Internal Revenue Bulletins  

December 01, 2003

Internal Revenue Bulletin No. 2003-48

Links to Official IRS Bulletin Documents listed below are in the Adobe Acrobat PDF Format, and require the appropriate Acrobat Reader to view and/or print.


REG-146692-03(PDF, 80K)
Section 103(a) of the Code provides that, generally, interest on bonds issued by state and local governments is excluded from gross income. "Qualified mortgage revenue bonds" may also be qualified bonds. A bond may only be a qualified mortgage revenue bond if the effective rate of mortgage interest on the mortgages provided with the bond proceeds does not exceed the yield on the bonds by more that 1.125 percentage points. The proposed regulations provide rules for calculating the effective rate of mortgage interest. Specifically, the proposed regulations provide that amounts paid for pool mortgage insurance are to be excluded from the calculation (which results in a lower effective rate of mortgage interest). A public hearing is scheduled for January 28, 2004.

Rev. Proc. 2003-84(PDF, 108K)
Optional election to make monthly 706(a) computations. This procedure allows certain partnerships that invest in tax-exempt obligations to make an election that enables the partners to take into account monthly the inclusions required under sections 702 and 707(c) of the Code and provides rules for partnership income tax reporting under section 6031 for such partnerships. Rev. Proc. 2002-68 modified and superseded.

Rev. Rul. 2003-120(PDF, 52K)
Life insurance companies; computation of required interest. This ruling provides that a life insurance company calculates "required interest" under section 812(b)(2)(A) of the Code using the mean of the amount of the reserve at the beginning of the taxable year and the amount of the reserve at the end of such year.

Rev. Rul. 2003-121(PDF, 49K)
LIFO; price indexes; department stores. The September 2003 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, September 30, 2003.


Announcement 2003-74(PDF, 42K)
This announcement is a public notice of the suspension of the federal tax exemption under section 501(p) of the Code of certain organizations that have been designated as supporting or engaging in terrorist activity or supporting terrorism. Contributions made to these organizations during the period that the organization's tax-exempt status is suspended are not deductible for federal tax purposes.

Announcement 2003-76(PDF, 27K)
Zaire Unlimited of Calumet Park, IL, no longer qualifies as an organization to which contributions are deductible under section 170 of the Code.


Notice 2003-66(PDF, 46K)
2004 social security contribution and benefit base; domestic employee coverage threshold. The Commissioner of the Social Security Administration has announced (1) the OASDI contribution and benefit base for remuneration paid in 2004 and self-employment income earned in taxable years beginning in 2004, and (2) the domestic employee coverage threshold amount for 2004.


Announcement 2003-78(PDF, 47K)
This announcement contains a withdrawal of proposed regulation section 301.7701-3(h), which provided a rule that would have operated to change the classification of a foreign disregarded entity if a so-called "extraordinary transaction" occurred one day before or within one year after the election to treat the entity as disregarded. REG-110385-99 partially withdrawn.

T.D. 9093(PDF, 67K)
Final regulations under section 7701 of the Code contain special rules regarding the entity classification of certain foreign business entities, including a special rule that terminates the grandfathered status of certain foreign business entities upon a 50-percent change of control, and a special rule that clarifies and further modifies the relevancy rules relating to certain foreign eligible entities.

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