[Code of Federal Regulations]
[Title 26, Volume 2]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.103(n)-2T]
[Page 394-401]
TITLE 26--INTERNAL REVENUE
CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
(CONTINUED)
PART 1--INCOME TAXES--Table of Contents
Sec. 1.103(n)-2T Private activity bond defined (temporary).
Q-1: What is the definition of the term ``private activity bond''?
A-1: In general, for purposes of Secs. 1.103(n)-1T through 1.103(n)-
6T, the term ``private activity bond'' means any industrial development
bond or student loan bond the interest on which is exempt from tax under
section 103(a) (without application of section 103(n)). See Sec. 1.103-
7(b) for the definition of the term ``industrial development bond.'' See
A-17 of this Sec. 1.103(n)-2T for the definition of the term ``student
loan bond.'' There are five exceptions to the general definition of the
term ``private activity bond''; the exceptions include the exception for
the Texas Veterans' Bond Program, the residential rental property
exception, the exception for certain facilities described in section
103(b)(4) (C) or (D), and the refunding obligation exception. These
exceptions are described in A-2 through A-16 of this Sec. 1.103(n)-2T.
In addition, the term ``private activity bond'' does not include any
issue of obligations if there was an inducement resolution (or other
comparable preliminary approval) for the project before June 19, 1984,
and the issue for that project is issued before January 1, 1985. See A-2
of Sec. 1.103(n)-1T.
Q-2: To which obligations does the exception for the Texas Veterans'
Bond Program apply?
A-2: The term ``private activity bond'' does not include general
obligation bonds issued under the Texas Veterans' Bond Program if the
proceeds of the issue, other than an amount that is not a major portion
of the proceeds, are used to make loans of up to $20,000 for the
purchase of land for purposes authorized by such program as in effect on
June 19, 1984. The use of the proceeds may be established by the
affidavit of the veteran receiving the loan. For purposes of this
exception to the definition of the term ``private activity bond,'' the
use of more than 25 percent of the proceeds of an issue of obligations
will constitute the use of a major portion of such proceeds.
Q-3: To which obligations does the residential rental property
exception apply?
[[Page 395]]
A-3: The term ``private activity bond'' does not include any
obligation issued to provide projects for residential rental property
(including property functionally related and subordinate to any such
facility), as described in section 103(b)(4)(A) and Sec. 1.103-8(b). In
addition, the term ``private activity bond'' does not include any
housing program obligation under section 11(b) of the United States
Housing Act of 1937.
Q-4: To which obligations does the exception for certain facilities
described in section 103(b)(4) (C) or (D) apply?
A-4: Section 103(n)(7)(C) provides that the term ``private activity
bond'' does not include any obligation issued as part of an issue to
provide convention or trade show facilities, as described in section
103(b)(4)(C) and Sec. 1.103-8(d) (including property functionally
related and subordinate to any such facilities), if the property so
described is owned by, or on behalf of, a governmental unit. In
addition, the term ``private activity bond'' does not include any
obligation issued as part of an issue to provide airports, docks,
wharfs, mass commuting facilities, or storage or training facilities
directly related to any of the foregoing facilities, as described in
section 103(b)(4)(D) and Sec. 1.103-8(e) (including property
functionally related and subordinate to any such facilities), if the
property so described is owned by, or on behalf of, a governmental unit.
See Sec. 1.103-8(a)(3), in general, for the definition of the term
``functionally related and subordinate.'' For purposes of this exception
to the definition of the term ``private activity bond,'' the term ``mass
commuting facilities'' includes ``qualified mass commuting vehicles,''
as defined in section 103(b)(9), that are associated with a mass
commuting facility described in Sec. 1.103-8(e)(2)(iv). Obligations
issued as part of an issue to provide parking facilities, as described
in section 103(b)(4)(D), are not excepted from the definition of the
term ``private activity bond;'' however, parking facilities may be
functionally related and subordinate to another facility described in
section 103(b)(4) (C) or (D).
Q-5: When is property described in section 103(b)(4) (C) or (D)
owned by, or on behalf of, a governmental unit?
A-5: In general, property described in section 103(b)(4) (C) or (D)
will be considered to be owned by a governmental unit if a governmental
unit is the owner of the property for Federal income tax purposes
generally. See A-5 of Sec. 1.103(n)-3T for the definition of the term
``governmental unit''. In general, property described in section
103(b)(4) (C) or (D) will be considered to be owned on behalf of a
governmental unit if a constituted authority empowered to issue
obligations on behalf of a governmental unit is the owner of the
property for Federal income tax purposes generally. Whether the property
is owned by, or on behalf of, a governmental unit will be determined on
the basis of the facts and circumstances of each particular case. The
fact that the governmental unit's or constituted authority's obligation
to pay principal and interest on an obligation is limited to revenues
from fees collected from users of the property provided with the
proceeds of such obligation will not, in itself, cause such property to
be treated as not owned by, or on behalf of, the governmental unit. In
order to qualify for the exception described in section 103(n)(7)(C),
the property must be owned by, or on behalf of, the governmental unit
throughout the term of the issue. See A-10 of this Sec. 1.103(n)-2T with
respect to the consequences of a transfer of ownership.
Q-6: Will property described in section 103(b)(4) (C) or (D) that is
leased to a non-governmental entity be treated as owned by, or on behalf
of, a governmental unit if the lessee is the owner of the property for
Federal income tax purposes generally solely by reason of the length of
the lease?
A-6: If property, or any portion thereof, is leased to a non-
governmental entity and if, for Federal income tax purposes generally,
the lessee is the owner of the property solely by reason of the length
of the lease, then, for purposes of Secs. 1.103(n)-1T through 1.103(n)-
6T (but not for other Federal income tax purposes, such as whether
payments under the lease constitute deductible rental payments), the
governmental unit will be treated as the owner of the property if the
lessee elects not to claim depreciation or an investment credit with
respect to such
[[Page 396]]
property. See A-7 of this Sec. 1.103(n)-2T for the rules describing the
method of making this election. For purposes of Secs. 1.103(n)-1T
through 1.103(n)-6T, the term ``non-governmental entity'' means a person
other than a governmental unit or a constituted authority empowered to
issue obligations on behalf of a governmental unit. The fact that a non-
governmental entity lessee elects not to claim depreciation or an
investment credit with respect to property does not, however, ensure
that the property will be treated as owned by, or on behalf of a
governmental unit for purposes of Secs. 1.103(n)-1T through 1.103(n)-6T.
Thus, for example, if the lessee is the owner of the property for
Federal income tax purposes generally other than solely because of the
length of the lease, the obligations issued as part of the issue are
private activity bonds notwithstanding that the lessee elected not to
claim depreciation or an investment credit with respect to the property.
Similarly, even if a governmental unit is the owner of property for
Federal income tax purposes generally, the property will not be treated
as owned by, or on behalf of, a governmental unit for purposes of
Secs. 1.103(n)-1T through 1.103(n)-6T if the lease under which such
property is leased to a non-governmental entity provides for significant
front end loading of rental accruals or payments. See A-12 of this
Sec. 1.103(n)-2T with respect to significant front end loading of rental
accruals or payments.
Q-7: What must a lessee do in order to elect not to take
depreciation or an investment credit with respect to property described
in section 103(b)(4) (C) or (D)?
A-7: The lessee must make the election at the time the lease is
executed. The election must include a description of the property with
respect to which the election is being made; the name, address, and TIN
of the issuing authority; the name, address, and TIN of the lessee; and
the date and face amount of the issue the proceeds of which are to be
used to provide the property. The election must be signed by the lessee,
if a natural person, or by a duly authorized official of the lessee. The
issuing authority must be provided with a copy of the election. The
issuing authority and the lessee must retain copies of the election in
their respective records for the entire term of the lease. In addition,
the lease, and any publicly recorded document recorded in lieu of such
lease, must state that neither the lessee nor any successor in interest
under the lease may claim depreciation or an investment credit with
respect to such property. This election may be made with respect to
property whether or not such property otherwise would be eligible for
depreciation or an investment tax credit. See section 7701(a)(41) for
the definition of the term ``TIN''.
Q-8: Is the election not to claim depreciation or an investment
credit revocable?
A-8: No, the election is irrevocable. In addition, the election is
binding on all successors in interest under the lease regardless of
whether the obligations remain outstanding. If a successor in interest
claims depreciation or an investment credit with respect to property for
which such an election has been made, such property will be considered
transferred to a non-governmental entity. See A-10 of this
Sec. 1.103(n)-2T with respect to the consequences of such a transfer.
Q-9: Where obligations are issued to provide all or any portion of a
facility described in section 103(b)(4) (C) or (D), must all of the
property described in section 103(b)(4) (C) or (D) that is part of such
facility be owned by, or on behalf of, a governmental unit in order for
such obligations to qualify for the exception to the definition of the
term ``private activity bond'' provided in section 103(n)(7)(C)?
A-9: Generally, yes. If obligations are issued to provide all or any
portion of a facility described in section 103(b)(4) (C) or (D), the
obligations comprising such issue will not qualify for the exception to
the definition of the term ``private activity bond'' provided in section
103(n)(7)(C) unless all of the property described in section 103(b)(4)
(C) or (D) that is part of (or functionally related and subordinate to)
the facility being financed is owned by, or on behalf of, a governmental
unit throughout the term of the issue. For
[[Page 397]]
this purpose, the facility being financed will be construed to include
the entire airport, dock, etc., under consideration and not merely the
part of the facility being provided with the proceeds of the issue. For
example, the term facility, when used in reference to an airport, will
be considered to include all property that is part of, or included in,
that airport under Sec. 1.103-8(e)(2)(ii)(a), including all property
functionally related and subordinate thereto under Sec. 1.103--8 (a)(3)
and (e)(2)(ii)(b ). Thus, if the proceeds of an issue are used to
provide a hangar at an airport described in section 103(b)(4)(D), that
airport is considered as being financed with such issue, and if any
portion of that airport, including property functionally related and
subordinate thereto, is treated as owned by a non-governmental entity,
that issue does not qualify for the exception of the definition of the
term ``private activity bond'' provided in section 103(n)(7)(C).
There are three exceptions to this rule, however. First, if any
property otherwise would be considered part of the facility financed and
such property was not provided with proceeds of any obligation described
in section 103(a), such property will not be considered part of the
facility being financed.
Second, if any property otherwise would be considered part of the
facility being financed and such property was part of such facility on
or before October 5, 1984, such property will not be considered part of
the facility being financed. For this purpose, property will be
considered part of the facility on or before October 5, 1984, if any
person was under a binding contract to acquire or construct such
property to be a part of such facility on October 5, 1984.
Third, property will not be considered part of the facility being
financed if such property (i) is land, a building, a structural
component of a building, or other structure (other than tangible
personal property (other than an air conditioning or heating unit)) and
such property is not physically supported by, does not physically
support, and is not physically connected to any property provided with
the proceeds of obligations that qualify for the exception to the
definition of the term ``private activity bond'' provided in section
103(n)(7)(C), or (ii) is tangible personal property (other than an air
conditioning or heating unit). For this purpose, contiguous parcels of
land will not be considered to support, to be supported by, or to be
physically connected to each other, and insignificant physical
connections (such as a connection by a sidewalk) will be disregarded.
For purposes of this A-9, the term ``tangible personal property'' shall
have the meaning given to it under section 48(a)(1)(A) and Sec. 1.48-
1(c). Examples. The following examples illustrate the provisions of A-9
of this Sec. 1.103(n)-2T:
Example (1). On January 1, 1986, Governmental Unit M issues
industrial development bonds to provide an airport, as described in
section 103(b)(4)(D), which will consist of land, runways, a terminal
and a functionally related and subordinate hotel. The hotel will be
leased to N, a non-governmental entity. The lease does not call for
significant front end loading of rental accruals or payments. For
Federal income tax purposes generally, M will own the entire airport
except that N will be the owner of the hotel solely by reason of the
length of the lease. N properly elects not to claim depreciation of an
investment credit with respect to the hotel. The industrial development
bonds are not private activity bonds.
Example (2). The facts are the same as in Example (1) except that N
does not make the election and claims depreciation with respect to the
hotel. The entire issue of industrial development bonds is treated as an
issue of private activity bonds.
Example (3). The facts are the same as in Example (2) except that
the hotel is provided other than with the proceeds of an obligation
described in section 103(a). The issue for the remainder of the airport
qualifies for the exception to the definition of the term ``private
activity bond'' provided in section 103(n)(7)(C).
Example (4). The facts are the same as in Example (2) except that
the hotel, including the hotel parking lot, the hotel grounds, and the
parcel of land on which they rest, are provided with a separate issue of
industrial development bonds. There are no significant connections
between the hotel and the airport. The issue for the hotel is an issue
of private activity bonds. The issue for the remainder of the airport
qualifies for the exception to the definition of the term ``private
activity bonds'' provided in section 103(n)(7)(C).
[[Page 398]]
Example (5). The facts are the same as Example (4) except that the
hotel is constructed upon land provided with the proceeds of the issue
used to provide the remainder of the airport. Both issues are treated as
issues of private activity bonds.
Example (6). On June 30, 1983, construction began on the City NN
airport, which consists of land, runways, a terminal, and hangars.
Corporation XX (a non-governmental entity) owns for Federal income tax
purposes generally several of the hangars, which it financed with
obligations described in section 103(a) issued on June 30, 1983. On
March 1, 1985, at a time when XX still owns the hangars, City NN issues
an issue of obligations described in section 103(b)(4)(D) to enlarge the
terminal at the City NN airport. City NN will own the addition to the
terminal for Federal income tax purposes generally. The obligations
comprising the March 1, 1985, issue will not be private activity bonds.
Q-10: What are the consequences if a governmental unit ceases to be
treated as owning property described in section 103(b)(4) (C) or (D)
where the property was provided by obligations that were not private
activity bonds on the date of issue due to the exception provided in
section 103(n)(7)(C)?
A-10: The obligations outstanding on the date such ownership ceases
are private activity bonds and are treated as if they are the last
private activity bonds issued by the issuer in the calendar year in
which the transfer of ownership occurs. Thus, if the aggregate amount of
bonds issued pursuant to such issue, when added to the aggregate amount
of the other private activity bonds actually issued or treated as issued
under this A-10 by the issuer during such year and the amount of any
carryforward elections made during the year, exceeds the issuer's
private activity bond limit for such year, the obligations are not
described in section 103(a) as of the date on which transfer of
ownership occurs; if such obligations do not comply with the
requirements of section 103(n), the obligations will be treated as not
described in section 103(a) as of the date such ownership ceases.
However, if on the date of issue the issuer intended to transfer
ownership of such property to a non-governmental entity during the term
of the issue, then the obligations are treated as the last private
activity bonds actually issued or treated as issued under this A-10 by
the issuer during the year in which such obligations were actually
issued; if such obligations do not comply with the requirements of
section 103(n), the obligations will be treated as not described in
section 103(a) as of the date of issue. The exception to the definition
of the term ``private activity bond'' for facilities described in
section 103(b)(4) (C) and (D) only applies if the property is owned by,
or on behalf of, a governmental unit while all or any part of the issue
or any refunding issue remains outstanding.
If all or a portion of the property is sold to a non-governmental
entity for its fair market value and all of the proceeds from the sale
(except for a de minimis amount less than $5,000) are used within six
months to redeem outstanding obligations, the obligations will not be
treated as private entity bonds.
Q-11: What are the consequences if private activity bonds are issued
to provide additions to a facility that was provided with obligations
that were not private activity bonds when issued by virtue of the
exception provided in section 103(n)(7)(C) and such additions are not
treated as owned by a governmental unit?
A-11: In order to qualify for the exception to the definition of the
term ``private activity bond'' for obligations described in section
103(b)(4) (C) or (D), all of the property described in section 103(b)(4)
(C) or (D) that is part of the facility provided with the proceeds
generally must be owned by, or on behalf of, a governmental unit. See A-
9 of this Sec. 1.103 (n)-2T. However, if the proceeds of an issue of
private activity bonds are used to make additions to a facility (other
than additions that are not considered to be part of the facility under
A-9 of this Sec. 1.103(n)-2T) that was provided with another issue of
industrial development bonds that were not private activity bonds when
issued by virtue of the exception provided in section 103(n)(7)(C), then
the prior issue will not cease to qualify for that exception.
Nevertheless, for purposes of determining the aggregate amount of
private activity bonds issued during the year that the issue to provide
the addition to the previously financed facility is issued, the portion
of the prior issue
[[Page 399]]
outstanding on the date of issue of the issue to provide the addition
will be treated as part of the issue to provide the addition.
Example. The following example illustrates the provisions of A-11 of
this Sec. 1.103 (n)-2T:
Example. On March 1, 1986, City P issues a $100 million issue of
industrial development bonds to provide an airport, as described in
section 103(b)(4)(D). City P uses substantially all of the proceeds to
acquire land and to construct runways and a terminal on that land. No
other property is constructed on the land. City P is the owner of the
land and the terminal for Federal income tax purposes generally. Thus,
the obligations comprising the March 1, 1986, issue are not private
activity bonds when issued. On September 1, 1988, City P leases a
portion of the land adjacent to the terminal to Corporation V (a non-
governmental entity) under a true lease for Federal income tax purposes.
City P's private activity bond limit for 1988 is $100 million, and as of
September 30, 1988, City P has not issued any private activity bond
during 1988. On September 30, 1988, City P issues a $20 million issue of
industrial development bonds, the proceeds of which are to be used to
construct a hotel that is functionally related and subordinate to the
airport. The hotel is to be constructed on the land that P leased to
Corporation V. The hotel will be owned by Corporation V for Federal
income tax purposes generally. On September 30, 1988, the outstanding
face amount of the March 1, 1986, issue is $100 million. Although the
obligations comprising the March 1, 1986, issue will not become private
activity bonds as a result of the subsequent issue, on September 30,
1988, City P is treated as issuing a $120 million issue of private
activity bonds. Since that amount exceeds City P's private activity bond
limit, the $20 million issue of private activity bonds issued on
September 30, 1988, does not meet the requirements of section 103(n). In
addition, any subsequent issuance of private activity bonds by City P
during 1988 will fail to meet the requirements of section 103(n). The
March 1, 1986, issue continues to be described in section 103(a).
Q-12: Section 103(n)(7)(C)(iv) provides that the exception for
certain facilities described in section 103(b)(4) (C) or (D) shall not
apply in any case where the facility is leased under a lease that has
significant front end loading of rental accruals or payments. What does
``significant front end loading of rental accruals or payments'' mean?
A-12: Where a lease requires rental payments that are significantly
higher in the early years of the lease than in later years, the lease
calls for significant front end loading of rental accruals or payments.
A lease that provides for flat rental payments during the entire lease
term does not violate the prohibition against significant front end
loading of rent. In addition, a lease may provide for adjustments in
rent for inflation or deflation, provided that such adjustments are to
be made on the basis of a generally recognized price index. In addition,
a lease may provide that rental payments are to be determined, in whole
or part, based on a percentage of income, production, etc., provided
that the percentage rate is kept constant (or increases) over the term
of the lease and that the threshold, if any, above which the percentage
applies is kept constant (or decreases) over the term of the lease.
Thus, for example, a lease that requires rental payments throughout the
term of the lease of $100,000 per year plus 5 percent of the gross
income from the facility in excess of $500,000 does not violate the
prohibition against significant front end loading of rent.
Examples. The following examples illustrate the provisions of A-4
through A-12 of this Sec. 1.103(n)-2T:
Example (1). On February 1, 1985, County Z issues obligations with a
term of 30 years. Substantially all of the proceeds of the obligations
are to be used to provide a trade show facility as described in section
103(b)(4)(C). Z leases the entire facility to Corporation S. For Federal
income tax purposes generally, S is treated as the owner of the facility
solely by reason of the length of the lease. The lease provides that the
lessee will elect not to claim depreciation or an investment credit with
respect to the facility and that S will provide Z with a copy of the
election. S makes the election, retains it in its records, and provides
County Z with a copy. The lease provides that neither the lessee nor any
successor in interest will claim a deduction for depreciation or an
investment credit with respect to such facility. The obligations are not
private activity bonds on the date of issue, provided that the lease
does not call for significant front end loading of rental accruals or
payments.
Example (2). The facts are the same as in Example (1) except that on
February 1, 1986, S assigns the lease to Corporation T. For its taxable
year ending March 31, 1986, Corporation T claims depreciation with
respect to the trade show facility. The obligations outstanding on the
date Corporation T claims
[[Page 400]]
depreciation on its Federal income tax return are treated as the last
private activity bonds actually issued or treated as issued by County Z
during 1986, and such obligations must comply with the requirements of
section 103(n). In addition, Corporation T is not entitled to claim
depreciation or an investment credit with respect to the trade show
facility during the balance of the term of the lease and will be subject
to the applicable penalties for so claiming depreciation.
Example (3). The facts are the same as in Example (1) except that
the obligations are redeemed on January 31, 1998; on January 31, 1999, S
assigns the lease to Corporation X; and on its Federal income tax return
for calendar year 1999, Corporation X claims depreciation with respect
to the facility. The obligations are not private activity bonds provided
that the lease does not call for significant front end loading of rental
accruals or payments. However, X is not entitled to claim depreciation
or an investment credit with respect to the trade show facility during
the balance of the term of the lease and will be subject to the
applicable penalties for so claiming those items.
Q-13: To which obligations does the refunding obligation exception
apply?
A-13: The term ``private activity bond'' does not include any
refunding obligation to the extent specified in this A-13. The term
``refunding obligation'' means an obligation that is part of an issue of
obligations the proceeds of which are used to pay any principal or
interest on any other issue of obligations described in section 103(a)
(referred to as the prior issue). The term ``refunding obligation'' does
not include any obligations issued more than 180 days before the prior
issue is discharged (``advance refundings''). The exception for
refunding obligations only applies to the extent that the aggregate
amount of the refunding issue does not exceed the outstanding face
amount of the prior issue, or portion thereof, being refunded. Thus, for
example, in the case of an obligation part of the proceeds of which are
to be used to refund a prior issue of private activity bonds and part of
the proceeds of which are to be used to provide a pollution control
facility under section 103(b)(4)(F), those proceeds to be used to refund
all or any part of the principal amount of the prior issue are not the
proceeds of a private activity bond; the balance of the proceeds are the
proceeds of a private activity bond. The refunding obligation exception
does not apply to obligations to the extent that amounts are used to pay
the costs of issuing refunding obligations. If an issue of obligations
consists of both obligations that qualify for the refunding obligation
exception and private activity bonds that do not meet the requirements
of section 103(n), the entire issue is treated as consisting of
obligations not described in section 103(a).
Q-14: Does the refunding obligation exception apply to obligations
issued to refund a prior issue of student loan bonds?
A-14: In the case of any student loan bond, the refunding obligation
exception applies only if, in addition to the requirements stated in A-
13 of this Sec. 1.103(n)-2T, the maturity date of the funding obligation
is not later than the later of (i) the maturity date of the obligation
to be refunded, or (ii) the date 17 years after the date on which the
refunded obligation was issued (or, in the case of a series of
refundings, the date on which the original obligation was issued).
Q-15: What is the ``maturity date'' of an obligation?
A-15: For purposes of section 103(n), the ``maturity date'' of an
obligation is the date on which interest ceases to accrue and the
obligation may either be paid or redeemed without penalty. The date is
determined without regard to optional redemption dates (including those
at the option of holders). If the issuer is required by the obligations
or the indenture to redeem portions of obligations or to make payments
of principal with respect to obligations in specified amounts and at
specified times, such mandatory redemptions or payments shall be treated
as separate obligations.
Q-16: Where private activity bonds are refunded with other
obligations described in section 103(a), does the refunding obligation
exception apply to the extent that the aggregate amount of the refunding
obligations exceeds the outstanding principal amount of the prior issue
due to the use of a portion of the proceeds of the refunding issue to
fund a reasonably required reserve or replacement fund?
A-16: Whether the prior issue was issued prior to January 1, 1984,
or
[[Page 401]]
thereafter, the refunding obligation exception to the definition of the
term ``private activity bond'' only applies to the extent that the
aggregate amount of the refunding obligation does not exceed the
outstanding principal amount of the prior issue. Thus, the additional
obligations issued to provide for a reasonably required reserve or
replacement fund are private activity bonds.
Q-17: What is a ``student loan bond''?
A-17: The term ``student loan bond'' means an obligation that is
issued as part of an issue all or a major portion of the proceeds of
which are to be used directly or indirectly to finance loans to
individuals for educational expenses. For purposes of this A-17, the use
of more than 25 percent of the proceeds of an issue of obligations to
finance loans to individuals for educational expenses will constitute
the use of a major portion of such proceeds in such manner.
(Secs. 103(n) and 7805 of the Internal Revenue Code of 1954 (98 Stat.
916, 26 U.S.C.103(n); 68A Stat. 917, 26 U.S.C. 7805))
[T.D. 7981, 49 FR 39316, Oct. 5, 1984]