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SERVICE ANNOUNCES REVISED PROCEDURE FOR ISSUANCE OF LETTER RULINGS.

JAN. 2, 1986

Rev. Proc. 87-7; 1987-1 C.B. 542

DATED JAN. 2, 1986
DOCUMENT ATTRIBUTES
  • Institutional Authors
    Internal Revenue Service
  • Cross-Reference
    See Internal Revenue Bulletin No. 1987-2, dated Jan. 12, 1987.
  • Jurisdictions
  • Language
    English
  • Tax Analysts Electronic Citation
    87 TNT 1-15
Citations: Rev. Proc. 87-7; 1987-1 C.B. 542

Superseded by Rev. Proc. 88-18

Rev. Proc. 87-7

SECTION 1. PURPOSE

As one step in the process of dealing more efficiently with the need for guidance occasioned primarily by the Tax Reform Act of 1986, this revenue procedure provides, for specific Code sections, new conditions under which the Associate Chief Counsel (Technical) will consider requests for letter rulings pending the adoption of either temporary or final regulations. The objective of these changes is to expand the letter rulings process so that the Service will be able to issue some rulings that previously would have been precluded by the provisions of section 5.07(2) of Rev. Proc. 87-1, 1987-1 I.R.B. 7.

SEC 2. PROCEDURE

01 Section 5.07(2) of Rev. Proc. 87-1 is modified to except from its conditions the following Code sections:

                   TRA-86

 

IRC SECTION(S) SECTIONS SUBJECT

 

______________ ________ _______

 

 

(new) 42 252 Low Income Housing Credit

 

 

48(g) 251 Qualified Rehabilitated Buildings

 

 

55-58 701 Alternative Minimum Tax - Individuals

 

                               and Corporations

 

 

old 57(a)(11) 701 Items of Tax Preference - Intangible

 

new 57(a)(2) Drilling and Development Costs - Oil,

 

                               Gas, and Geothermal

 

 

old 58(i)(2)(C) 701 Optional 10-year Write-off of the

 

old 58(i)(4) Tax Preference Relating to Intangible

 

old 58(i)(6) Drilling and Development Costs

 

new 59(e)

 

 

71 and 215 1843 Revision of the Rules Regarding Excess

 

                               Front-Loading of Alimony

 

 

108 405 Discharge of Indebtedness for Farmers

 

 

141 1301 Private Activity Bond

 

 

143(k)(9) 1301 Treatment of Limited Equity Cooperative

 

                               Housing

 

 

144(a) 1301 Qualified Small Issue Bond (definition)

 

 

145 1301 Qualified 501(c)(3) Bond

 

 

146 1301 Volume Cap

 

 

147(b)(4) 1301 Special Rule for Pooled Financing of

 

                               501(c)(3) Organization

 

 

148 1301 Arbitrage (other than rebate)

 

 

163 511 Nonbusiness Interest Limits -

 

                               Disallowance for Personal Interest

 

 

168(e) 201(a) Classification of Property for the

 

                               Accelerated Cost Recovery System

 

 

168(f)(2) 201 Normalization of Accelerated

 

                               Depreciation for Public Utility

 

                               Property

 

 

170(e)(4) 231 Charitable Deduction for Donation of

 

                               Scientific Equipment

 

 

179 202 Expensing of Depreciation Assets

 

 

263A 803 Capitalization and Inclusion in

 

                               Inventory Costs of Certain Expenses

 

 

280A 143 Disallowance of Expenses of Business

 

                               Use of a Home

 

 

303, subject to 1432(b) Rules for Generation Skipping

 

existing no-rule Transfers

 

limitations

 

 

304(a) 1875 Redemption Through Use of Related

 

                               Corporations

 

 

311,332,333, 631,632 Recognition of Gain or Loss on

 

336,337,338, 633 Distributions of Property in

 

361,368,1374 Liquidation or S Corporation

 

                               Conversion

 

 

382,383 621 Limitation on Net Operating Loss

 

                               Carryforwards and Excess Credit

 

                               Carryforwards

 

 

312 1804(f) Distributions of Appreciated Property

 

 

457 1107 Deferred Compensation Plans - State &

 

                               Local Governments

 

 

465(b)(6) 503 Extension of At Risk Limitations to

 

                               Real Estate

 

 

469 501 Disallowance of Passive Activity

 

                               Losses and Credits

 

 

474 802 Simplified Dollar Value LIFO Method

 

                               for Certain Small Businesses

 

 

562 657 Certain Distributions by RICs Not

 

                               Treated as Preferential Dividends

 

 

672-673 1401-1403 Revision to the Grantor Trust

 

                               Provisions

 

 

846, except sub- 1023(c) Discounting of Unpaid Losses and

 

sections (d) and Certain Unpaid Expenses

 

(e)

 

 

851 653(a)(b) Regulated Investment Companies

 

                   (c)(d)

 

 

2601 - 2663, 1431 Generation Skipping Transfer Tax

 

subject to

 

existing no-

 

rule limitations

 

 

3121(w) 1882 Voluntary Revocation of Election

 

                               Out of FICA by Churches

 

 

7702, except sub- 1825 Life Insurance Contract Defined

 

sections (f)(7)(E)

 

and (g)(1)(D)

 

 

                   SRA-86

 

                   SECTIONS

 

                   ________

 

 

4611, 4661, 4662 Sec. 511-513 Reenactment of Petroleum and Chemical

 

                               Taxes for the Superfund

 

 

                   COBRA

 

                   SECTIONS

 

                   ________

 

 

3121(u) 13205 Extension of Medicare Tax to Newly

 

                               Hired State and Local Government

 

                               Employees

 

 

02 For Code sections listed in section 2.01 above, even if the answer does not seem reasonably certain, the appropriate Branch in the office of the Associate Chief Counsel (Technical) will entertain all ruling requests and do its best to issue a ruling. However, the Service reserves in all cases the right not to rule when the issue cannot be properly resolved in advance of regulations.

03 When the Service has closed a regulations project--see, for example, the extensive list published in IR 86-167 dated December 9, 1986--or does not intend to open a regulations project (see list below), section 5.07 of Rev. Proc. 87-1 does not apply and the appropriate Branch in the office of the Associate Chief Counsel (Technical) will entertain all ruling requests unless the issue is covered by the no-rule provisions of section 7 of Rev. Proc. 87-1 or by Rev. Proc. 87-3, 1987-1 I.R.B. ____, or later updates of these two revenue procedures. The following is a partial list of Tax Reform Act of 1986 Code sections for which a tentative decision has been made not to open up a regulations project:

                   TRA-86

 

IRC SECTION(S) SECTIONS SUBJECT

 

______________ ________ _______

 

 

38, 46 212 Effective 15-year Carryback of

 

                                Existing Carryforwards of Steel

 

                                Companies

 

 

38, 46 213 Effective 15-year Carryback of

 

                                Existing Carryforwards of Qualified

 

                                Farmers

 

 

48(1) 421 Extension of the Energy Investment

 

                                Credit for Solar, Geothermal, Ocean

 

                                Thermal, and Biomass Property.

 

 

49 211 Repeal of Regular Investment Tax

 

                                Credit

 

 

51 1701 Extension and Revision of Targeted

 

                                Jobs Credit

 

 

150(b) and (c) 1301 Change in Use of Facilities

 

 

162 142 Educational Travel

 

 

168 203 and Transitional Rules for Property

 

                   204 Depreciable Under Section 167(a) of

 

                                the Code

 

 

265(2) 902 100% Disallowance of Financial

 

                                Institution Interest Deduction Allow-

 

                                able to Tax-Exempt Obligations

 

 

274 142 Expenditures for Meals, Travel and

 

                                Entertainment

 

 

301, 302, 1059 614(e) Reduction of Stock Basis for Untaxed

 

                                Portion of Extraordinary Dividends

 

 

332, 338 1804(g)(6) 80-percent Voting and Value Test

 

                   and (8)

 

 

361 1804(g) Recognition of Gain on Distributions

 

                                of Property in a Reorganization

 

 

451(f) 821 Utilities Using Accrual Accounting

 

 

469 502(c) Transition Rule for Low-Income

 

                                Housing

 

 

832(b) 1021(c) Inclusion in Income of 20 Percent

 

                                of Unearned Premium Reserve

 

 

1092 331 Straddles - Year End Rule

 

 

1254 413 Gain From Disposition of Interest

 

                                in Oil, Gas, Geothermal, or Other

 

                                Mineral Properties

 

 

1504(a) 1804(e)(4) Exception for Alaska Native Corpora-

 

                                tions to File Consolidated Income Tax

 

                                Returns Without Equity Ownership in

 

                                Subsidiaries

 

 

04 The appropriate Branch Chief in the office of the Associate Chief Counsel (Technical) will discuss with taxpayers or their representatives whether a ruling concerning any Code section not listed in sections 2.01 and 2.03 above can be issued.

SEC 3. EFFECT ON OTHER REVENUE PROCEDURES

Rev. Proc. 87-1 is modified.

SEC 4. EFFECTIVE DATE

This revenue procedure is effective for requests received prior to January 12, 1987, the date of its publication in the Internal Revenue Bulletin, as well as to those received thereafter.

DOCUMENT ATTRIBUTES
  • Institutional Authors
    Internal Revenue Service
  • Cross-Reference
    See Internal Revenue Bulletin No. 1987-2, dated Jan. 12, 1987.
  • Jurisdictions
  • Language
    English
  • Tax Analysts Electronic Citation
    87 TNT 1-15
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