RP Final

§ 141(b)(1) of the 1986 Code, an issue
generally meets the private business use
test if more than 10 percent of the
proceeds of the issue are to be used for
any private business use. Under
§ 141(b)(6)(A) of the 1986 Code, private business use means direct or indirect use in a trade or business carried on
by any person other than a governmental unit. Section 145(a) of the 1986
Code also applies the private business
use test of § 141(b)(1) of the 1986
Code, with certain modifications.
(2) Corresponding provisions of
the Internal Revenue Code of 1954 set
forth the requirements for the exclusion
from gross income of the interest on
state or local bonds. For purposes of this
revenue procedure, any reference to a
1986 Code provision includes a reference to the corresponding provision, if
any, under the 1954 Code.
.02 Section 1.141–3(b)(6)(i) of the
Income Tax Regulations provides, in
general, that an agreement by a nongovernmental person to sponsor research
performed by a governmental person
may result in private business use of the
property used for the research, based on
all of the facts and circumstances.
.03 Section 1.141–3(b)(6)(ii) provides
in general that a research agreement
with respect to financed property results
in private business use of that property
if the sponsor is treated as the lessee or
owner of financed property for federal
income tax purposes.
.04 Section 1.145–2(a) provides generally that §§ 1.141–0 through 1.141–15
apply to § 145(a) of the 1986 Code.
.05 Section 1.145–2(b)(1) provides
that, in applying §§ 1.141–0 through
1.141–15 to § 145(a) of the 1986 Code,
references to governmental persons include section 501(c)(3) organizations
with respect to their activities that do
not constitute unrelated trades or businesses under § 513(a) of the 1986
Code.
SECTION 3. DEFINITIONS
.01 Basic research, for purposes of
§ 141 of the 1986 Code, means any
original investigation for the advancement of scientific knowledge not having
a specific commercial objective. For
example, product testing supporting the
trade or business of a specific nongovernmental person is not treated as basic
research.
.02 Qualified user means any state or
local governmental unit as defined in
§ 1.103–1 or any instrumentality

thereof. The term also includes a section
501(c)(3) organization if the financed
property is not used in an unrelated
trade or business under § 513(a) of the
1986 Code. The term does not include
the United States or any agency or
instrumentality thereof.
.03 Sponsor means any person, other
than a qualified user, that supports or
sponsors research under a contract.
SECTION 4. SCOPE
This revenue procedure applies when,
under a research agreement, a sponsor
uses property financed with proceeds of
an issue of state or local bonds subject
to § 141 or § 145(a)(2)(B) of the 1986
Code.
SECTION 5. OPERATING
GUIDELINES FOR RESEARCH
AGREEMENTS
.01 In general. If a research agreement is described in either section 5.02
or 5.03 of this revenue procedure, the
research agreement itself does not result
in private business use.
.02 Corporate-sponsored research. A
research agreement relating to property
used for basic research supported or
sponsored by a sponsor is described in
this section 5.02 if any license or other
use of resulting technology by the sponsor is permitted only on the same terms
as the recipient would permit that use
by any unrelated, non-sponsoring party
(that is, the sponsor must pay a competitive price for its use), with the price
paid for that use determined at the time
the license or other resulting technology
is available for use. Although the recipient need not permit persons other than
the sponsor to use any license or other
resulting technology, the price paid by
the sponsor must be no less than the
price that would be paid by any nonsponsoring party for those same rights.
.03 Cooperative research agreements.
A research agreement relating to property used pursuant to a joint industrygovernmental cooperative research arrangement is described in this section
5.03 if—
(1) Multiple, unrelated sponsors
agree to fund governmentally performed
basic research;
(2) The research to be performed
and the manner in which it is to be
performed (for example, selection of the
personnel to perform the research) is
determined by the qualified user;

21

(3) Title to any patent or other
product incidentally resulting from the
basic research lies exclusively with the
qualified user; and
(4) Sponsors are entitled to no
more than a nonexclusive, royalty-free
license to use the product of any of that
research.
SECTION 6. EFFECTIVE DATE
This revenue procedure is effective
for any research agreement entered into
on or after May 16, 1997. In addition,
an issuer may apply this revenue procedure to any research agreement entered
into prior to May 16, 1997.
DRAFTING INFORMATION
The principal author of this revenue
procedure is Loretta J. Finger of the
Office of Assistant Chief Counsel (Financial Institutions and Products). For
further information regarding this revenue procedure contact Loretta J. Finger
on (202) 622–3980 (not a toll-free call).
26 CFR 601.202: Closing agreements.
(Also Part I, §§ 57, 103, 141, 142, 144, 145, 147,
7121; 1.141–12, 1.142–2, 1.144–2, 1.145–2,
1.147–2.)

Rev. Proc. 97–15
SECTION 1. PURPOSE
This revenue procedure provides a
program under which an issuer of state
or local bonds may request a closing
agreement with respect to outstanding
bonds (1) to prevent the interest on
those bonds from being includible in
gross income of bondholders or (2) to
prevent the interest on those bonds from
being treated as an item of tax preference for purposes of the alternative
minimum tax for bondholders, in each
case as a result of an action subsequent
to the issue date that causes those bonds
to fail to meet certain requirements of
§§ 141 through 150 of the Internal
Revenue Code of 1986 relating to use of
proceeds.
SECTION 2. BACKGROUND
.01 Under § 103(a) of the 1986
Code, gross income does not include
interest on any state or local bond if the
applicable requirements of §§ 141
through 150 of the 1986 Code are
satisfied. These requirements include requirements relating to use of bond proceeds that must be met after the issue
date.

.02 Sections 1.141–12, 1.142–2,
1.144–2, 1.145–2, and 1.147–2 of the
Income Tax Regulations provide that, in
the event that an action taken subsequent to the issue date causes an issue
of state or local bonds to fail to meet
certain requirements relating to use of
proceeds, an issuer may generally take
certain remedial actions to prevent interest on the bonds from becoming includible in gross income. Application of
these remedial action provisions may
not be possible or practicable for issuers
in some cases.
.03 The remedial action permitted in
§ 1.141–12(f) applies to bonds that
were not treated as private activity
bonds on their issue date. Under this
provision, if a subsequent action causes
bonds of an issue to meet the private
activity bond tests of § 141 of the 1986
Code, the bonds may be treated as
reissued qualified private activity bonds
on the date of the action for certain
purposes, including §§ 55 through 57 of
the 1986 Code.
.04 Section 57(a)(5) of the 1986
Code provides that the interest on certain qualified private activity bonds is
treated as an item of tax preference for
purposes of the alternative minimum
tax.
.05 Corresponding provisions of the
Internal Revenue Code of 1954 set forth
requirements for the exclusion from
gross income of the interest on an issue
of state or local bonds. For purposes of
this revenue procedure, any reference to
a provision of the 1986 Code includes a
reference to the corresponding provision,
if any, under the 1954 Code.
SECTION 3. DESCRIPTION OF THE
CLOSING AGREEMENT PROGRAM
FOR SUBSEQUENT ACTIONS
.01 Under the program established by
this revenue procedure, the Service will
enter into closing agreements with issuers of state or local bonds. These closing agreements will provide that (1) the
interest on bonds will not be includible
in gross income of bondholders or (2)
the interest on bonds will not be treated
as an item of tax preference for purposes of the alternative minimum tax for
bondholders, in each case solely as a
result of an action subsequent to the
issue date that causes those bonds to fail
to meet certain requirements of §§ 141
through 150 of the 1986 Code relating
to use of bond proceeds. The closing
agreements will not resolve any other
matter.

.02 In general, in the case of a closing agreement providing that the interest
on bonds will not be includible in gross
income of bondholders, the closing
agreement will apply only to the period
between the issue date of the bonds and
the next date on which the bonds may
be redeemed under their terms after the
date of the closing agreement (the ‘‘next
redemption date’’). The next redemption
date will be specified in the closing
agreement.
.03 In general, in the case of a closing agreement providing that the interest
on bonds will not be treated as an item
of tax preference for purposes of the
alternative minimum tax, the closing
agreement will apply only to the period
between the date of the subsequent
action and the date specified in the
closing agreement.
.04 This program is a compliance
program but is not based upon an
examination of an issue of bonds by the
Service.
.05 Because this program does not
arise out of an examination, consideration under this program does not preclude or impede an examination of the
issuer, the bondholders, or the issue of
bonds by the Service with respect to
matters not addressed in the closing
agreement.
.06 The intent underlying this program is to treat expeditiously all requests for closing agreements which are
submitted in accordance with sections 5
and 6 of this revenue procedure. Accordingly, negotiations with issuers on
the basis of mitigating circumstances of
individual cases will not be entertained
under the terms of this revenue procedure.
SECTION 4. SCOPE
.01 This revenue procedure applies
only to failures to meet the requirements
for excludability of interest from gross
income in §§ 141 through 150 of the
1986 Code that can be remediated under
§§ 1.141–12, 1.142–2, 1.144–2, 1.145–
2, or 1.147–2 with respect to proceeds
that have been spent. These remedial
action provisions generally require that
the initial use of proceeds of the issue
of bonds, including the use of any
facility financed with those proceeds,
satisfied all the applicable requirements
for tax-exempt bonds under §§ 103 and
141 through 150 of the 1986 Code. The
requirements for excludability of interest
from gross income in §§ 141 through
150 of the 1986 Code that can be

22

remediated under §§ 1.141–12, 1.142–2,
1.144–2, 1.145–2, and 1.147–2 are
§§ 141(b)(1), 141(b)(3), 141(b)(4),
141(b)(5), 141(c), 142 (except paragraphs (d) and (f)), 144 (except paragraphs (a)(4), (a)(10), and (b)), 145(a),
147(c)(3), 147(d)(2) and (3), 147(e), and
147(f) of the 1986 Code. This revenue
procedure has no effect on the application of the provisions set forth in
§§ 150(b) and (c) of the 1986 Code.
.02 An issue of bonds that is under an
examination by the Service is not eligible for the program. An issue of bonds
is under examination if the issuer of the
bonds has been notified in writing by
the Service that the issue has been
selected for examination.
SECTION 5. PROCEDURE
.01 An issuer seeking relief must request, within 180 days from the date of
the subsequent action, a closing agreement following the procedures in this
revenue procedure.
.02 In its request for a closing agreement under this revenue procedure, the
issuer must include the following information relating to the issue of bonds:
(1) A copy of the completed and
filed Form 8038;
(2) A copy of the final offering
document, if any;
(3) A statement detailing the subsequent action;
(4) A statement explaining the
computation of the proposed closing
agreement amount, as described in section 6 of this revenue procedure; and
(5) In the case of a request for a
closing agreement providing that the
interest on bonds will not be includible
in gross income of bondholders, a copy
of the written notice (which may acknowledge that the issuer does not currently have funds on hand to redeem the
nonqualified bonds) to the bondholders
of the issue that:
(a) The nonqualified bonds will
be redeemed on the next redemption
date; and
(b) In the event the issuer fails
to redeem the nonqualified bonds in
accordance with the terms of the closing
agreement on the next redemption date,
the bonds of the issue will be treated as
private activity bonds that are not qualified bonds as of that date.
.03 The closing agreement will be
prepared by the Service and, in general,
will be in substantially the same form

which is shown as an exhibit at the end
of this revenue procedure.
.04 As a condition to the Service
executing a closing agreement under this
procedure, the following requirements
must be met:
(1) The requirements of §§ 1.141–
12(a), 1.142–2, 1.144–2, 1.145–2, or
1.147–2, as applicable, relating to conditions for remedial action must be satisfied.
(2) In the case of a closing agreement providing that the interest on
bonds will not be includible in gross
income of bondholders, the issuer must
agree to:
(a) Notify the bondholders in
writing, within 30 days after the date the
closing agreement is executed by the
Service, that:
(i) The nonqualified bonds
will be redeemed on the next redemption date; and
(ii) In the event the issuer
fails to redeem the nonqualified bonds
in accordance with the terms of the
closing agreement on the next redemption date, the bonds of the issue will be
treated as private activity bonds that are
not qualified bonds as of that date; and
(b) Not make any payment under the closing agreement from proceeds
of bonds described in § 103(a) of the
1986 Code.
(3) In the case of a closing agreement providing that the interest on
bonds will not be treated as an item of
tax preference for purposes of the alternative minimum tax, the issuer must
agree to not make any payment under
the closing agreement from proceeds of
bonds described in § 103(a) of the 1986
Code.
(4) In the case of a closing agreement providing that the interest on
bonds will not be includible in gross
income of bondholders, the issuer must
execute, simultaneously with the execution by the issuer of the closing agreement, a § 6103(c) disclosure consent
authorizing the Service to make public
any returns and return information (as
those terms are defined in § 6103(b) of
the 1986 Code) of the issuer relating to
the closing agreement under this revenue procedure, but only in the event
the issuer fails to redeem the nonqualified bonds in accordance with the terms
of the closing agreement.
(5) The issuer must pay, simultaneously with the execution by the issuer
of the closing agreement, the applicable
closing agreement amount computed under section 6 of this revenue procedure.

.05 A request for a closing agreement
and the closing agreement under this
revenue procedure must be signed by
the issuer. The person who signs for an
issuer must be an official of the issuer
who is authorized to sign a Form 8038
and who has personal knowledge of the
facts regarding bonds to be covered by
the closing agreement, the subsequent
action relating to the use of the proceeds
of those bonds, and the computation of
the proposed closing agreement amount
described in section 6 of this revenue
procedure.
.06 To sign the request for a closing
agreement or to appear before the Service in connection with the request for a
closing agreement, the issuer or the
representative must comply with the
requirements of sections 9.02(11) and
(12) of Rev. Proc. 97–4, 1997–1 I.R.B.
97 or any successor to Rev. Proc. 97–4.
.07 The following declaration must
accompany a request for a closing
agreement and any factual information
submitted after the original request or
any change in the request at a later
time: ‘‘Under penalties of perjury, I
declare that I have examined this
request for a closing agreement, including accompanying documents,
and that, to the best of my knowledge
and belief, the facts presented in support of the requested closing agreement are true, correct, and complete.’’
The declaration must be signed by the
issuer, not the issuer’s representative.
.08 A request for a closing agreement
must be clearly labeled as a request for
a closing agreement under this revenue
procedure and sent to the following
address:
Internal Revenue Service
1111 Constitution Avenue, N.W.
Attention: CP:E:EO:P:2, Room 6052
Washington, D.C. 20224
SECTION 6. CLOSING AGREEMENT
AMOUNT
.01 In general. Except as provided in
section 6.04 of this revenue procedure,
the closing agreement amount is equal
to an estimate of the federal income tax
liability that is not required to be paid
with respect to interest accruing on the
nonqualified bonds commencing on the
date of the subsequent action, as provided in this section. The closing agreement amount is computed as follows:
(1) Step 1. Determine the amount
of interest accruing on the nonqualified
bonds in each calendar year, commenc-

23

ing on the date on which the subsequent
action occurs and ending on the next
redemption date;
(2) Step 2. Multiply the amount
determined in section 6.01(1) of this
revenue procedure for each calendar
year by 0.29;
(3) Step 3. Determine the present
value of each amount determined in
section 6.01(2) of this revenue procedure for each calendar year in accordance with section 6.02 of this revenue
procedure by assuming it is paid on
April 15 in the following calendar year;
(4) Step 4. Determine the sum of
the present value amounts determined in
section 6.01(3) of this revenue procedure for all calendar years.
.02 Computation of present value.
Present value must be computed as of
the date on which the payment is sent to
the Service.
(1) In the case of a closing agreement providing that the interest on
bonds will not be includible in gross
income of bondholders, the discount rate
used to determine present value is the
taxable applicable federal rate (semiannual compounding), determined as of
the date of the subsequent action, for a
term equal to the period between the
date of the subsequent action and the
next redemption date.
(2) In the case of a closing agreement providing that the interest on
bonds will not be treated as an item of
tax preference for purposes of the alternative minimum tax, the discount rate
used to determine present value is the
taxable applicable federal rate (semiannual compounding), determined as of
the date of the subsequent action, for a
term equal to the period between the
date of the subsequent action and the
date specified in the closing agreement.
.03 Nonqualified bonds has the same
meaning as in §§ 1.141–12(j) or 1.142–
2(e), as applicable. Nonqualified bonds
that continue to be treated as tax-exempt
because of a permissible remedial action
under §§ 1.141–12(d), (e), or (f), 1.142–
2(c), 1.144–2, 1.145–2, or 1.147–2, as
applicable, will not be treated as
nonqualified bonds for purposes of this
closing agreement program.
.04 Amount for closing agreement on
item of tax preference. In the case of a
closing agreement providing that the
interest on bonds will not be treated as
an item of tax preference for purposes
of the alternative minimum tax, the
closing agreement amount is equal to an
estimate of the federal income tax liability that is not required to be paid

because of this treatment commencing
on the date of the subsequent action, as
provided in this section. The closing
agreement amount is computed as follows:
(1) Step 1. Determine the principal
amount of nonqualified bonds that will
be outstanding on January 1 of each
calendar year commencing the calendar
year in which the subsequent action
occurs and ending the first calendar year
in which the nonqualified bonds will no
longer be outstanding;
(2) Step 2. Multiply the amount
determined in section 6.04(1) of this
revenue procedure for each calendar
year by .0014;
(3) Step 3. Determine the present
value of each amount determined in
section 6.04(2) of this revenue procedure for each calendar year in accordance with section 6.02 of this revenue
procedure by assuming it is paid on
April 15 in the following calendar year;
(4) Step 4. Determine the sum of
the present value amounts determined in
section 6.04(3) of this revenue procedure for all calendar years.
SECTION 7. INQUIRIES
Inquiries, comments, or suggestions in
regard to this revenue procedure should
be directed to:
Internal Revenue Service
1111 Constitution Avenue, N.W.
Attention: CP:E:EO:P:2, Room 6052
Washington, D.C. 20224
SECTION 8. EFFECTIVE DATE
This revenue procedure is effective
for bonds issued on or after May 16,
1997. In addition, an issuer may apply
this revenue procedure to any bonds
issued before May 16, 1997.
SECTION 9. PAPERWORK
REDUCTION ACT
The collections of information contained in this revenue procedure have
been reviewed and approved by the
Office of Management and Budget in
accordance with the Paperwork Reduction Act (44 U.S.C. 3507) under control
number 1545–1528.
An agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information
unless the collection of information displays a valid control number.
The collections of information in this
revenue procedure are in section 5 of
this revenue procedure. This information

is required by the Service to verify
compliance with §§ 57, 103, 141, 142,
144, 145, and 147 of the 1986 Code, as
applicable. This information will be
used by the Service to enter into a
closing agreement with the issuer and to
establish the closing agreement amount.
The collections of information are required to obtain a benefit. The likely
respondents are state or local governments.
The estimated total annual reporting
and/or recordkeeping burden is 75
hours.
The estimated annual burden per
respondent/recordkeeper varies from 1
hour to 3 hours, depending on individual
circumstances, with an estimated average of 1.5 hours. The estimated number
of respondents and/or recordkeepers is
50.
The estimated annual frequency of
responses (used for reporting requirements only) is on occasion.
Books or records relating to a collection of information must be retained as
long as their contents may become material in the administration of any internal revenue law. Generally tax returns
and tax return information are confidential, as required by 26 U.S.C. 6103.
DRAFTING INFORMATION
The principal author of this revenue
procedure is Loretta J. Finger of the
Office of Assistant Chief Counsel (Financial Institutions and Products). For
further information regarding this revenue procedure contact Loretta J. Finger
on (202) 622–3980 (not a toll-free call).
CLOSING AGREEMENT ON FINAL
DETERMINATION COVERING
SPECIFIC MATTERS RELATING TO
A SUBSEQUENT ACTION RELATING
TO USE OF PROCEEDS
Under section 7121 of the Internal
Revenue Code (the ‘‘Code’’),
(the ‘‘Issuer’’) and the Commissioner of
Internal Revenue (the ‘‘Commissioner’’
or ‘‘IRS’’) make this closing agreement
(the ‘‘Agreement’’).
WHEREAS, the parties have determined the following facts and made the
following legal conclusions and representations:
A. This Agreement is in settlement of
issues raised in a request for a closing
agreement under Rev. Proc. 97–15,
1997–5 I.R.B. 21, pertaining to the
(the ‘‘Bonds’’) issued on
(the ‘‘Issue Date’’).

24

B. This Agreement is not based upon
an examination of the Bonds by the IRS
and does not preclude or impede an
examination of the Issuer, any holders
of the Bonds, or the Bonds by the IRS
with respect to matters not addressed in
this Agreement.
C. The IRS has not formally asserted
any claims against the Issuer, or sought
to tax any holders of the Bonds on
interest income on the Bonds.
D. The terms of this Agreement were
arrived at pursuant to Rev. Proc. 97–15
and may differ from the terms of settlement of bond issues examined or to be
examined by the IRS.
E. This Agreement is for the benefit
of the past, present and future registered
and beneficial owners of the Bonds
during the period covered by this Agreement (collectively, the ‘‘Bondholders’’).
F. [In the case of a closing agreement
entered into under section 3.01(1) of
Rev. Proc. 97–15, provide as follows:
The first date on which the Bonds may
be redeemed, under the terms of the
bond documents for the Bonds after the
date of this Agreement, is
(the ‘‘Next Redemption Date’’).]
[Insert additional premises on which
this Agreement is based, including a
description of the subsequent action
causing the Bonds to fail to meet a
requirement of the Code relating to use
of proceeds. Specifically identify that
requirement of the Code.]
NOW IT IS HEREBY DETERMINED
AND AGREED PURSUANT TO THIS
AGREEMENT EXECUTED BY THE
PARTIES HERETO UNDER SECTION
7121 OF THE CODE THAT FOR FEDERAL INCOME TAX PURPOSES:
1. The Issuer shall pay [the amount
computed under section 6 of Rev. Proc.
97–15] to the IRS upon the Issuer’s
execution of this Agreement. Payment of
this amount shall not be made from
proceeds of bonds described in section
103(a) of the Code. Payments of this
amount shall be made by certified check
payable to the ‘‘Internal Revenue Service.’’ Payment must be sent, simultaneously with this Agreement executed
by the Issuer, to Internal Revenue Service, Attention: CP:E:EO, 1111 Constitution Avenue, N.W., Washington, D.C.
20224.
2. [In the case of a closing agreement
entered into under section 3.01(1) of
Rev. Proc. 97–15, provide as follows:
The Bondholders are not required to
include in their gross incomes any interest accrued on the Bonds from the Issue
Date to the Next Redemption Date be-

cause of the violations set forth herein.]
[In the case of a closing agreement
entered into under section 3.01(2) of
Rev. Proc. 97–15, provide as follows:
The Bondholders are not required to
treat interest accrued on the Bonds from
[the date of the subsequent action] to [a
specified date] as an item of tax preference for purposes of the alternative
minimum tax, because of the violations
set forth herein.]
3. [In the case of a closing agreement
entered into under section 3.01(1) of
Rev. Proc. 97–15, provide as follows:
Within 30 days after the date this Agreement is executed by the IRS, the Issuer
must notify all Bondholders in writing
that the Bonds will be redeemed on the
Next Redemption Date and that, in the
event that the Issuer fails to redeem the
Bonds, the Bonds will be treated as
private activity bonds that are not qualified bonds after the Next Redemption
Date.]
4. [In the case of a closing agreement
entered into under section 3.01(1) of
Rev. Proc. 97–15, provide as follows:
The Issuer is required to redeem the
Bonds on the Next Redemption Date.
Further, the Issuer may not redeem the
Bonds from proceeds of bonds described
in section 103(a) of the Code.]
5. Notwithstanding anything to the
contrary contained herein, the IRS may
take any appropriate action with respect
to the Bonds, including taxing the Bondholders on interest earned on the Bonds,
for violations other than those set forth
herein or for violations arising after the
effective date of this Agreement.
6. This Agreement is executed with
respect to a federal income tax liability
of the Bondholders.
7. No income shall be recognized by
any Bondholder as a result of this
Agreement or any payments made pursuant to this Agreement.
8. No party shall endeavor by litigation or other means to attack the validity
of this Agreement.
9. This Agreement may not be cited
or relied upon by any person or entity
whatsoever as precedent in the disposition of any other case.
10. [In the case of a closing agreement entered into under section 3.01(1)
of Rev. Proc. 97–15, provide as follows:
The Issuer shall execute, upon the Issuer’s execution of this Agreement, a
consent meeting the requirements of
section 6103(c) of the Code permitting
the disclosure to the general public of
information concerning this Agreement.
The consent will permit such disclosures

only in the event the Issuer fails to
redeem the Bonds in accordance with
the terms of this Agreement.]
11. [In the case of a closing agreement entered into under section 3.01(1)
of Rev. Proc. 97–15, provide as follows:
In the event that the Bonds are retired
prior to the Next Redemption Date, no
amount paid by the Issuer under paragraph 1 of this Agreement may be
refunded.] [In the case of a closing
agreement entered into under section
3.01(2) of Rev. Proc. 97–15, provide as
follows: In the event that the Bonds are
retired prior to [the date specified in
paragraph 2 of this Agreement], no
amount paid by the Issuer under paragraph 1 of this Agreement may be
refunded.]
12. This Agreement is final and conclusive except that—
a. The matter it relates to may be
reopened in the event of fraud, malfeasance, or misrepresentation of a material
fact;
b. It is subject to the sections of
the Code that expressly provide that
effect be given to their provisions (including any stated exception for section
7122 of the Code) notwithstanding any
other law or rule of law; and
c. It is subject to any law, enacted
after the date of this Agreement, that
applies to a tax period ending after the
date of this Agreement covered by this
Agreement.
By signing, the above parties certify
that they have read and agreed to the
terms of this Agreement.
ISSUER
TIN:
By:
[Name]
Title:

Date:

COMMISSIONER OF INTERNAL
REVENUE
Date:
By:
[Name]
Title:
CONSENT TO DISCLOSE TAX
INFORMATION
I [we] hereby authorize the Internal
Revenue Service (‘‘IRS’’) to make public any returns and return information
(as those terms are defined in section
6103(b) of the Internal Revenue Code)
of [INSERT NAME OF ISSUER] (‘‘the
Issuer’’) relating to the Closing Agreement (‘‘Agreement’’) dated [INSERT
DATE] between the Issuer, [INSERT
NAME OF ANY OTHER PARTY

25

SIGNING THE AGREEMENT] and the
Commissioner of Internal Revenue, concerning [INSERT NAME OF BOND
ISSUE]. The above described information may be disclosed by the IRS to
members of Congress, the press, or the
general public. Such disclosures may be
made only in the event the Issuer fails
to redeem the Bonds in accordance with
the terms of the Agreement.
I [we] am [are] aware that without
this authorization the returns and return
information of [INSERT NAME OF
ISSUER] are confidential and are protected by law under the Internal Revenue Code.
I [we] hereby certify that I [we] have
the authority to execute this consent to
disclose on behalf of the Issuer.
NAME OF ISSUER:
EMPLOYER IDENTIFICATION
NUMBER:
ISSUER’S ADDRESS:
NAME OF INDIVIDUAL
EXECUTING CONSENT:
TITLE:
SIGNATURE:
DATE:
26 CFR 601.105: Examination of returns and
claims for refund, credit, or abatement; determination of correct tax liability.
(Also Part I, § 842.)

Rev. Proc. 97–16
SECTION 1. PURPOSE
This revenue procedure provides the
domestic asset/liability percentages and
domestic investment yields needed by
foreign life insurance companies and
foreign property and liability insurance
companies to compute their minimum
effectively connected net investment income under § 842(b) of the Internal
Revenue Code for taxable years beginning after December 31, 1995. Instructions are provided for computing foreign
insurance companies’ liabilities for the
estimated tax and installment payments
of estimated tax for taxable years beginning after December 31, 1995. For more
specific guidance regarding the computation of the amount of net investment
income to be included by a foreign
insurance company on its U.S. income
tax return, see Notice 89–96, 96, 1989–2
C.B. 417. For the domestic asset/liability
percentage and domestic investment
yield, as well as instructions for computing foreign insurance companies’ liabilities for estimated tax and installment
payments of estimated tax for taxable