SERVICE OPENS FOUR SAFE HARBOR LEASE ISSUES TO RULING REQUESTS.

Rev. Proc. 88-35

SECTION 1. PURPOSE

This revenue procedure removes from the no-ruling list those rulings that relate to safe harbor leases.

SEC. 2. BACKGROUND

01 Section 5 of Rev. Proc. 88-3 1988-1 I.R.B. 29, contains a list of areas under extensive study in which rulings or determination letters will not be issued until the Service resolves the issue until the Service resolves the issue through publication of a revenue ruling, revenue procedure, regulations, or otherwise.

02 Section 5.09 of Rev. Proc. 88-3, which is entitled "Section 168(f)(8). -- Special Rule for Leases.", includes in the "no-ruling list" certain areas that were specifically reserved in the Temporary Income Tax Regulations under the Economic Recovery Tax Act of 1981, relating to special rules for leases. The areas specifically reserved are:

(1) section 5c.168(f)(8)-8(b)(9) -- retirements and casualties;

(2) section 5c.168(f)(8)-9 -- transfer of investment credit by section 168(f)(8) leases;

(3) section 5c.168(f)(8)-10 -- leases between related parties; and

(4) section 5c.168(f)(8)-11 -- consolidated returns.

03 The Service has decided that no temporary or final regulations will be issued concerning for four no-ruling areas listed in section 5.09 of Rev. Proc. 88-3.

04 Certain transactions, however, raise issues covered by the no-ruling areas listed in section 5.09 of Rev. Proc. 88-3 and are of sufficient significance to warrant issuance of rulings and determination letters. Accordingly, the Service will now entertain requests for rulings and determination letters on issues listed in section 5.09 of Rev. Proc. 88-3 to the extent appropriate.

SEC. 3. PROCEDURE

Rev. Proc. 88-3 is modified by deleting section 5.09.

SEC. 4. COMMENTS OR INQUIRIES

Comments or inquiries regarding this revenue procedure should be addressed to the Associate Chief Counsel (Technical and International), Attention: CC:C:2, Internal Revenue Service, 1111 Constitution Ave., N.W., Washington, D.C. 20224.

SEC. 5. EFFECT ON OTHER DOCUMENTS

Rev. Proc. 88-3 is modified.

SEC. 6. EFFECTIVE DATE

This revenue procedure is effective June 27, 1988, the date of its publication in the Internal Revenue Bulletin.

DRAFTING INFORMATION

The principal author of this revenue procedure is Paul Wright of the Corporation Tax Division. For further information regarding this revenue procedure, contact Mr. Wright on (202) 566-4516 (not a toll- free call).