********************************************************    
                         NOTICE
********************************************************

This document was converted from
WordPerfect to ASCII Text format.

Content from the original version of the document such as
headers, footers, footnotes, endnotes, graphics, and page numbers
will not show up in this text version.

All text attributes such as bold, italic, underlining, etc. from
the
original document will not show up in this text version.

Features of the original document layout such as
columns, tables, line and letter spacing, pagination, and margins
will not be preserved in the text version.

If you need the complete document, download the
WordPerfect version or Adobe Acrobat version, if available.

*****************************************************************
                FEDERAL COMMUNICATIONS COMMISSION
                     WASHINGTON, D.C.  20554

                         February 6, 1987


                                             In reply refer to:
                                                   RAO Letter 4
                                                               
Responsible Accounting Officer
FCC Form M and Report 901

Subject:  Interim Reporting of Income Taxes for 1987

     The Tax Reform Act of 1986, effective July 1, 1987, reduces the corporate income tax rate
from 46 percent to 34 percent, which results in a blended rate of approximately 40 percent for
calendar year taxpaying companies.

     We have received several inquiries regarding the appropriate accounting for this change in the
tax rate in interim reports to this Commission.  For financial reporting outside of the Commission
(SEC, shareholders, etc.) and under the Tax Reform Act of 1986, income taxes are required to be
calculated based on a blended rate.

     In order to avoid any misunderstanding and to maintain uniformity in the accounting system
prescribed by Part 31, we are directing carriers to use a blended rate in monthly FCC Report 901 filing
with this Commission.


                                   Sincerely .


                                   Gerald Brock,
                                   Chief, Accounting and Audits Division