IRB 1999-6 2/3/99 1:39 PM Page 1 Internal Revenue bulletin ...

1 INCOME TAXRev. Rul. 99 5, page entity to ruling describesthe federal income tax consequences when a single memberlimited liability company that is disregarded as an entity sep-arate from its owner under section 3 of the Pro-cedure and Administration Regulations becomes an entitywith more than one owner that is classified as a partnershipfor federal tax Rul. 99 6, page to disregarded ruling describesthe federal income tax consequences if one person pur-chases all of the ownership interests in a domestic limited li-ability company (LLC) that is classified as a partnershipunder section 3 of the Procedure and Administra-tion Regulations, causing the LLC s status as a partnershipto terminate under section 708(b)(1)(A) of the Rul.

2 99 8, page rates; adjusted federal rates; adjusted federallong-term rate, and the long-term exempt of sections 1274, 1288, 382, and other sectionsof the Code, tables set forth the rates for february 8799, page regulations relate to the treatment of certain invest-ment income under the qualifying income provisions of sec-tion 7704 of the Code and the application of the passive ac-tivity loss rules to publicly traded 8806, page and temporary regulations provide changes to the rulesunder section 411 of the Code regarding qualified retire-ment plan benefits that are protected from reduction by planamendment. The changes were made necessary by the Tax-payer Relief Act of ORGANIZATIONSA nnouncement 99 13, page list is given of organizations now classified as private TAXREG 114663 97, page regulations under section 2056 of the Code relateto the effect of certain administration expenses on the valu-ation of property which qualifies for the estate tax marital orcharitable deduction.

3 A public hearing will be held on April21, 99 10, page housing tax population fig-ures for the various states for determining the 1999 calen-dar year (1) state housing credit ceiling under section 42(h)of the Code, and (2) private activity bond volume cap undersection 146 of the Code are RevenuebbuulllleettiinnBulletin No. 1999 6 february 8, 1999 HIGHLIGHTSOF THIS ISSUET hese synopses are intended only as aids to the reader inidentifying the subject matter covered. They may not berelied upon as authoritative of the TreasuryInternal Revenue ServiceFinding Lists begin on page 1999 -6 2/3/99 1:39 PM Page 1 Mission of the ServiceProvide America s taxpayers top quality service by help-ing them understand and meet their tax responsibilitiesand by applying the tax law with integrity and fairness of Principlesof Internal RevenueTax AdministrationThe function of the Internal Revenue Service is to adminis-ter the Internal Revenue Code.

4 Tax policy for raising revenueis determined by 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 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 .

5 The Revenue is properly protected onlywhen we ascertain and apply the true meaning of the Service also has the responsibility of applying andadministering the law in a reasonable, practical should only be raised by examining officers whenthey have merit, never arbitrarily or for trading 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 should be both reasonable and vigorous. Itshould be conducted with as little delay as possible andwith great courtesy and considerateness.

6 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 1999 -6 2/3/99 1:39 PM Page 2 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.

7 bulletin contents of a permanent nature are consoli-dated semiannually into Cumulative Bulletins, which are soldon a single-copy 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 rulings represent the conclusions of the Service onthe application of the law to the pivotal facts stated in therevenue ruling.

8 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 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 bulletin is divided into four parts as follows:Part I.

9 1986 part includes rulings and decisions based on provisionsof the Internal Revenue Code of II. Treaties and Tax part is divided into two subparts as follows: Subpart A,Tax Conventions, and Subpart B, Legislation and RelatedCommittee III. Administrative, Procedural, and 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 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 first bulletin for each month includes a cumulative indexfor the matters published during the preceding monthly indexes are cumulated on a quarterly andsemiannual basis, and are published in the first bulletin of thesucceeding quarterly and semiannual period, contents of this publication are not copyrighted and may be reprinted freely.

10 A citation of the Internal Revenue bulletin as the source would be sale by the Superintendent of Documents, Government Printing Office, Washington, DC 1999 -6 2/3/99 1:39 PM Page 3 Section 42. Low-IncomeHousing CreditThe adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the monthof february 1999 . See Rev. Rul. 99 8, page 280G. GoldenParachute PaymentsFederal short-term, mid-term, and long-termrates are set forth for the month of february Rev. Rul. 99 8, page 382. Limitation on NetOperating Loss Carryforwardsand Certain Built-In LossesFollowing Ownership ChangeThe adjusted federal long-term rate is set forthfor the month of february 1999 .