Internal Revenue Bulletins  

March 6, 1989

Internal Revenue Bulletin No. 1989-10

There are no links to the official documents for the years 1989 through 1995. The information below can only be used as help for further research, as there is not enough information here to rely on for official guidance. For that you need to obtain a copy of the complete document.


Comments are invited on a revision of Form 990, Return of Organization Exempt From Income Tax, and Form 990-PF, Return of Private Foundation.


Rev. Rul. 89-23
Inventories; package design costs. Expenditures incurred after December 31, 1986, in connection with the development and design of product packages must be capitalized under section 263A of the Code. Expenditures incurred prior to January 1, 1987, in connection with the development and design of product packages must be capitalized under section 263. In general, the cost of package designs may not be amortized under section 1.167(a)-3 of the regulations because their useful lives cannot be ascertained.

Rev. Rul. 89-34
Federal rates adjusted federal rates; adjusted federal long-term rate, and the long-term exempt rate. For purposes of sections 1274, 1288, 382, and other sections of the Code, tables set forth the rates for March 1989.

Proposed regulations under sections 74, 102 and 274 of the Code relate to the excludability of certain prizes and awards and to the deductibility of certain employee achievement awards.


Notice 89-26
The cost-of-living adjustments applicable to dollar limitations on benefits under qualified defined benefit pension plans and to other provisions affecting such plans are set forth.

Notice 89-27
The weighted average interest rate and the resulting permissible range of interest rates used to calculate current liability for purposes of the full funding limitation of section 412(c)(7) of the Code as amended by the Omnibus Budget Reconciliation Act of 1987 are set forth for plan years beginning in February 1989.


Rev. Rul. 89-35
Payment of social security taxes for back wages. The Service will not follow Bowman v. United States, 824 F.2d 528 (6th Cir. 1987), which held that back wages paid to the taxpayer were subject to social security taxes for the years to which the back wages related and not for the year in which the back wages were received.


The tax implementation agreement between the U. S. and the Virgin Islands is set forth.


Rev. Proc. 89-16
Change in method of accounting; package design costs. A procedure is provided for certain taxpayers to obtain expeditious consent from the Commissioner to change their method of accounting for package design costs to a capitalization method in accordance with Rev. Rul. 89-23.

Rev. Proc. 89-17
Changes in accounting periods; deemed useful life election; package designs. Taxpayers that incur package design costs are allowed to deem the useful lives of certain package designs to be 60 months.

Rev. Proc. 89-22
Areas in which advance rulings will not be issued; discount options. When compensation is realized by a person who, in connection with the performance of services, is granted a nonstatutory option without a readily ascertainable fair market value to purchase stock at a price that is less than the fair market value of the stock on the date the option is granted. Rev. Proc. 89-3 amplified.

Notice 89-24
Guidance in determining the present value of an annuity, an interest for life or for a term of years, or a remainder or reversionary interest for transfers made after April 30, 1989.

Announcement 89-32
An updated edition of Publication 908, Bankruptcy and Other Debt Cancellation, (Revised December 1988), is now available from the Service.

Announcement 89-33
Partnerships and S corporations should follow the provisions of Notice 88-81, 1988-30 I.R.B. 28, in applying the $5,000,000 threshold of section 453A (relating to certain nondealer installment sales).

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