
an appropriate means on orbefore the FTD or FTP due date.
.05 The Financial Agent will receiveand process the ACH credit
entry pay-ment information. The Financial Agentwill compare the
transaction’s paymentinformation with the taxpayer’s enroll-ment
record. If they match, the FinancialAgent will send the payment
informationto the Service for posting to the tax-payer’s tax
account.
.06 If the Financial Agent cannot iden-tify the taxpayer, the
ACH credit entrywill be returned to the originating finan-cial
institution.
.07 Failure to provide correct, com-plete, and properly
formatted payment in-formation may cause an ACH credit entryto be
returned. In the event of a return, aFiler may instruct the
financial institutionto submit a corrected ACH credit entry atthe
next opportunity to submit an ACHcredit entry. The Filer may also
use anETA transaction. A Bulk Filer may initi-ate an ACH debit
entry. However, aBatch Filer may initiate an ACH debitentry only if
the taxpayer is enrolled forthe ACH debit remittance method. If
ataxpayer is not required to use EFTPS forFTDs, the Filer may use a
paper FTDcoupon or, if authorized by the taxpayer,the magnetic tape
FTD program. Toavoid penalties, the FTD or FTP must bereceived by
an appropriate means on orbefore the FTD or FTP due date.
.08 An ACH Credit entry that is not re-turned or reversed will
be deemed made
1998–17 I.R.B. 15 April 27, 1998
-
at the time that the funds are paid into theappropriate Treasury
Department ac-count.
.09 The ACH Rules will govern ACHcredit entry returns and
reversals.
SECTION 11. ELECTRONIC TAXAPPLICATION TRANSACTION
.01 A Filer may use an ETA transactionto make an FTD or FTP. The
Filer shouldcontact the financial institution throughwhich the ETA
payment will be made todetermine if the financial institution is
ca-pable of making an ETA payment.
.02 A Bulk Filer may use a bulk ETAtransaction to make FTDs or
FTPs. TheBulk Filer should contact the financial in-stitution
through which the bulk ETA pay-ment will be made to determine if
the fi-nancial institution is capable of making abulk ETA
payment.
.03 If a Filer uses a single ETA trans-action, the transfer of
funds and the trans-mission of the related payment informa-tion
occur together. If a Bulk Filer uses abulk ETA transaction, the
transmission ofthe payment information precedes the re-lated
transfer of funds, both of whichoccur on the same day.
.04 The Service generally will deem anETA payment to have been
made on thedate the payment is received by the FRB.A Filer should
contact the financial insti-tution through which the ETA
paymentwill be made to determine the deadline forinitiating ETA
payments for a particularday. ETA payments received by the FRBafter
the deadline set forth in the TreasuryFinancial Manual, Volume IV
(IV TFM),will not be accepted. Currently, the dead-line in IV TFM
is 2:00 p.m. Administra-tive FRB Head Office Local Zone Time.If a
payment is not accepted, the Filermust reoriginate the payment
using anETA transaction or any other permissibleremittance
method.
.05 Additional ETA information may befound in the sections on
Same-Day Pay-ments in the Implementation Guide forEFTPS Bulk Filers
and the EFTPS Pay-ment Instruction Booklets for businesses.
SECTION 12. PROOF OF PAYMENT
.01 For an ACH debit or credit entryposted to the taxpayer’s
account in a fi-nancial institution, a statement prepared
by that financial institution showing atransfer (that is, a
decrease to the tax-payer’s account balance) will be acceptedas
proof of payment if the statement:
(1) shows the amount and the date ofthe transfer; and
(2) identifies the U.S. Governmentas the payee (for example,
“USA tax”).
.02 For an ETA payment posted to thetaxpayer’s account in a
financial institu-tion, a taxpayer may request that its finan-cial
institution obtain a statement from theFRB that executed the
transfer. Thisstatement will be accepted as proof ofpayment if the
statement:
(1) shows the amount and the date ofthe transfer; and
(2) identifies the U.S. Governmentas the payee (for example,
“USA tax”).
.03 For purposes of this section, state-ments prepared by a
financial institutioninclude statements prepared by a thirdparty
that is contractually obligated toprepare statements for the
financial insti-tution.
.04 A taxpayer’s payment to a Filer (in-cluding a subsidiary’s
payment to its par-ent) is not a payment of tax by the tax-payer.
Therefore, a statement prepared bythe taxpayer’s financial
institution show-ing a transfer from the taxpayer’s accountto the
Filer as payee is not proof of pay-ment. Further, a statement
prepared bythe Filer’s financial institution showing atransfer of
funds from the Filer’s accountto the U.S. Government is not proof
ofpayment because the payment may nothave been made on behalf of
the taxpayer.The taxpayer will need the acknowledge-ment number for
an FTD or FTP madefrom the Filer’s account to establish thatthe FTD
or FTP was made on behalf ofthe taxpayer. The acknowledgementnumber
allows the Service to trace thepayment. The Filer has the
acknowledge-ment number or may obtain it from the Fi-nancial
Agent.
SECTION 13. REFUNDS
No refunds of FTDs or FTPs will bemade through EFTPS. However, a
refundrequest may be made using existing taxrefund procedures. If a
taxpayer’s errorresults in a significant hardship, the tax-payer
may contact the Service at (800)829-1040 for assistance.
SECTION 14. DISASTERPROCEDURES
.01 A taxpayer’s ability to make FTDsand FTPs timely may be
affected by thetime, severity, and extent of a major disas-ter. In
such circumstances, the Serviceprovides relief through the
nonassertionor abatement of certain penalties. TheService
publicizes the relief for a particu-lar disaster area through the
publication ofa News Release, Notice, or Announce-ment. Generally,
the Service identifiesthe taxpayers who qualify for this
disasterrelief.
.02 If a disaster affects a Filer, the Filershould provide the
Service with the infor-mation necessary to identify those FTDsand
FTPs of taxpayers outside the disasterarea which were or will be
late due to thedisaster. The Service will then determineif the
nonassertion or abatement of certainpenalties is appropriate.
.03 In addition, if a Bulk Filer’s pri-mary processing system is
affected by adisaster and the Bulk Filer’s backup pro-cessing
system fails, the Bulk Filer mayuse an emergency bulk ETA
transactionunder which the transfer of funds occursbefore the
transmission of the related pay-ment information.
SECTION 15. RESPONSIBILITIES OFA FILER
.01 Each Filer must: (1) comply with this revenue proce-
dure and the applicable implementationguide (Implementation
Guide for EFTPSBatch Filers or Implementation Guide forEFTPS Bulk
Filers);
(2) maintain a high degree of in-tegrity, compliance, and
accuracy;
(3) ensure that FTDs and FTPs areaccurately and timely made;
(4) ensure the security of all trans-mitted information; and
(5) ensure that after a disabling eventthe Filer is able to
operate its Batch Fileror Bulk Filer programs with minimal
in-terruption (generally, less than 24 hours).
.02 A Filer that is not the taxpayermust:
(1) retain copies of each Authoriza-tion and each enrollment at
its principalplace of business for 4 years after the pre-scribed
due date of the last return towhich the any FTD or FTP relates,
unless
April 27, 1998 16 1998–17 I.R.B.
-
the Filer is otherwise notified by the Ser-vice;
(2) retain any payment information(including acknowledgement
numbers) atits principal place of business for 4 yearsafter the
prescribed due date of the returnto which the FTD or FTP relates,
unlessthe Filer is otherwise notified by the Ser-vice. A shorter
retention period for pay-ment information may be substituted
forthis “4-year” retention period, providedthe Filer notifies the
taxpayer in writingthat the Filer will not be retaining the
pay-ment information after the shorter reten-tion period and the
Filer gives such infor-mation to the taxpayer. The shorterretention
period must be at least 90 days;and
(3) advise the taxpayer to enroll it-self separately in EFTPS.
If the Filer isnot authorized to make all the taxpayer’srequired
FTDs and FTPs, the taxpayer’sseparate enrollment will allow the
tax-payer to make its own FTDs and FTPsthrough EFTPS. To enroll
separately, ataxpayer must submit a completed Form9779, EFTPS
Business Enrollment Form,or Form 9783, EFTPS Individual Enroll-ment
Form, to the EFTPS EnrollmentProcessing Center at the address
providedin the applicable form’s instructions. SeeRev. Proc. 97-33
for more information.
.03 A Filer that is the taxpayer must:(1) absent a specific
retention period
prescribed by regulations, retain the pay-ment information and
any supporting ma-terial at its principal place of business foras
long as the contents thereof may be-come material in the
administration ofany internal revenue law; and
(2) retain copies of each enrollmentat its principal place of
business for 4years after the prescribed due date of thereturn to
which the last FTD or FTP re-lates, unless otherwise notified by
theService.
SECTION 16. ADVERTISINGSTANDARDS
.01 A Filer must comply with the ad-vertising and solicitation
provisions of 31C.F.R. Part 10 (Treasury Department Cir-cular No.
230). This circular prohibits theuse or participation in the use of
any formof public communication containing afalse, fraudulent,
misleading, deceptive,unduly influencing, coercive, or
unfairstatement or claim.
.02 A Filer must adhere to all relevantfederal, state, and local
consumer protec-tion laws that relate to advertising and
so-liciting.
.03 A Filer must not use the Service’sname, “Internal Revenue
Service” or“IRS”, within a firm’s name.
.04 A Filer must not use improper ormisleading advertising in
relation toEFTPS.
.05 Advertising materials must notcarry the Service, FMS, or
other TreasurySeals.
.06 If a Filer uses radio or televisionbroadcasting to
advertise, the broadcastmust be pre-recorded. The Filer mustkeep a
copy of the pre-recorded advertise-ment for a period of at least 36
monthsfrom the date of the last transmission oruse.
.07 If a Filer uses direct mail or faxcommunications to
advertise, the Filermust retain a copy of the actual mailing orfax,
along with a list or other descriptionof the firms, organizations,
or individualsto whom the communication was mailed,faxed, or
otherwise distributed for a pe-riod of at least 36 months from the
date ofthe last mailing, fax, or distribution.
.08 If a Filer uses a Web site or printmedia (including
newspapers, magazines,or yellow pages) to advertise, the Filermust
retain a copy of the advertising for aperiod of at least 36 months
from the dateof the last posting or publication.
.09 Acceptance in the Batch Filer orBulk Filer programs is not
an endorse-ment by the Service, FMS, or the Trea-sury Department of
the quality of the ser-vices provided by the Filer.
SECTION 17. REASONS FORSUSPENSION
.01 The Service reserves the right tosuspend a Filer from the
Batch Filer orBulk Filer programs for the following rea-sons (this
list is not all-inclusive):
(1) failing to submit payment infor-mation in accordance with
this revenueprocedure and the applicable implementa-tion
guides;
(2) failing to maintain and makeavailable the required records
for the pe-riod specified in section 15 of this rev-enue
procedure;
(3) submitting payment informationon behalf of taxpayers for
which the Ser-vice did not receive Authorizations;
(4) failing to abide by the advertisingstandards in section 16
of this revenueprocedure;
(5) failing to cooperate with the Ser-vice’s efforts to monitor
Filers and inves-tigate abuse in the Batch Filer or BulkFiler
programs; or
(6) generating significant complaintsabout the Filer’s
performance in the BatchFiler or Bulk Filer programs.
.02 If the Service informs a Filer that acertain action is a
reason for suspensionand the action continues, the Service maysend
the Filer a notice proposing suspen-sion of the Filer from the
Batch Filer orBulk Filer program. However, a noticeproposing
suspension may be sent with-out a warning if the Filer’s action
indi-cates an intentional disregard of rules. Anotice proposing
suspension will describethe reason(s) for the proposed
suspension,and indicate the length of the suspensionand the
conditions that need to be met be-fore the suspension will
terminate.
SECTION 18. ADMINISTRATIVEREVIEW PROCESS FOR
PROPOSEDSUSPENSION
.01 A Filer that receives a noticeproposing suspension from the
BatchFiler or Bulk Filer program, as describedin section 17.02 of
this revenue proce-dure, may request an administrative re-view
prior to the proposed suspensiontaking effect.
.02 The request for an administrativereview must be in writing
and contain de-tailed reasons, with supporting documen-tation, for
withdrawal of the proposedsuspension.
.03 The written request for an adminis-trative review and a copy
of the noticeproposing suspension must be deliveredto the address
designated in the noticewithin 30 days of the effective date on
thenotice.
.04 After consideration of the writtenrequest for an
administrative review, theService will either issue a suspension
let-ter or notify the Filer in writing that theproposed suspension
is withdrawn.
.05 If a Filer receives a suspension let-ter, the Service’s
subsequent determina-tion of whether a reason for suspensionhas
been corrected is not subject to ad-ministrative review or
appeal.
.06 Failure to submit a written requestfor an administrative
review within the
1998–17 I.R.B. 17 April 27, 1998
-
30-day period described in section 18.03of this revenue
procedure irrevocably ter-minates the Filer’s right to an
administra-tive review of the proposed suspension,and the Service
will issue a suspensionletter.
SECTION 19. EFFECT OFSUSPENSION
.01 The Filer’s suspension will con-tinue for the length of time
specified inthe suspension letter, or until the condi-tions for
terminating the suspension havebeen met, whichever is later.
.02 After suspension, a Filer may sub-mit an FTD under the Batch
Filer or BulkFiler program only if the FTD is due notmore than 30
days after the effective dateon the suspension letter. No FTPs may
besubmitted by the Filer under the BatchFiler or Bulk Filer
programs during thesuspension period.
.03 A Filer must provide written notifi-cation of a suspension
from the BatchFiler or Bulk Filer programs to each tax-payer in the
program(s) within 10 daysfrom the date on the suspension
letter.This notification must be provided eventhough the Filer may
believe that the Filerwill be able to meet the conditions for
ter-minating the suspension within the 30-day period provided in
section 19.02 ofthis revenue procedure.
.04 A Filer will be able to submit pay-ment information under
the Batch Filer orBulk Filer programs without reregisteringfor
those programs after:
(1) the stated suspension period ex-pires; and
(2) the reason(s) for suspension arecorrected.
SECTION 20. APPEAL OF ASUSPENSION
.01 If a Filer receives a suspension let-ter from the Service,
the Filer is entitledto appeal, by written protest, to the
Ser-vice. The written protest must be deliv-ered to the address
designated on the sus-pension letter. During the appealsprocess,
the suspension remains in effect.
.02 The written protest must be re-ceived by the Service within
30 days ofthe effective date on the suspension letter.The written
protest must contain detailedreasons, with supporting
documentation,for withdrawal of the suspension.
.03 Failure to appeal within the 30-dayperiod described in
section 20.02 of thisrevenue procedure irrevocably terminatesthe
Filer’s right to appeal the suspensionunder section 20.01 of this
revenue proce-dure.
SECTION 21. PENALTIES
.01 Section 6656 imposes a failure-to-deposit penalty if a
taxpayer does notmake a timely FTD, unless such failure isdue to
reasonable cause and not due towillful neglect. SeeRev. Rul.
94–46,1994–2 C.B. 278. Absent reasonablecause, a taxpayer that is
required to de-posit federal taxes by EFTPS is subject tothe
failure-to-deposit penalty if FTDs aremade by means other than
EFTPS (for ex-ample, using a paper FTD coupon). SeeRev. Rul. 95–68,
1995–2 C.B. 272. How-ever, for a taxpayer that was first requiredto
deposit by EFTPS on or after July 1,1997, this penalty will not be
imposedsolely by reason of a failure to deposit byEFTPS prior to
July 1, 1998.
.02 Section 6655 imposes a penalty forunderpayments of estimated
tax by a cor-poration, private foundation, tax-exemptorganization,
or qualified settlement fund.
.03 Section 6651 imposes a failure-to-pay penalty if a taxpayer
does not make atimely FTP, unless such failure is due toreasonable
cause and not due to willfulneglect.
SECTION 22. FORMS,PUBLICATIONS, IMPLEMENTATIONGUIDES, AND
ADDITIONALINFORMATION
.01 A Filer may obtain copies of thisrevenue procedure,
enrollment forms(Forms 9779 and 9783), implementationguides,
payment instruction booklets, reg-istration letters, and additional
informa-tion on EFTPS by calling EFTPS Cus-tomer Service at (800)
945-0966 (FirstChicago) or (800) 555-4477 (Nations-Bank).
.02 A Filer may obtain enrollmentforms and Authorizations (Forms
8655)by calling the IRS Distribution Center at(800) TAX-FORM ((800)
829-3676).
.03 A Filer may obtain information onthe submission of
Authorizations by call-ing the EFTPS Coordinator at (901) 546-4103
(not a toll-free call).
SECTION 23. EFFECT ON OTHERDOCUMENTS
Section 9.03 of Rev. Proc. 97–33,1997–30 I.R.B. 10, 13, is
modified to pro-vide the same rule (regarding the
FRB’snonacceptance of late ETA payments) asset forth in section
11.04 of this revenueprocedure.
SECTION 24. EFFECTIVE DATE
.01 In general. This revenue procedureis effective April 27,
1998.
.02 Grandfather rule.A power of attor-ney on Form 2848, Power of
Attorney andDeclaration of Representative, or otherdocument that
satisfies the requirementsof § 601.503(a) of the Statement of
Proce-dural Rules, that was submitted to theService on or before
April 27, 1998, willbe treated as an Authorization for pur-poses of
this revenue procedure, eventhough it does not comply with
section7.02 of this revenue procedure.
SECTION 25. PAPERWORKREDUCTION ACT
The collections of information con-tained in this revenue
procedure havebeen reviewed and approved by the Of-fice of
Management and Budget in accor-dance with the Paperwork Reduction
Act(44 U.S.C. 3507) under control number1545-1601.
An agency may not conduct or sponsor,and a person is not
required to respond to,a collection of information unless the
col-lection of information displays a validcontrol number.
The collections of information in thisrevenue procedure are in
sections 5, 6, 7,8, 12, 14, 15, and 16 of this revenue pro-cedure.
This information is required toimplement EFTPS, and verify that
tax-payers have met their obligations to paytheir taxes and make
FTDs by EFTPS.This information will be used to identifypersons
paying taxes and making FTDson behalf of taxpayers and to credit
tax-payers’ tax accounts for FTDs and FTPsmade through EFTPS. The
collections ofinformation are mandatory. The likely re-spondents
are business or other for-profitinstitutions.
The estimated total annual reportingand recordkeeping burden
will be 51,885hours.
April 27, 1998 18 1998–17 I.R.B.
-
The estimated annual burden per re-spondent/recordkeeper will
vary from 71hours to 91 hours, depending on individ-ual
circumstances, with an estimated aver-age of 74.33 hours. The
estimated number
of respondents and recordkeepers is 620. The estimated annual
frequency of re-
sponses is on occasion. Books or records relating to a
collec-
tion of information must be retained as
long as their contents may become mater-ial in the
administration of any internalrevenue law. Generally tax returns
andtax return information are confidential, asrequired by 26 U.S.C.
6103.
1998–17 I.R.B. 19 April 27, 1998
-
April 27, 1998 20 1998–17 I.R.B.
Partial Withdrawal of, andAmendment to, Notice ofProposed
Rulemaking; Notice of Proposed Rulemaking andNotice of Public
Hearing
Adjustments Following Sales ofPartnership Interests
REG–209682–94
AGENCY: Internal Revenue Service(IRS), Treasury.
ACTION: Partial withdrawal of notice ofproposed rulemaking,
amendment to no-tice of proposed rulemaking; notice ofproposed
rulemaking and notice of publichearing.
SUMMARY: This document withdrawsa portion of the notice of
proposed rule-making published in the Federal Regis-ter, February
16, 1984 (49 F.R. 5940);contains proposed regulations relating
tothe optional adjustments to the basis ofpartnership property
following certaintransfers of partnership interests undersection
743, the calculation of gain orloss under section 751(a) following
thesale or exchange of a partnership interest,the allocation of
basis adjustmentsamong partnership assets under section755, and the
allocation of a partner’sbasis in its partnership interest to
proper-ties distributed to the partner by the part-nership under
section 732(c); and, finally,amends proposed regulations relating
tothe computation of a partner’s propor-tionate share of the
adjusted basis of de-preciable property (or depreciable
realproperty) under section 1017. Thechanges are necessary to
provide clearerguidance on the the proper application ofthese
sections and will effect partnershipsand partners where there are
transfers ofpartnership interests, distributions ofproperty, or
elections under sections108(b)(5) or (c). In addition, the
pro-posed regulations under section 732(c)reflect changes to the
law made by theTaxpayer Relief Act of 1997.
DATES: Written comments must be re-ceived by April 29, 1998.
Outlines of top-ics to be discussed at the public hearingscheduled
for Wednesday, July 8, 1998, at
10 a.m. must be received by Wednesday,June 24, 1998.
ADDRESSES: Send submissions to:CC:DOM:CORP:R
(REG–209682–94),room 5226, Internal Revenue Service,POB 7604, Ben
Franklin Station, Wash-ington, DC 20044. Submissions may behand
delivered between the hours of 8a.m. and 5 p.m. to:
CC:DOM:CORP:R(REG–209682–94), Courier’s Desk, In-ternal Revenue
Service, 1111 ConstitutionAvenue, NW, Washington, DC.
Alternatively, taxpayers may submitcomments electronically via
the internetby selecting the “Tax Regs” option on theIRS Home Page,
or by submitting com-ments directly to the IRS internet site
athttp://www.irs.ustreas.gov/prod/tax_regs/comments.html.
The public hearing will be held in theIRS Auditorium, Internal
Revenue Build-ing, 1111 Constitution Avenue, NW,Washington, DC.
FOR FURTHER INFORMATION CON-TACT: Concerning the regulations,
TerriA. Belanger, (202) 622-3070; concerningsubmissions and the
hearing, LaNitaVanDyke, (202) 622-7180 (not toll-freenumbers).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information con-tained in this notice of
proposed rulemak-ing has been submitted to the Office ofManagement
and Budget for review in ac-cordance with the Paperwork
ReductionAct of 1995 (44 U.S.C. 3507(d)). Com-ments on the
collection of informationshould be sent to the Office of
Manage-ment and Budget,Attn: Desk Officer forthe Department of the
Treasury, Office ofInformation and Regulatory Affairs,Washington,
DC 20503, with copies tothe Internal Revenue Service, Attn:
IRSReports Clearance Officer, T:FP, Wash-ington, DC 20224. Comments
on the col-lection of information should be receivedby March 30,
1998. Comments arespecifically requested concerning:
Whether the proposed collection of in-formation is necessary for
the proper per-formance of the functions of the Internal
Revenue Service,including whether theinformation will have
practical utility;
The accuracy of the estimated burdenassociated with the proposed
collection ofinformation (see below);
How the quality, utility, and clarity ofthe information to be
collected may be en-hanced;
How the burden of complying with theproposed collection of
information maybe minimized, including through the ap-plication of
automated collection tech-niques or other forms of information
tech-nology; and
Estimates of capital or start-up cost andcosts of operation,
maintenance, and pur-chase of service to provide information.
The collection of information in thisproposed regulation is in
§§1.743–1(b),1.743–1(k), and 1.755–1.