The Internal Revenue Bulletin is issued weekly and contains rulings, procedures and decisions published by the Internal Revenue Service and all Treasury Department regulations (including Treasury Decisions) pertaining to Internal Revenue matters. It may be obtained on a subscription basis from the Superintendent of Documents, Government Printing Office, Washington 25, D.C., for $6.00 per year-foreign $8.75. Single copies of the Bulletin-20 cents each.

The contents of the weekly Bulletin are consolidated at least semiannually into a permanent, indexed, Cumulative Bulletin. These are sold on a single-copy basis. Subscribers to the weekly Bulletin will be notified when copies of the Cumulative Bulletins are available.

Certain issues of Cumulative Bulletins are out of print and are, therefore not available. Persons desiring available Cumulative Bulletins which are listed below may obtain them from the Superintendent of Documents at prices as follows:

1 House, Senate, and conference reports on revenue bills enacted as the act of October 3, 1913, the act of October 22, 1914, and the Revenue Acts of 1916 to 1938, inclusive and on amendment to such acts.

2 Printed in one volume.

All inquiries in regard to these publications and subscriptions should be sent to the Superintendent of Documents, Government Printing Office, Washington 25, D.C.

page 14

The Revenue Service will follow the decisions in W. J. Rev. Rul. 59–96,
Shirah et ux. and J. W. Parrish et ux., in determining
whether an amount paid to a police official is an
excludable "statutory subsistence allowance" within
the meaning of section 120 of the 1954 Code; Reve-
nue Ruling 57-46, modified.

The Revenue Service will also follow the decision in Rev. Rul. 59–93,
Charles S. Weil, et al., relating to the treatment of
certain periodic payments to a wife for the support
of herself and minor children, but only in cases in-
volving similar facts and circumstances.

page 12.

Where a property settlement agreement, read as a whole, Ct. D. 1834,
makes it clear that the payments to be made are in-
tended in part for the support of children and in part
for alimony, that part which is for the support of
children is not deductible by the divorced husband.

page 97.

page 102.

The decision in Westerhaus Company, et al., relating to Rev. Rul. 59-97,
the sales of stock of one wholly-owned corporation to
another wholly-owned corporation, will be followed
by the Revenue Service in all cases involving this
question for years to which the 1939 Code applies;
Revenue Ruling 55-15, revoked.

The Revenue Service discusses the income tax treatment Rev. Rul. 59-91,
of the gain realized by a corporation from the sale
of lots subdivided from land previously held as an
investment.

page 10.

page 11.

Funds granted to a taxpayer for a research program Rev. Rul. 59–92,
which he merely administers, and from which he re-
ceives no salary or other economic benefit, are not
includible in the recipient's gross income.

page 14.

Where, upon termination of services, a participant in Rev. Rul. 59-94,
a qualified employees' profit-sharing trust elects to
take an annuity instead of a lump sum distribution,
no part of the lump sum shall be includible in his
gross income at the time such sum became payable.
(Continued on page 3)

Finding List begins on page 107.

TREASURY DEPARTMENT

497089-59-1

• INTERNAL REVENUE SERVICE

INTRODUCTION

The Internal Revenue Bulletin is the authoritative instrument of the Commissioner of Internal Revenue for the announcement of official rulings and procedures of the Internal Revenue Service, and for the publication of Treasury Decisions, Executive Orders, tax conventions, legislation, and court decisions pertaining to internal revenue matters. Other items considered to be of general interest are also published in the Bulletin, such as announcements relating to proposed regulations published with notice of proposed rulemaking, announcements relating to decisions of the Tax Court of the United States, announcements of the disbarment and suspension of attorneys and agents from practice before the Treasury Department, Delegation Orders, etc.

It is the policy of the Service to publish in the Bulletin all substantive and procedural rulings of importance or of general interest, the publication of which is considered necessary to promote a uniform application of the laws administered by the Service. It is also the policy to publish all rulings and statements of procedures which supersede, revoke, modify, or amend any published ruling or procedure. Except where otherwise indicated, published rulings and procedures apply retroactively. Rulings and statements of procedures relating solely to matters of internal management are not published. However, statements of internal practices and procedures affecting rights or duties of taxpayers, or industry regulation, which appear in internal management documents, are published. Revenue Rulings and Revenue Procedures are based upon rulings and internal management documents prepared in the various divisions of the National Office, including the Office of the Chief Counsel for the Internal Revenue Service. In the preparation of these, caution is exercised to conceal the identity of the taxpayer, as well as any confidentl personal and business information. All Revenue Rulings published in the Bulletin have received the consideration and concurrence of the Chief Counsel.

Revenue Rulings and Revenue Procedures reported in the Bulletin do not have the force and effect of Treasury Department Regulations (including Treasury Decisions), but are published to provide precedents to be used in the disposition of other cases, and may be cited and relied upon for that purpose. Since each published ruling represents the conclusion of the Service as to the application of the law to the entire state of facts involved, Service personnel and others concerned are cautioned against reaching the same conclusions in other cases unless the facts and circumstances are substantially the same. In applying rulings and procedures published in the Bulletin, (Continued on page 4)

HIGHLIGHTS OF THIS ISSUE-(Continued from page 1)

INCOME TAX-Continued.

Failure to furnish information required by section 6033 Rev. Rul. 59-95,
of the Code may cause an organization to lose its tax
exempt status.

Form 2106, Statement of Employee Business Expense,
has been revised to reflect the changes in the report-
ing requirements for employee business expenses.
Amendments have been proposed to the regulations
under section 22(a)–23 of the 1939 Code and sec-
tion 61 of the 1954 Code, relating to the tax treat-
ment of patronage dividends received from coopera-
tive associations.

page 95. Announcement 59-29, page 105.

Announcement,

page 7.

page 7.

Regulations have been proposed relating to (1) the Announcement,
election of certain small business corporations as to
taxable status and (2) the returns of such electing
corporations; also proposed are amendments of the
regulations relating to the change of annual account-
ing period.

TOBACCO TAX:

When the tax on cigars is paid by return, the packages Rev. Proc. 59-7,
must indicate the quantity and the kind of product
contained therein.

ADMINISTRATIVE:

page 104

page 16.

Regulations have been adopted relating to certain pro- T.D. 6364,
cedural and administrative requirements in respect
of records, returns, payments, and related matters
applicable to the taxes imposed by subtitle A of the
1954 Code.

Announcement of action on decisions of the Tax Court Page 8.
of the United States.

INTRODUCTION-(Continued from page 2)

personnel of the Service and others concerned must consider the effect of subsequent legislation, regulations, court decisions, rulings and procedures.

Each published ruling is designated as a "Revenue Ruling," and each published procedure is designated as a "Revenue Procedure." These should be cited by reference to the year of issuance and the Bulletin and page where reported. Thus, Revenue Ruling No. 11 for 1959, which is reported on page 18 of Bulletin No. 2 for 1959, should be cited as "Rev. Rul. 59-11, I.R.B. 1959-2, 18," until it appears in the Cumulative Bulletin, when it should be cited as "Rev. Rul. 59-11, C.B. 1959-1, -" Similarly, Revenue Procedure No. 1 for 1959, which is reported on page 61 of Bulletin No. 6 for 1959, should be cited as "Rev. Proc. 59-1, I.R.B. 1959-6, 61," until such time as it appears in the Cumulative Bulletin. Revenue Rulings are keyed to the applicable sections of the Internal Revenue Code and regulations. The Bulletin is published weekly and may be obtained on a subscription basis from the Superintendent of Documents, as indicated below. The contents of the Bulletin are consolidated at least semiannually into a permanent, indexed, Cumulative Bulletin. These are sold on a single-copy basis. Subscribers to the weekly Bulletin will be notified when copies of the Cumulative Bulletins are available.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington 25, D.C. Price 20 cents (single copy). Subscription price: $6.00 a year; $2.75 additional for foreign mailing.