this paragraph. The consents of all shareholders may be incorporated in one statement.

(4) Election and consents are binding.-The election and consents under this paragraph are binding and may not be withdrawn.

(c) New shareholders.-Section 1372(e) (1) of the Code provides that an election by a corporation under section 1372 (a) of the Code shall terminate if certain new shareholders do not consent to such election within the time prescribed by regulations. New shareholders of a corporation which makes an election under paragraph (b) of this section may not have consented to the corporation's election under section 1372 (a) of the Code within such prescribed time as a result of a termination of such election under section 1372(e) (5) of the Code prior to the enactment of Public Law 89-389. Therefore, notwithstanding the provisions of section 1372 (e) (1) of the Code, and the regulations thereunder, an election by a corporation under section 1372(a) of the Code shall not be treated as terminated for the failure of any new shareholder to file a timely consent under section 1372(e) (1) of the Code, for any of the taxable years of the corporation between and including the earliest taxable year determined under subparagraph (1) of this paragraph, and the taxable year during which the corporation files an election under paragraph (b) of this section, if

(1) The corporation's election under section 1372(a) of the Code would have terminated for a taxable year under section 1372 (e) (5) of the Code in the event it had not made an election under paragraph (b) of this section, and

(2) A proper consent under section 1372(e) (1) of the Code is filed by such new shareholder with the corporation's election under paragraph (b) of this section.

Because this Treasury decision merely provides temporary regulations designed to inform taxpayers how to make certain elections, it is found unnecessary to issue this Treasury decision with notice and public procedure thereon under section 4(a) of the Administrative Procedure Act, approved June 11, 1946, or subject to the effective date limitation of section 4 (c) of that Act.

(This Treasury decision is issued under the authority contained in section 7805 of the Internal Revenue Code of 1954 (68A Stat. 917; 26 U.S.C. 7805).)

Approved February 20, 1967.
STANLEY S. SURREY,

SHELDON S. COHEN, Commissioner of Internal Revenue.

Assistant Secretary of the Treasury.

(Filed by the Office of the Federal Register on Feb. 27, 1967, 8:45 a.m., and published in the issue of the Federal Register for Feb. 28, 1967, 32 F.R.

(Also Part I, Section 819; 26 CFR 1.819-2.)

T.D. 6913 TITLE 62-INTERNAL REVENUE.-CHAPTER I, SUBCHAPTER A, PART I.— INCOME TAX; TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 1953

Percentage to be used by foreign life insurance companies in com-
puting income tax for the taxable year 1966 and estimated tax for
the taxable year 1967.

DEPARTMENT OF THE TREASURY,
Washington, D.C. 20220.

To Officers and Employees of the Treasury Department and Others
Concerned:

Section 819 of the Internal Revenue Code of 1954 provides for the determination of a percentage to be used in determining a "minimum figure" for each foreign corporation carrying on a life insurance business. Where this minimum figure exceeds such a corporation's surplus held in the United States, the amount of the "policy and other contract liability requirements" (determined under section 805 without regard to section 819), and the amount of the "required interest" (determined under section 809 (a) without regard to section 819), must each be reduced by an amount determined by multiplying such excess by the "current earnings rate" (as defined in section 805 (b) (2)). Accordingly, it is hereby determined that for purposes of computing the 1966 income tax for foreign corporations carrying on a life insurance business a percentage of 15 shall be used in determining the "minimum figure" under section 819.

It is presently anticipated that the data with respect to domestic life insurance companies for 1966 required for the computation of the percentage to be used by foreign corporations carrying on a life insurance business in computing their estimated tax for the taxable year 1967 will not be available in time for the filing of the declaration of estimated tax for such taxable year. Accordingly, it is hereby determined that for purposes of computing the estimated tax for the taxable year 1967 and payments of installments thereof by such corporations a percentage of 15 (the percentage applicable for 1966) shall be used in determining the minimum figure under section 819. No additions to tax shall be made because of any underpayment of estimated tax for the taxable year 1967 which results solely from the use of this percentage.

Because the percentage announced in this Treasury decision is computed from information contained in the income tax returns of doinestic life insurance companies for the year 1965, which are not open to public inspection, the public accordingly cannot effectively participate in the determination of such figure. Therefore, it is found that it is unnecessary to issue this Treasury decision with notice and public procedure thereon under section 553 (b) of Title 5 of the United States Code (Pub. L. 89-554, 80 Stat. 383), or subject to the effective date limitation of subsection (d) of such section.

STANLEY S. SURREY, Assistant Secretary of the Treasury.

(Filed by the Office of the Federal Register on Mar. 1, 1967, 8:50 a.m., and published in the issue of the Federal Register for Mar. 2, 1967, 32 F.R. 3446)

26 CFR 601.201: Rulings and determination letters.

Rev. Proc. 67-1

Outline of the general procedures of the Internal Revenue Service relating to issuing rulings and determination letters to taxpayers and entering into closing agreements as to specific issues, and an explanation of the rights and responsibilities of taxpayers under these procedures.

Revenue Procedure 62-28, C.B. 1962-2, 496, superseded.

SECTION 1. PURPOSE.

The purpose of this Revenue Procedure is to describe the general procedures of the Internal Revenue Service in issuing rulings and determination letters to taxpayers and in entering into closing agreements on specific issues as to the interpretation or application of the Federal tax laws (other than those under the jurisdiction of the Alcohol and Tobacco Tax Division). This Revenue Procedure is intended to inform taxpayers and their representatives where they may direct requests for rulings, determination letters, or closing agreements, and the procedures to be followed in order to promote the efficient handling of their inquiries.

SEC. 2. GENERAL PRACTICE AND DEFINITIONS.

.01 It is the practice of the Service to answer inquiries of individuals and organizations, whenever appropriate in the interest of sound tax administration, as to their status for tax purposes and as to the tax effects of their acts or transactions. One of the functions of the National Office of the Service is to issue rulings in such matters. District Directors of Internal Revenue apply the statutes, regulations, Revenue Rulings, and other precedents published in the Internal Revenue Bulletin in the determination of tax liability, the collection of taxes, and the issuance of determination letters in answer to taxpayers' inquiries or requests. For purposes of this Revenue Procedure any reference to district director or district office also includes the office of the Director, Office of International Operations, where appropriate.

02 A "ruling" is a written statement issued to a taxpayer or his authorized representative by the National Office which interprets and applies the tax laws to a specific set of facts. Rulings are issued only by the National Office. The issuance of rulings is under the general supervision of the Assistant Commissioner (Technical) and has been largely redelegated to the directors of three divisions: Director, Income Tax Division; Director, Exempt Organizations and Pension Trust Division; and Director, Miscellaneous Tax Division.

.03 A "determination letter" is a written statement issued by a District Director in response to an inquiry by an individual or an organization, which applies the principles and precedents previously announced by the National Office to the particular facts involved. Determination letters are issued only where a determination can be made on the basis of clearly established rules as set forth in the statutes. Treasury Decisions or regulations, or by rulings, opinions, or court decisions published in the Internal Revenue Bulletin. Where such a determination cannot be made, such as where the question presented involves a novel issue or the matter is excluded from the jurisdiction of a District Director by the provisions of section 4 of this Revenue Procedure, a determination letter will not be issued.

.04 An "information letter" is a statement issued either by the National Office or by a District Director which does no more than call attention to a well-established interpretation or principle of tax law, without applying it to a specific set of facts. An information letter may be issued when the nature of the request from the individual or the organization suggests that it is seeking general information, or where the request does not meet all the requirements of section 6 of this Revenue Procedure, and it is believed that such general information will assist the individual or organization.

05 A "Revenue Ruling" is an official interpretation by the Service which has been published in the Internal Revenue Bulletin. Revenue Rulings are issued only by the National Office and are published for the information and guidance of taxpayers, Internal Revenue Service officials, and others concerned.

.06 A "closing agreement," as the term is used herein, is an agreement between the Commissioner of Internal Revenue or his delegate and a taxpayer with respect to a specific issue or issues entered into pursuant to the authority contained in section 7121 of the Internal Revenue Code. Such a closing agreement is based on a ruling which has been signed by the Commissioner or his delegate and in which it is indicated that a closing agreement will be entered into on the basis of the holding of the ruling letter. Closing agreements are final and conclusive except upon a showing of fraud, malfeasance, or misrepresentation of material fact. They may be entered into where it is advantageous to have the matter permanently and conclusively closed, or where a taxpayer can show good and sufficient reasons for an agreement and the Government will sustain no disadvantage by its consummation.

SEC. 3. RULINGS ISSUED BY THE NATIONAL OFFICE.

.01 In income and gift tax matters, the National Office issues rulings on prospective transactions and on completed transactions before the return is filed. However, rulings will not ordinarily be issued if the identical issue is pending before the Appellate Division or if the identical issue is also involved in a return of the taxpayer already filed for a taxable period with respect to which the statutory period of limitations on assessment or refund of tax has not expired. The National Office issues rulings involving qualifications of plans under section 401 of the Code or the exempt status of organizations under section 501 or 521 of the Code, only to the extent provided in Revenue Procedure 67-4, page 565, this Bulletin, and Revenue Procedure 67-3, page 560, this Bulletin, respectively. The National Office will not issue rulings with respect to the replacement of involuntarily converted property, even though replacement has not been made, if the taxpayer has filed a return for the taxable year in which the property was converted. However, see section 4.06 of this Revenue Procedure as to the authority of District Directors to issue determination letters in this connection.

02 In estate tax matters, the National Office issues rulings with respect to transactions affecting the estate tax of a decedent before the estate tax return is filed. It will not rule with respect to such matters after the estate tax return has been filed, nor will it rule on

270 829-67-36

matters relating to the application of the estate tax to property or the estate of a living person.

.03 In employment and excise tax matters, the National Office issues rulings with respect to prospective transactions and to completed transactions either before or after the return is filed. However, the National Office will not ordinarily rule with respect to an issue, whether related to a prospective or a completed transaction, if it knows or has reason to believe that the same or an identical issue is before any field office in an active examination or audit of the liability of the same taxpayer for the same or a prior period, or is being considered by a branch office of the Appellate Division.

.04 Ordinarily, the Service will not issue rulings to business, trade, or industrial associations, or to other similar groups relating to the application of the tax laws to members of the groups. However, rulings may be issued to such groups or associations relating to their own tax status or liability, provided this is not an issue before any field office in an active examination or audit of the liability of the same taxpayer for the same or a prior period or is not being considered before a branch office of the Appellate Division.

SEC. 4. DETERMINATION LETTERS ISSUED BY DISTRICT DIRECTORS.

.01 In income and gift tax matters, District Directors issue determination letters in response to taxpayers' requests submitted to their offices involving completed transactions which affect returns required to be filed in their districts, but only if the question presented is covered specifically by statute, Treasury Decision or regulation, or specifically by a ruling, opinion, or court decision published in the Internal Revenue Bulletin. A determination letter will not usually be issued with respect to a question which involves a return to be filed by the taxpayer if the identical question is involved in a return or returns already filed by the taxpayer. District Directors may not issue determination letters as to the tax consequence of prospective or proposed transactions, except as provided in paragraphs .05 and .06, below.

.02 In estate tax matters, District Directors issue determination letters in response to requests submitted to their offices affecting the estate tax returns of decedents which will be filed in their districts, but only if the questions presented are specifically covered by statute, Treasury Decision, or regulations, or specifically by a ruling, opinion, or court decision published in the Internal Revenue Bulletin. District Directors may not issue determination letters relating to matters involving the application of the estate tax to property or the estate of a living person.

.03 In employment and excise tax matters, District Directors issue determination letters in response to requests from taxpayers who have filed or who are required to file returns in their districts, but only if the questions presented are covered specifically by statute, Treasury Decision, or regulations, or specifically by a ruling, opinion, or court decision published in the Internal Revenue Bulletin. Because of the impact of these taxes upon the business operation of the taxpayer and because of special problems of administration both to the Service and to the taxpayer, District Directors may take appropriate action in regard to such requests, whether they relate to completed or prospective transactions or returns previously filed or to be filed.