or claims to have furnished the greater amount of support, the bill provides an additional special rule. Under this special rule, each parent is entitled to receive an itemized statement of the expenditures upon which the other's claim of support is based. These statements are to be provided by each parent and furnished to the other parent in conformity with the regulations in this regard that are prescribed by the Secretary of the Treasury or his delegate. The bill also provides that the Secretary of the Treasury or his delegate is to prescribe such regulations as are deemed necessary to carry out the purposes of these new provisions. If a child is classified as a dependent under the provisions of the bill this status will also be applicable with respect to other provisions of the Internal Revenue Code where such a determination is necessary to their operation. For example, a child who is determined to be a dependent of one of his parents under the provisions of this bill is also to be considered a dependent of that parent for purposes of the provision of existing law which provides a deduction for medical and dental expenses. The amendments made by the bill are to apply with respect to taxable years beginning after December 31, 1966. IV. TECHNICAL EXPLANATION Subsection (a) of the first section of the bill amends section 152 of the Internal Revenue Code of 1954 by adding a new subsection (e) at the end thereof. Under existing law, in the case of divorced or separated parents, the determination of which parent provides over half of the child's support is dependent on the facts in each case. Paragraph (1) of section 152 (e), as added by the bill, provides the general rule that a child (as defined in sec. 151(e) (3) of the code) who (1) receives over half of his support during the calendar year from his parents who are divorced or legally separated under a decree of divorce or separate maintenance, or who are separated under a written separation agreement to which section 71(a)(2) of the code applies, and (2) is in the custody of one or both of his parents for more than one-half of the calendar year, shall be treated, for purposes of section 152(a) of the code, as receiving over half of his support during the calendar year from the parent having custody of the child for a greater portion of the calendar year. It is intended that, in the normal case, the meaning of "custody" shall be determined according to the law of the jurisdiction in which either the decree of divorce or separate maintenance was entered, or the separation agreement was executed. In the situation where parents are divorced or separated during only a portion of a calendar year after having had joint custody of the child, the parent having custody of the child for the greater portion of the remainder of the calendar year will be treated under the general rule as having provided over half of the child's support. Paragraph (2) of section 152 (e), as added by the bill, provides a special rule excepting certain situations from application of the general rule provided by paragraph (1) of new section 152(e). New paragraph (2) provides that the child shall be treated as having received over half of his support from the noncustodial parent during a calendar year if either (1) the decree of divorce or of separate maintenance, or a written agreement between the parents applicable to the taxable year beginning in such calendar year (a separation agreement to which sec. 71(a)(2) applies, or other written agreement), provides that the parent not having custody shall be entitled to any deduction allowable for such child under section 151 of the code and the noncustodial parent provides at least $600 for the support of the child during the calendar year, or (2) the noncustodial parent provides $1,200 or more for the support of such child during the calendar year (or if there is more than one such child, $1,200 or more for all of such children) and the custodial parent does not clearly establish that he provided more for the child's support than did the noncustodial parent. In cases where the noncustodial parent claims the deduction under the provisions of the $1,200 exception, satisfaction of its requirements will result in the noncustodial parent's entitlement to the exemption irrespective of any provision in the decree or written agreement to the contrary. Where the noncustodial parent proves that he has furnished $1,200 of support during the taxable year, the custodial parent shall receive the deduction only if he clearly establishes that he provided more for the support of the child for the calendar year than the other parent. Amounts expended for a child's support are to be treated, for purposes of paragraph (2) of section 152 (e), as added by the bill, as received from the nonens todial parent to the extent that such parent provided amounts for such support. Thus, amounts which the noncustodial parent provides for the support of a child are to be treated as expended for his support whether or not actually so expended. Paragraph (3) of section 152 (e), as added by the bill, provides for an exchange of financial information with respect to child support payments by the parents, if the noncustodial parent claims the deduction under section 151 of the code on the ground that he has provided $1,200 or more for support and the other parent claims that such amount was not furnished, or claims to have provided more for support than the noncustodial parent. The information required by paragraph (3) is an itemization of support expenditures claimed to have been made by each parent. The regulations to be prescribed by the Secretary of the Treasury or his delegate will provide for the manner in which this exchange will be effected. Paragraph (4) of section 152(e), as added by the bill, provides that subsection (e) shall not apply in any case where over half of the support of the child is treated as having been received from the taxpayer under the provisions of section 152 (c) (relating to multiple-support agreements). Paragraph (5) of section 152(e), as added by the bill, provides that the Seeretary or his delegate shall prescribe such regulations as may be necessary to carry out the purposes of new section 152(e). Subsection (b) of the first section of the bill makes a technical amendment to section 152(a) by inserting a reference to new section 152(e). Section 2 of the bill provides that the amendments made by the first section are to be effective with respect to taxable years beginning after December 31. 1966. PART V ADMINISTRATIVE, PROCEDURAL, AND DELEGATION ORDER NO. 8 (Rev. 1) Authority to sign agreements as to liability for personal holding company tax 1. The authority granted to the Commissioner of Internal Revenue and District Directors by 26 CFR 301.7701-9 and 26 CFR 1.547-2 to enter into agreements relating to liability for personal holding company tax, is hereby delegated to the following officials: (a) Assistant Regional Commissioners (Appellate), (b) Chiefs, Appellate Branch Offices, (c) Associate Chiefs, Appellate Branch Offices, (d) Assistant Chiefs, Appellate Branch Offices, (e) Assistant District Directors, (f) Chiefs of District Audit Divisions. 2. The authority delegated to Assistant Chiefs, Appellate Branch offices, is limited to cases in which the net deficiencies or the net overassessment determined by the District Director or by the Director of International Operations did not exceed $50,000 and the determination of the Appellate Division does not involve a net overassessment in excess of $50,000. 3. The above officials, including the District Directors, may not redelegate this authority. 4. This Order supersedes Delegation Order No. 8 issued September 7, 1955 [C.B. 1955-2, 896]. WILLIAM H. SMITH, (Filed by the Office of the Federal Register on Aug. 10, 1967, 8:49 a.m., and published in the issue of the Federal Register for Aug. 11, 1967, 32 F.R. 11646) DELEGATION ORDER NO. 35 (Rev. 2) Agreements as determinations under section 1313(a) (4) of the Internal Revenue 1. Pursuant to the authority granted to the Commissioner of Internal Revenue and District Directors by 26 CFR 301.7701-9 and |