Amounts expended by a civilian faculty member of a
military school for the purchase and maintenance of
uniforms which he is required to wear while on duty,
and which are not suitable for ordinary wear, are de-
ductible as business expenses if he itemizes his de-
ductions.

Generally the holding period of a surviving spouse's
share of community property dates from the date of
acquisition by the community; the holding period of
property which is a deceased spouse's share of the
community property, inherited by the surviving
spouse, dates from the date of the decedent's death.

Rev. Rul. 59-219, page 11.

Rev. Rul. 59-220, page 14.

Regulations relating to taxes and carrying charges T. D. 6320,
chargeable to capital account have been amended to
restore the election to capitalize Federal social security

taxes.

page 12.

Auto or truck lease payments are deductible only if they Announcement
represent ordinary and necessary expenses of, and are
directly attributable to, the operation of a trade or

business.

SELF-EMPLOYMENT TAX:

59-58, page 28.

page 16.

Undistributed corporate income taxable to shareholders Rev. Rul. 59-221,
under section 1373 of the Code is not includible in
computing the shareholders' net earnings from self-
employment.

ALCOHOL TAX:

The Revenue Service outlines the procedure to be fol-
lowed by (1) users of specially denatured spirits, (2)
dealers in specially denatured spirits, and (3) users
of tax-free spirits, in order that they may qualify for
use and procurement of the spirits on and after July
1, 1959.

(Continued on page 3)

Rev. Proc. 59–17,
Rev. Proc. 59-18,
Rev. Proc. 59-19,
pages 21, 23, 24.

TREASURY DEPARTMENT · INTERNAL REVENUE SERVICE

506745°-59-1

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 confidential personal and business information. All Revenue Rulings published in the Bulletin have not necessarily received the consideration 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)

DEPOSITED BY THE

UNITED STATES OF AMERICA

3

HIGHLIGHTS OF THIS ISSUE-(Continued from page 1)

ALCOHOL TAX-Continued

page 26.

The Revenue Service outlines what must be done by Rev. Proc. 59-20,
distillers, warehousemen, denaturers, rectifiers, and
bottlers of distilled spirits in order that they may
qualify as distilled spirits plants by July 1, 1959.
Proposed amendment of the regulations would provide
relief in respect of taxes paid or determined and
customs duties paid on distilled spirits, wines, recti-
fied products and beer lost in a disaster occurring
after June 30, 1959.

Proposed regulations would require returns and records
of the disposition of containers of the character used
in packaging distilled spirits.
Proposed amendment of the regulations would imple-
ment the provisions of the Excise Tax Technical
Changes Act of 1958 with respect to the production
of vinegar by the vaporizing process.
Amendments to the wine regulations have been pro-
posed to implement the provisions of the Excise Tax
Technical Changes Act of 1958 and permit the use
of liquid sugar and invert sugar syrup in the pro-
duction of wine.

Regulations have been proposed with respect to spirits,
denatured spirits, and products manufactured from
denatured spirits for tax-free shipment to the United
States from Puerto Rico and the Virgin Islands.
Proposed amendment of the regulations relates to the
drawback of tax paid or determined on distilled spirits,
wines, and beer exported or used as supplies on cer-
tain vessels or aircraft.

ADMINISTRATIVE:

Announcement,

page 7.

Announcement,

page 7. Announcement,

page 7.

Announcement,

page 7.

Announcement, page 7.

Announcement,

page 7.

page 19.

Authority has been delegated by the Commissioner to Del. Order No. 72, each Assistant Regional Commissioner, Alcohol and Tobacco Tax, to make refunds of internal revenue tax collected by collectors of customs in those cases to which section 6423 of the 1954 Code is applicable. The Commissioner of Internal Revenue has been delegated authority to grant permission to inspect certain tax returns to any agency of the Executive Branch of the United States Government.

(Continued on page 5)

Treas. Dept. Order 150-35 (Rev. 1) page 19.

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.

HIGHLIGHTS OF THIS ISSUE—Continued from page 3

ADMINISTRATIVE-Continued

Unenrolled preparers of returns are required to file a
signed fee statement in the form set forth in Revenue
Procedure 59-3; however, enrolled attorneys and
agents are not required to file fee statements.
The Revenue Service clarifies the policy on the reopen-
ing of Federal tax cases closed by agreement in either
the Audit or Appellate Divisions.
The 4 percent Treasury Certificates of Indebtedness of
Series B-1960, announced in Treasury Department
Circular No. 1025, will not be acceptable in payment
of taxes.

The Revenue Service announces a change in publica-
tion procedures designed to improve its service to
readers of the Internal Revenue Bulletin.
Approximately 2,500 applications have been received
from public accountants and other qualified persons
to take the written examination for special enrollment
to practice as agent before the Internal Revenue
Service.

Announcement of action on decisions of the Tax Court of Page 9. the United States.