Section 511 of the Hiring Incentives to Restore Employment Act (the HIRE Act) amended the Code by adding new section 6038D, Information with respect to foreign financial assets. This notice suspends the information reporting requirements until the Service releases Form 8938, Statement of Specified Foreign Financial Assets, and the revised Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund.

This notice provides additional administrative relief to persons whose requirement to file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts, (FBAR) to report signature authority over but no financial interest in foreign financial accounts held during calendar year 2009 or earlier calendar years was properly deferred under Notice 2009-62, 2009-35 I.R.B. 260, or Notice 2010-23, 2010-11 I.R.B. 441. Notice 2010-23 modified and supplemented.

Basis of stock. This notice provides interim guidance to taxpayers under section 1012 of the Code on issues relating to the basis of stock that may be subject to broker reporting under section 6045.

Optional standard mileage rates. This announcement advises the public that the Internal Revenue Service is revising the optional standard mileage rates for substantiating the costs of operating an automobile for business, medical, or moving purposes. Beginning July 1, 2011, the rates are 55.5 cents for business use of an automobile and 23.5 cents for the cost of using an automobile as a medical or moving expense. Notice 2010-88 modified.

This notice provides additional administrative relief to persons whose requirement to file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts, (FBAR) to report signature authority over foreign financial accounts held during calendar year 2009 or earlier calendar years was properly deferred under Notice 2009-62, 2009-35 I.R.B. 260, or Notice 2010-23, 2010-11 I.R.B. 441.

On August 31, 2009, the Department of the Treasury and the Internal Revenue Service published Notice 2009-62, which, in part, extended the filing deadline for persons with no financial interest in a foreign financial account but with signature or other authority over that account (hereinafter referred to as “signature authority”) for the 2008 or earlier calendar years. In Notice 2010-23, the Department of the Treasury and the IRS further extended relief to persons whose filing deadline was properly deferred by Notice 2009-62 and provided a new filing deadline to June 30, 2011, to report signature authority over, but no financial interest in, foreign financial accounts for calendar year 2009 or earlier calendar years. The extensions were provided to allow the Treasury Department time to develop comprehensive FBAR guidance.

On February 24, 2011, the Financial Crimes Enforcement Network (FinCEN) published final regulations (76 FR 10234) amending the Bank Secrecy Act implementing regulations regarding FBARs, found at 31 CFR 1010.350 (formerly 31 CFR 103.24). The regulations became effective on March 28, 2011, and apply to FBARs required to be filed by June 30, 2011, with respect to foreign financial accounts maintained in calendar year 2010, as well as to FBARs for subsequent calendar years. The final regulations also provide that individuals who properly deferred their FBAR filing obligations pursuant to Notice 2010-23 may apply the provisions of the final regulations in determining their FBAR filing requirements for reports due June 30, 2011, with respect to foreign financial accounts maintained in calendar years beginning before 2010. In March 2011, the IRS released a revised FBAR form with accompanying instructions that reflect the amendments made by the final FBAR regulations.

The IRS and FinCEN recently have been informed that individuals with signature authority over, but no financial interest in, foreign financial accounts are having difficulty compiling the information needed to file complete and accurate FBARs with respect to the 2009 or earlier calendar years by the June 30, 2011 deadline, as previously extended by Notice 2009-62 or Notice 2010-23. Accordingly, the IRS and FinCEN provide the following additional administrative relief:

Persons having signature authority over, but no financial interest in, a foreign financial account in 2009 or earlier calendar years for which the reporting deadline was extended by Notice 2009-62 or Notice 2010-23 will now have until November 1, 2011, to file FBARs with respect to those accounts. The deadline for reporting signature authority over, or a financial interest in, foreign financial accounts for the 2010 calendar year remains June 30, 2011.

The administrative relief provided in this notice does not limit the relief provided in FinCEN’s Notice 2011-1, which was released on May 31, 2011, and revised on June 6, 2011. A copy of revised FinCEN Notice 2011-1 may be found at www.fincen.gov. Additionally, the administrative relief provided in this notice does not affect the requirements to provide information or file FBARs in connection with the IRS’s 2009 Offshore Voluntary Disclosure Program or the 2011 Offshore Voluntary Disclosure Initiative. Nor does this notice alter the deadlines for electing to participate in, or fulfilling the submission requirements of, the Offshore Voluntary Disclosure Program or the Offshore Voluntary Disclosure Initiative.

Notice 2010-23 is modified and supplemented.

The principal author of this notice is Emily M. Lesniak of the Office of Associate Chief Counsel (Procedure and Administration). For further information regarding this notice, contact Emily M. Lesniak at (202) 622-4570 (not a toll-free call).

Section 511 of the Hiring Incentives to Restore Employment Act, Pub. L. No. 111-147, 124 Stat. 71, enacted on March 18, 2010 (the HIRE Act), amended the Internal Revenue Code by adding new section 6038D, Information With Respect to Foreign Financial Assets. Section 6038D applies to taxable years beginning after March 18, 2010. Under section 6038D(a), any individual who during the taxable year holds an interest in any specified foreign financial asset is required to attach to his or her income tax return for the taxable year certain required information with respect to each specified foreign financial asset if the aggregate value of all of the individual’s specified foreign financial assets exceeds $50,000.

Section 521 of the HIRE Act further amended the Internal Revenue Code by adding new section 1298(f). Section 1298(f) is effective on March 18, 2010. Under section 1298(f), United States persons who are shareholders of a passive foreign investment company (PFIC) are required to file an annual report containing such information as the Secretary may require. Prior to the enactment of section 1298(f), PFIC shareholders were required to file Form 8621 in certain circumstances. On April 6, 2010, the Department of the Treasury and the Internal Revenue Service (IRS) published Notice 2010-34, “PFIC Shareholder Reporting Under New Section 1298(f) for Tax Years Beginning Before March 18, 2010,” 2010-17 I.R.B. 612, which provided that shareholders of a PFIC that were not otherwise required to file Form 8621 annually prior to the enactment of section 1298(f) would not be required to file an annual report as a result of the addition of section 1298(f) for taxable years beginning before March 18, 2010.

The Department of the Treasury and the IRS intend to issue regulations under sections 6038D and 1298(f), and the IRS intends to release Form 8938, “Statement of Specified Foreign Financial Assets,” and a revised Form 8621, “Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund,” modified to reflect the requirements of section 1298(f). An individual required to report an interest in one or more specified foreign financial assets under section 6038D will be required to attach Form 8938 to the individual’s income tax return for the taxable year to report the required information. A PFIC shareholder required to report information under section 1298(f) will be required to attach the revised Form 8621 to the PFIC shareholder’s income tax return or information return (e.g., Form 1065, “U.S. Return of Partnership Income”) for the taxable year to report the required information.

Individuals with reporting requirements under section 6038D may have to file an income tax return for a taxable year before the IRS releases Form 8938. This notice suspends the requirement for these individuals to attach Form 8938 to income tax returns that are filed before the release of Form 8938.

Similarly, PFIC shareholders that would not be required to file Form 8621 under the current Instructions to such form may, under section 1298(f), have to file an income tax return or information return (e.g., Form 1065) for a taxable year beginning on or after March 18, 2010, but before the IRS releases revised Form 8621. Pending the release of the revised Form 8621, modified to reflect the requirements of section 1298(f), this notice suspends the section 1298(f) reporting requirement for taxable years beginning on or after March 18, 2010, for PFIC shareholders that are not otherwise required to file Form 8621 as provided in the current Instructions to Form 8621. PFIC shareholders with Form 8621 reporting obligations as provided in the current Instructions to Form 8621 (e.g., upon disposition of stock of a PFIC or with respect to a qualified electing fund under section 1293) must continue to file the current Form 8621 with an income tax or information return filed prior to the release of the revised Form 8621.

Following the release of Form 8938 or revised Form 8621, individuals and PFIC shareholders for which the filing of Form 8938 or 8621 has been suspended under this notice for a taxable year (suspended taxable year) will be required to attach Form 8938, Form 8621, or both, as appropriate, for the suspended taxable year to their next income tax or information return required to be filed with the IRS.

Under section 6501(c)(8), the period of limitation for assessment of tax with respect to periods for which reporting is required under sections 6038D or 1298(f) will not expire before three years after the date on which the IRS receives Forms 8938 or 8621, as appropriate, for the taxable year. A Form 8938 or 8621 filed for a suspended taxable year with a timely filed income tax or information return (taking into account extensions) as required by this notice will be treated as having been filed on the date that the income tax or information return for the suspended taxable year was filed. The failure to furnish Forms 8938 and 8621 for the suspended taxable year as described in this notice may result in the extension of the period of limitation for the suspended taxable year under section 6501(c)(8), and penalties may apply.

Compliance with sections 6038D and 1298(f) does not relieve a person of the responsibility to file Form TD F 90-22.1, “Report of Foreign Bank and Financial Accounts,” (FBAR) if the FBAR is otherwise required to be filed.

The principal author of this notice is Joseph Henderson of the Office of the Associate Chief Counsel (International). For further information regarding this notice as it relates to section 6038D, please contact Mr. Henderson at (202) 622-3880 (not a toll-free call). For further information regarding this notice as it relates to section 1298(f), please contact Susan E. Massey at (202) 622-3840 (not a toll-free call).

This notice provides interim guidance under § 1012 of the Internal Revenue Code on issues relating to the basis of stock.

Under § 1.1012-1(e) of the Income Tax Regulations, taxpayers may use the average basis method to determine the basis of stock in a regulated investment company (RIC). Section 403 of the Energy Improvement and Extension Act of 2008, Div. B of Pub. L. No. 110-343, 122 Stat. 3765 (the Act), amended § 1012 to allow taxpayers to average the basis of stock acquired after December 31, 2010, in connection with a dividend reinvestment plan (DRP), as well. A taxpayer that does not use the average basis method determines the basis of stock under § 1012(a) by its cost.

The Act also amended § 6045 to require brokers to report, upon the sale of stock, adjusted basis of the stock sold and whether gain or loss is long-term or short-term, effective generally for stock acquired after December 31, 2010, and for RIC or DRP stock acquired after December 31, 2011.

Final regulations implementing these amendments were published on October 18, 2010, T.D. 9504, 2010-47 I.R.B. 670, 75 F.R. 64072. Thereafter, public stakeholders requested clarification or raised new issues. The Internal Revenue Service and Treasury Department intend to publish proposed regulations addressing some of these issues. Taxpayers may rely on the guidance provided in this notice pending publication of superseding guidance.

Comments are requested on issues arising under this notice. Comments should be submitted in writing on or before August 8, 2011, and should include a reference to Notice 2011-56. Comments may be submitted to CC:PA:LPD:PR (Notice 2011-56), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044, or electronically to Notice.Comments@irscounsel.treas.gov. Please include “Notice 2011-56” in the subject line of any electronic communications.

Submissions may be hand delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (Notice 2011-56), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC 20224. All comments are available for public inspection and copying.

The principal authors of this notice are Amy Pfalzgraf and Edward C. Schwartz of the Office of the Associate Chief Counsel (Income Tax & Accounting). For further information regarding this notice, please contact Mr. Schwartz at (202) 622-4960 (not a toll-free call).

This announcement informs taxpayers that the Internal Revenue Service is modifying Notice 2010-88, 2010-51 I.R.B. 882, by revising the optional standard mileage rates for computing the deductible costs of operating an automobile for business, medical, or moving expense purposes and for determining the reimbursed amount of these expenses that is deemed substantiated. This modification results from recent increases in the price of fuel.

The revised standard mileage rates are:

The mileage rate that applies to the deduction for charitable contributions is fixed under § 170(i) of the Internal Revenue Code at 14 cents per mile.

The revised standard mileage rates set forth in this announcement apply to deductible transportation expenses paid or incurred for business, medical, or moving expense purposes on or after July 1, 2011, and to mileage allowances that are paid both (1) to an employee on or after July 1, 2011, and (2) for transportation expenses paid or incurred by the employee on or after July 1, 2011.

The standard mileage rates set forth in Notice 2010-88 continue to apply to deductible transportation expenses paid or incurred for business, medical, or moving expense purposes before July 1, 2011, and to mileage allowances paid (1) to an employee before July 1, 2011, or (2) with respect to transportation expenses paid or incurred by the employee before July 1, 2011. All other provisions of Notice 2010-88 remain in effect.

Notice 2010-88 is modified.

The principal author of this announcement is Bernard P. Harvey of the Office of Associate Chief Counsel (Income Tax and Accounting). For further information regarding this announcement, contact Mr. Harvey at (202) 622-4930 (not a toll-free call).