Revenue Ruling 2004-94
Rev. Rul. 2004-94
Rev. Rul. 2004-94, 2004-38 I.R.B. 491
                      Internal Revenue Service (I.R.S.)
                                Revenue Ruling
                    DEALERS IN SECURITIES FUTURES CONTRACTS
                         Published: September 20, 2004
 Section 1256.–Section 1256 Contracts Marked to Market
 Dealers in securities futures contracts. This ruling holds that Tier 1, Tier 2, and Tier 3 NQLX LLC Market Makers that satisfy the market maker requirements described in the ruling perform functions similar to the functions performed by options dealers (as defined in section 1256(g)(8)(A) of the Code) and that these NQLX LLC Market Makers are therefore dealers in securities futures contracts within the meaning of section 1256(g)(9)(B).
 Dealers in securities futures contracts. This ruling holds that Tier 1, Tier 2, and Tier 3 NQLX LLC Market Makers that satisfy the market maker requirements described in the ruling perform functions similar to the functions performed by options dealers (as defined in section 1256(g)(8)(A) of the Code) and that these NQLX LLC Market Makers are therefore dealers in securities futures contracts within the meaning of section 1256(g)(9)(B).
ISSUE
 If a Tier 1, Tier 2, or Tier 3 NQLX LLC (NQLX) Market Maker satisfies the requirements described below, is it a dealer in securities futures contracts (SFCs) within the meaning of s 1256(g)(9)(B) of the Internal Revenue Code?
FACTS
 NQLX has been designated by the Commodity Futures Trading Commission (CFTC) as a contract market that is permitted to list SFCs. As such, NQLX is a “qualified board or exchange” within the meaning of s 1256(g)(7). NQLX has a market maker program under which NQLX members may qualify as NQLX Market Makers. NQLX Market Makers are obligated to provide liquidity for their specifically assigned SFC products that trade on NQLX. For this purpose, an SFC product consists of contracts that may have varying maturities but that all relate to a particular underlying security or a particular narrow-based index of securities. NQLX Market Makers fall into one of three classes: Tier 1, Tier 2, and Tier 3. Tier 1 Market Makers are assigned at least 50, if not all, SFC products listed on NQLX. Tier 2 Market Makers are assigned 25 to 49 SFC products listed on NQLX. Tier 3 Market Makers are assigned fewer than 25 SFC products listed on NQLX. In each case, the SFC products assigned to a Market Maker in the aggregate must account for at least 20% of the total volume in all SFCs traded on NQLX for the preceding calendar quarter.
 An NQLX Market Maker must meet all of the following requirements:
 (1) Be a member of NQLX;
 (2) Be registered as a floor trader or floor broker with the CFTC or as a dealer with the Securities Exchange Commission (SEC);
 (3) Maintain records sufficient to prove compliance with the NQLX Market Maker requirements, including, but not limited to, documents concerning personnel effecting relevant orders, relevant trade and cash blotters, relevant stock records, and documents concerning applicable internal system capacity and performance; and
 (4) Hold itself out as willing to buy and sell SFCs for its own account on a regular or continuous basis.
 For an NQLX Market Maker to fulfill the regular or continuous requirement in paragraph (4) above, it must satisfy the following criteria for each of its assigned SFC products:
 (i) Provide continuous two-sided quotations for the first two delivery months of each assigned SFC product throughout the trading day, except during unusual market conditions as determined by NQLX (such as a fast market in either the SFC product or the security underlying the SFC product) at which times the Market Maker must use its best efforts to quote continuously and competitively;
 (ii) Quote for the first two delivery months, with (A) a Maximum Bid/Ask Spread of no more than the greater of $0.10 or 150% of the bid/ask spread in the primary market for the security underlying the SFC product and (B) a Minimum Number of Contacts of no less than the lesser of 10 contracts or the corresponding contract size equivalent of the best bid and best offer for the security underlying the SFC product; and
 (iii) Respond to requests for quotation in each assigned SFC product within 5 seconds for all delivery months other than the first two delivery months with a two-sided quotation that has (A) a Maximum Bid/Ask Spread of no more than the greater of $0.20 or 150% of the bid/ask spread in the primary market for the security underlying the SFC product and (B) a Minimum Number of Contracts of no less than the lesser of 5 contracts or the corresponding contract size equivalent of the best bid and best offer for the security underlying the SFC product.
 Any NQLX Market Maker that fails to comply with the NQLX rules, CFTC rules, or SEC rules, as applicable, is subject to disciplinary action in accordance with NQLX rules.
LAW
 Section 1256(g)(8)(A) defines the term “options dealer” to mean any person registered with an appropriate national securities exchange as a market maker or specialist in listed options. Section 1256(g)(9)(B) provides that a person shall be treated as a dealer in SFCs or options on such contracts if the Secretary determines that such person performs, with respect to such contracts or options, as the case may be, functions similar to the functions performed by an options dealer. Section 1256(g)(9)(B) further provides that such determination shall be made to the extent appropriate to carry out the purposes of that section.
 The legislative history for s 1256(g)(9) states the following with respect to the determination process:
   The determination of who is a dealer in securities futures contracts is to be made in a manner that is appropriate to carry out the purposes of the provision, which generally is to provide comparable tax treatment between dealers in securities futures contracts, on the one hand, and dealers in equity options, on the other. Although traders in securities futures contracts (and options on such contracts) may not have the same market-making obligations as market makers or specialists in equity options, many
traders are expected to perform analogous functions to such market makers or specialists by providing market liquidity for securities futures contracts (and options) even in the absence of a legal obligation to do so. Accordingly, the absence of market-making obligations is not inconsistent with a determination that a class of traders are dealers in securities futures contracts (and options), if the relevant factors, including providing market liquidity for such contracts (and options), indicate that the market functions of the traders is comparable to that of equity options dealers.
H.R. Conf. Rep. No. 106-1033, at 1036 (2000).
HOLDING
 It is determined that Tier 1, Tier 2, and Tier 3 NQLX Market Makers that satisfy the requirements described above perform functions similar to the functions performed by options dealers (as defined in s 1256(g)(8)(A)) and that these NQLX Market Makers are therefore dealers in SFCs within the meaning of s 1256(g)(9)(B). This determination will cease to apply in the event of material changes in the NQLX Market Maker program affecting the Tier 1, Tier 2, or Tier 3 Market Makers described above. See s 601.601(d)(2)(v) of the Income Tax Regulations.
EFFECTIVE DATE
 The effective date of this ruling is the date of publication in the Internal Revenue Bulletin. Because this ruling is prospective only, the holding applies to SFCs that are entered into by a dealer in SFCs on or after the effective date of this ruling.
DRAFTING INFORMATION
 The principal author of this revenue ruling is K. Scott Brown of the Office of Associate Chief Counsel (Financial Institutions & Products). For further information regarding this revenue ruling, contact K. Scott Brown at (202) 622- 3920 (not a toll-free call).
 Rev. Rul. 2004-94, 2004-38 I.R.B. 491
Revenue Ruling 2004-95
Rev. Rul. 2004-95
Rev. Rul. 2004-95, 2004-38 I.R.B. 492
                      Internal Revenue Service (I.R.S.)
                                Revenue Ruling
                    DEALERS IN SECURITIES FUTURES CONTRACTS
                         Published: September 20, 2004
  Dealers in securities futures contracts. This ruling holds that Category 1 and Category 2 OneChicago LLC Market Makers that satisfy the Market Maker requirements described in the ruling and satisfy the section 1256 Dealer Qualification quotation requirements described in the ruling perform functions similar to the functions performed by options dealers (as defined in section 1256(g)(8)(A) of the Code) and that these OneChicago LLC Market Makers are therefore dealers in securities futures contracts within the meaning of section 1256(g)(9)(B).
 Dealers in securities futures contracts. This ruling holds that Category 1 and Category 2 OneChicago LLC Market Makers that satisfy the Market Maker requirements described in the ruling and satisfy the section 1256 Dealer Qualification quotation requirements described in the ruling perform functions similar to the functions performed by options dealers (as defined in section 1256(g)(8)(A) of the Code) and that these OneChicago LLC Market Makers are therefore dealers in securities futures contracts within the meaning of section 1256(g)(9)(B).
ISSUE
 If a Category 1 or Category 2 OneChicago LLC (OneChicago) Market Maker satisfies the Market Maker requirements described below and satisfies the Section 1256 Dealer Qualification quotation requirements described below, is it a dealer in securities futures contracts (SFCs) within the meaning of s 1256(g)(9)(B) of the Internal Revenue Code?
FACTS
 OneChicago has been designated by the Commodity Futures Trading Commission (CFTC) as a contract market that is permitted to list SFCs. As such, OneChicago is a “qualified board or exchange” within the meaning of s 1256(g)(7). OneChicago has a market maker program under which OneChicago members may qualify as OneChicago Market Makers eligible for the market maker exclusion provided in OneChicago’s customer margin rules. OneChicago Market Makers are obligated to provide liquidity for their specifically assigned SFC products that trade on OneChicago. For this purpose, an SFC product consists of contracts that may have varying maturities but that all relate to a particular underlying security or a particular narrow-based index of securities.
 A Category 1 or Category 2 OneChicago Market Maker must meet all of the following requirements:
 (1) Be a member of OneChicago;
 (2) Be registered as a floor trader or floor broker with the CFTC or as a dealer with the Securities and Exchange Commission (SEC);
 (3) Maintain records sufficient to prove compliance with OneChicago Market Maker requirements and the related regulations and rules of the CFTC or SEC, as applicable, including, without limitation, trading account statements and other financial records sufficient to detail activity; and
 (4) Hold itself out as willing to buy and sell SFCs for its own account on a regular or continuous basis.
 For a OneChicago Market Maker to fulfill the regular or continuous requirement in paragraph (4) above, it must satisfy the following criteria, as applicable, for each of its assigned SFC products:
 Category 1 Market Maker — The member provides continuous two-sided quotations throughout the trading day for all delivery months of all assigned SFC products (where such assigned SFC products represent in the aggregate at least a meaningful proportion of the total trading volume on OneChicago), except during unusual market conditions as determined by OneChicago (such as a fast market in either an SFC product or a security underlying an SFC product), at which time the member must use its best efforts to quote continuously and competitively; and, when the member provides quotations, it quotes for a minimum of one SFC with a Maximum Bid/Ask Spread of no more than the greater of $0.20 or 150% of the bid/ask spread in the primary market for the security underlying each SFC product; or
 Category 2 Market Maker — The member responds to at least 75% of the requests for quotation (RFQs) for all delivery months of all assigned SFC products (where such assigned SFC products represent in the aggregate at least a meaningful proportion of the total trading volume on OneChicago), except during unusual market conditions as determined by OneChicago (such as a fast market in either an SFC product or a security underlying an SFC product), at which times the member must use its best efforts to quote competitively; and, when the member responds to RFQs, it quotes within five seconds for a minimum of one SFC with a Maximum Bid/Ask Spread of no more than the greater of $0.20 or 150% of the bid/ask spread in the primary market for the security underlying each SFC product.
 For purposes of the preceding requirements for Category 1 and Category 2 Market Makers, a “meaningful proportion of the total trading volume on OneChicago” means a minimum of 20% of the trading volume of SFCs traded on OneChicago during the calendar quarter.
 Any OneChicago Market Maker that fails to comply with the OneChicago rules, CFTC rules, or SEC rules, as applicable, is subject to disciplinary action in accordance with OneChicago rules.
 Section 1256 Dealer Qualification. Category 1 and Category 2 Market Makers seeking to qualify as a s 1256(g)(9)(B) dealer under OneChicago’s market maker program must agree to meet minimum quotation size requirements for all of their assigned SFC products that are specified for purposes of the market maker exclusion provided in OneChicago’s margin rules. Category 1 and Category 2 Market Makers must provide continuous two-sided quotations or respond to requests for quotations in accordance with the applicable obligations set forth above by quoting:
 (a) ten contracts for each product not covered by (b) or (c);
 (b) five contracts for each product specified by the member to the extent such quotations are provided for delivery months other
than the next two delivery months then trading; and
 (c) one contract for any single stock futures contract where the average market price for the underlying stock was $100 or higher for the preceding calendar month or for any narrow-based stock index futures contract, as defined by s 1a(25) of the Commodity Exchange Act.
LAW
 Section 1256(g)(8)(A) defines the term “options dealer” to mean any person registered with an appropriate national securities exchange as a market maker or specialist in listed options. Section 1256(g)(9)(B) provides that a person shall be treated as a dealer in SFCs or options on such contracts if the Secretary determines that such person performs, with respect to such contracts or options, as the case may be, functions similar to the functions performed by an options dealer. Section 1256(g)(9)(B) further provides that such determination shall be made to the extent appropriate to carry out the purposes of that section.
 The legislative history for s 1256(g)(9) states the following with respect to the determination process:
   The determination of who is a dealer in securities futures contracts is to be made in a manner that is appropriate to carry out the purposes of the provision, which generally is to provide comparable tax treatment between dealers in securities futures contracts, on the one hand, and dealers in equity options, on the other. Although traders in securities futures contracts (and options on such contracts) may not have the same market-making obligations as market makers or specialists in equity options, many traders are expected to perform analogous functions to such market makers or specialists by providing market liquidity for securities futures contracts (and options) even in the absence of a legal obligation to do so. Accordingly, the absence of market-making obligations is not inconsistent with a determination that a class of traders are dealers in securities futures contracts (and options), if the relevant factors, including providing market liquidity for such contracts (and options), indicate that the market functions of the traders is comparable to that of equity options dealers.
H.R. Conf. Rep. No. 106-1033, at 1036 (2000).
HOLDING
 It is determined that Category 1 and Category 2 OneChicago Market Makers that satisfy the Market Maker requirements described above and satisfy the Section 1256 Dealer Qualification quotation requirements described above perform functions similar to the functions performed by options dealers (as defined in s 1256(g)(8)(A)) and that these OneChicago Market Makers are therefore dealers in SFCs within the meaning of s 1256(g)(9)(B). This determination will cease to apply in the event of material changes in the OneChicago Market Maker program affecting the Category 1 or Category 2 Market Makers described above. See s 601.601(d)(2)(v) of the Income Tax Regulations.
EFFECTIVE DATE
 The effective date of this ruling is the date of publication in the Internal Revenue Bulletin. Because this ruling is prospective only, the holding applies to SFCs that are entered into by a dealer in SFCs on or after the effective date of this ruling.
DRAFTING INFORMATION
 The principal author of this revenue ruling is K. Scott Brown of the Office of Associate Chief Counsel (Financial Institutions & Products). For further information regarding this revenue ruling, contact K. Scott Brown at (202) 622- 3920 (not a toll-free call).
 Rev. Rul. 2004-95, 2004-38 I.R.B. 492
Revenue Ruling 2004-96
Rev. Rul. 2004-96
Rev. Rul. 2004-96, 2004-41 I.R.B. 593
                      Internal Revenue Service (I.R.S.)
                                Revenue Ruling
     FEDERAL RATES; ADJUSTED FEDERAL RATES; ADJUSTED FEDERAL LONG-TERM RATE
                         AND THE LONG-TERM EXEMPT RATE
                         Released: September 17, 2004
                          Published: October 12, 2004
 Section 42.–Low-Income Housing Credit
 The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the month of October 2004.
Section 280G.–Golden Parachute Payments
 Federal short-term, mid-term, and long-term rates are set forth for the month of October 2004.
Section 382.–Limitation on Net Operating Loss Carryforwards and Certain Built-In Losses Following Ownership Change
 The adjusted applicable federal long-term rate is set forth for the month of October 2004.
Section 412.–Minimum Funding Standards
 The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the month of October 2004.
Section 467.–Certain Payments for the Use of Property or Services
 The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the month of October 2004.
Section 468.–Special Rules for Mining and Solid Waste Reclamation and Closing Costs
 The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the month of October 2004.
Section 482.–Allocation of Income and Deductions Among Taxpayers
 Federal short-term, mid-term, and long-term rates are set forth for the month of October 2004.
Section 483.–Interest on Certain Deferred Payments
 The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the month of October 2004.
Section 642.–Special Rules for Credits and Deductions
 Federal short-term, mid-term, and long-term rates are set forth for the month of October 2004.
Section 807.–Rules for Certain Reserves
 The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the month of October 2004.
Section 846.–Discounted Unpaid Losses Defined
 The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the month of October 2004.
Section 1288.–Treatment of Original Issue Discount on Tax-Exempt Obligations
 The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the month of October 2004.
Section 7520.–Valuation Tables
 The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the month of October 2004.
Section 7872.–Treatment of Loans With Below-Market Interest Rates
 The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the month of October 2004.
Section 1274.–Determination of Issue Price in the Case of Certain Debt Instruments Issued for Property
 Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes of sections 382, 642, 1274, 1288, and other sections of the Code, tables set forth the rates for October 2004.
 Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes of sections 382, 642, 1274, 1288, and other sections of the Code, tables set forth the rates for October 2004.
 This revenue ruling provides various prescribed rates for federal income tax purposes for October 2004 (the current month). Table 1 contains the short-term, mid-term, and long-term applicable federal rates (AFR) for the current month for purposes of section 1274(d) of the Internal Revenue Code. Table 2 contains the short-term, mid-term, and long-term adjusted applicable federal rates (adjusted AFR) for the current month for purposes of section 1288(b). Table 3 sets forth the adjusted federal long-term rate and the long-term tax-exempt rate described in section 382(f). Table 4 contains the appropriate percentages for determining the low-income housing credit described in section 42(b)(2) for buildings placed in service during the current month. Finally, Table 5 contains the federal rate for determining the present value of an annuity, an interest for life or for a term of years, or a remainder or a reversionary interest for purposes of section 7520.
——————————————————-
              REV. RUL. 2004-96 TABLE 1
   Applicable Federal Rates (AFR) for October 2004
               Period for Compounding
           Annual    Semiannual Quarterly Monthly
Short-Term
      AFR 2.26%     2.25%      2.24%     2.24%
 110% AFR 2.50%     2.48%      2.47%     2.47%
 120% AFR 2.72%     2.70%      2.69%     2.68%
 130% AFR 2.95%     2.93%      2.92%     2.91%
 Mid-Term
      AFR 3.62%     3.59%      3.57%     3.56%
 110% AFR 3.99%     3.95%      3.93%     3.92%
 120% AFR 4.36%     4.31%      4.29%     4.27%
 130% AFR 4.72%     4.67%      4.64%     4.63%
 150% AFR 5.46%     5.39%      5.35%     5.33%
 175% AFR 6.38%     6.28%      6.23%     6.20%
Long-Term
      AFR 4.84%     4.78%      4.75%     4.73%
 110% AFR 5.33%     5.26%      5.23%     5.20%
 120% AFR 5.82%     5.74%      5.70%     5.67%
 130% AFR 6.31%     6.21%      6.16%     6.13%
——————————————————-
—————————————————————
                  REV. RUL. 2004-96 TABLE 2
                Adjusted AFR for October 2004
                   Period for Compounding
                        Annual Semiannual Quarterly Monthly
Short-term adjusted AFRÂ 1.57%Â Â 1.56%Â Â Â Â Â Â 1.56%Â Â Â Â Â 1.55%
Mid-term adjusted AFRÂ Â Â 2.84%Â Â 2.82%Â Â Â Â Â Â 2.81%Â Â Â Â Â 2.80%
Long-term adjusted AFRÂ Â 4.27%Â Â 4.23%Â Â Â Â Â Â 4.21%Â Â Â Â Â 4.19%
—————————————————————
——————————————————————————-
                          REV. RUL. 2004-96 TABLE 3
                  Rates Under Section 382 for October 2004
Adjusted federal long-term rate for the current month                    4.27%
Long-term tax-exempt rate for ownership changes during the current month 4.64%
 (the highest of the adjusted federal long-term rates for the current
 month and the prior two months.)
——————————————————————————-
——————————————————————————-
                          REV. RUL. 2004-96 TABLE 4
       Appropriate Percentages Under Section 42(b)(2) for October 2004
Appropriate percentage for the 70% present value low-income housing      7.98%
 credit
Appropriate percentage for the 30% present value low-income housing      3.42%
 credit
——————————————————————————-
——————————————————————————-
                          REV. RUL. 2004-96 TABLE 5
                  Rate Under Section 7520 for October 2004
Applicable federal rate for determining the present value of an annuity,  4.4%
 an interest for life or a term of years, or a remainder or reversionary
 interest
——————————————————————————-
 Rev. Rul. 2004-96, 2004-41 I.R.B. 593
Revenue Ruling 2004-93
Rev. Rul. 2004-93
Rev. Rul. 2004-93, 2004-37 I.R.B. 462
                      Internal Revenue Service (I.R.S.)
                                Revenue Ruling
                    LIFO; PRICE INDEXES; DEPARTMENT STORES
                         Published: September 13, 2004
 Section 472.–Last-in, First-out Inventories, 26 CFR 1.472-1: Last-in, first-out inventories.
 LIFO; price indexes; department stores. The July 2004 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, July 31, 2004.
 LIFO; price indexes; department stores. The July 2004 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, July 31, 2004.
 The following Department Store Inventory Price Indexes for July 2004 were issued by the Bureau of Labor Statistics. The indexes are accepted by the Internal Revenue Service, under s 1.472-1(k) of the Income Tax Regulations and Rev. Proc. 86-46, 1986-2 C.B. 739, for appropriate application to inventories of department stores employing the retail inventory and last-in, first-out inventory methods for tax years ended on, or with reference to, July 31, 2004.
 The Department Store Inventory Price Indexes are prepared on a national basis and include (a) 23 major groups of departments, (b) three special combinations of the major groups — soft goods, durable goods, and miscellaneous goods, and (c) a store total, which covers all departments, including some not listed separately, except for the following: candy, food, liquor, tobacco, and contract departments.
   BUREAU OF LABOR STATISTICS, DEPARTMENT STORE INVENTORY PRICE INDEXES BY
                              DEPARTMENT GROUPS
                (January 1941 = 100, unless otherwise noted)
                     Groups             July 2003   July 2004    Percent
                                                                     Change
                                                                   from July
                                                                    2003 to
                                                                   July 2004
                                                                     [FN1]
——————————————————————————-
1.        Piece Goods ………………….. 487.0       507.8          4.3
2.        Domestics and Draperies ……….. 570.0       525.0         -7.9
3.        Women’s and Children’s Shoes …… 613.9       608.5         -0.9
4.        Men’s Shoes ………………….. 831.2       831.7          0.1
5.        Infants’ Wear ………………… 573.3       560.5         -2.2
6.        Women’s Underwear …………….. 509.0       508.0         -0.2
7.        Women’s Hosiery ………………. 346.9       330.4         -4.8
8.        Women’s and Girls’
            Accessories ………………… 537.8       565.8          5.2
9.        Women’s Outerwear and Girls’
            Wear ………………………. 342.8       335.9         -2.0
10.       Men’s Clothing ……………….. 533.3       532.7         -0.1
11.       Men’s Furnishings …………….. 562.7       567.0          0.8
12.       Boys’ Clothing and
            Furnishings ………………… 424.4       420.9         -0.8
13.       Jewelry ……………………… 882.3       907.8          2.9
14.       Notions ……………………… 792.1       798.6          0.8
15.       Toilet Articles and Drugs ……… 992.0       993.3          0.1
16.       Furniture and Bedding …………. 619.9       616.3         -0.6
17.       Floor Coverings ………………. 587.3       587.7          0.1
18.       Housewares …………………… 722.5       712.1         -1.4
19.       Major Appliances ……………… 213.3       199.6         -6.4
20.       Radio and Television …………… 45.3        41.6         -8.2
21.       Recreation and Education
            [FN2] ………………………. 82.8        80.3         -3.0
22.       Home Improvements [FN2] ……….. 123.7       129.8          4.9
23.       Automotive Accessories [FN2] …… 111.4       112.7          1.2
Groups 1-15: Soft Goods …………………. 549.6Â Â Â Â Â Â Â 545.1Â Â Â Â Â Â Â Â Â -0.8
Groups 16-20: Durable Goods ……………… 394.3Â Â Â Â Â Â Â 382.3Â Â Â Â Â Â Â Â Â -3.0
Groups 21-23: Misc. Goods [FN2] …………… 94.0Â Â Â Â Â Â Â Â 93.3Â Â Â Â Â Â Â Â Â -0.7
          Store Total [FN3] …………….. 493.4       487.2         -1.3
FN1. Absence of a minus sign before the percentage change in this column
 signifies a price increase.
FN2. Indexes on a January 1986 = 100 base.
FN3. The store total index covers all departments, including some not listed
 separately, except for the following: candy, food, liquor, tobacco and
 contract departments.
DRAFTING INFORMATION
 The principal author of this revenue ruling is Michael Burkom of the Office of Associate Chief Counsel (Income Tax and Accounting). For further information regarding this revenue ruling, contact Mr. Burkom at (202) 622- 7924 (not a toll-free call).
 Rev. Rul. 2004-93, 2004-37 I.R.B. 462
Revenue Ruling 2004-70
Rev. Rul. 2004-70
Rev. Rul. 2004-70, 2004-37 I.R.B. 460
                      Internal Revenue Service (I.R.S.)
                                Revenue Ruling
                  FRINGE BENEFITS AIRCRAFT VALUATION FORMULA
                         Published: September 13, 2004
 Section 61.–Gross Income Defined, 26 CFR 1.61-21: Taxation of fringe benefits.
 Fringe benefits aircraft valuation formula. The Standard Industry Fare Level (SIFL) cents-per-mile rates and terminal charges in effect for the second half of 2004 are set forth for purposes of determining the value of noncommercial flights on employer-provided aircraft under section 1.61-21(g) of the regulations.
 Fringe benefits aircraft valuation formula. The Standard Industry Fare Level (SIFL) cents-per-mile rates and terminal charges in effect for the second half of 2004 are set forth for purposes of determining the value of noncommercial flights on employer-provided aircraft under section 1.61-21(g) of the regulations.
 For purposes of the taxation of fringe benefits under section 61 of the Internal Revenue Code, section 1.61-21(g) of the Income Tax Regulations provides a rule for valuing noncommercial flights on employer-provided aircraft. Section 1.61-21(g)(5) provides an aircraft valuation formula to determine the value of such flights. The value of a flight is determined under the base aircraft valuation formula (also known as the Standard Industry Fare Level formula or SIFL) by multiplying the SIFL cents-per-mile rates applicable for the period during which the flight was taken by the appropriate aircraft multiple provided in section 1.61-21(g)(7) and then adding the applicable terminal charge. The SIFL cents-per-mile rates in the formula and the terminal charge are calculated by the Department of Transportation and are reviewed semi-annually.
 The following chart sets forth the terminal charges and SIFL mileage rates:
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Period During Which the       Terminal      SIFL Mileage Rates
 Flight Is Taken               Charge
7/1/04 - 12/31/04Â Â Â Â Â Â Â Â Â Â Â Â Â $35.21Â Â Â Â Â Â Â Â Up to 500 miles = $.1926 per mile
                                             501-1500 miles = $.1469 per mile
                                             Over 1500 miles = $.1412 per mile
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DRAFTING INFORMATION
 The principal author of this revenue ruling is Kathleen Edmondson of the Office of Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities). For further information regarding this revenue ruling, contact Ms. Edmondson at (202) 622-6040 (not a toll-free call).
 Rev. Rul. 2004-70, 2004-37 I.R.B. 460