Notice 2016–22 provides employers with transition relief and guidance on the amendment and extension of the Work Opportunity Tax Credit (WOTC) by the Protecting Americans from Tax Hikes Act of 2015 (PATH Act). Specifically, the notice provides employers with transition relief with respect to the 28-day deadline for requesting certifications from a designated local agency (DLA) for individuals (other than qualified long-term unemployment recipients) hired on or after January 1, 2015 and on or before May 31, 2016. The notice also provides employers with guidance on the new qualified long-term unemployment recipient targeted group, and transition relief with respect to qualified long-term unemployment recipients hired on or after January 1, 2016 and on or before May 31, 2016.

Resident populations of the 50 states, the District of Columbia, Puerto Rico, and the insular areas for purposes of determining the 2016 calendar year (1) state housing credit ceiling under section 42(h) of the Code, (2) private activity bond volume cap under section 146, and (3) private activity bond volume limit under section 142(k) are reproduced.

This notice sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for March 2016 used under § 417(e)(3)(D), the 24-month average segment rates applicable for March 2016, and the 30-year Treasury rates. These rates reflect the application of § 430(h)(2)(C)(iv), which was added by the Moving Ahead for Progress in the 21st Century Act, Public Law 112–141 (MAP–21) and amended by section 2003 of the Highway and Transportation Funding Act of 2014 (HATFA).

Revocation of IRC 501(c)(3) Organizations for failure to meet the code section requirements. Contributions made to the organizations by individual donors are no longer deductible under IRC 170(b)(1)(A).

Notice 2016–22 provides employers with transition relief and guidance on the amendment and extension of the Work Opportunity Tax Credit (WOTC) by the Protecting Americans from Tax Hikes Act of 2015 (PATH Act). Specifically, the notice provides employers with transition relief with respect to the 28-day deadline for requesting certifications from a designated local agency (DLA) for individuals (other than qualified long-term unemployment recipients) hired on or after January 1, 2015 and on or before May 31, 2016. The notice also provides employers with guidance on the new qualified long-term unemployment recipient targeted group, and transition relief with respect to qualified long-term unemployment recipients hired on or after January 1, 2016 and on or before May 31, 2016.

This notice provides guidance regarding the criteria for designation of a terminal located within a secure area of an airport as a Secured Airport Terminal (SAT) for purposes of §§ 4081 and 4082. This notice also provides procedures for the IRS to maintain an approved list of airports with such SATs. In addition, this notice provides procedures for a terminal operator to request that a terminal be placed on the SAT list.

This notice provides guidance regarding the criteria for designation of a terminal located within a secure area of an airport as a Secured Airport Terminal (SAT) for purposes of §§ 4081 and 4082. This notice also provides procedures for the IRS to maintain an approved list of airports with such SATs. In addition, this notice provides procedures for a terminal operator to request that a terminal be placed on the SAT list.

This revenue procedure describes procedures for taxpayers and other entities under the jurisdiction of the Large Business and International (LB&I), Small Business and Self Employed (SB/SE), and Tax Exempt and Government Entities (TE/GE) Operating Divisions to submit issues for consideration under the Internal Revenue Service’s Industry Issue Resolution (IIR) Program.

This procedure provides specifications for the private printing of red-ink substitutes for the most recent revisions of Forms W–2c and W–3c. This procedure will be reproduced as the next revision of Publication 1223. Rev. Proc. 2014–56 is superseded.

This notice requests comments on the new partnership audit regime instituted as part of the Bipartisan Budget Act of 2015 (“BBA”). The Service intends to issue regulations for this new regime and wishes to collect comments prior to that issuance. This notice outlines the basic features of the BBA partnership audit regime and highlights some of the areas on which the Service would like to receive comments.

This notice provides guidance regarding the criteria for designation by the Internal Revenue Service (IRS) of a terminal located within a secure area of an airport as a Secured Airport Terminal (SAT) for purposes of §§ 4081 and 4082. This notice also provides procedures for the IRS to maintain an approved list of airports with such SATs (SAT list). In addition, this notice provides procedures for a terminal operator to request that a terminal be placed on the SAT list.

The American Jobs Creation Act of 2004 (Pub. L. 108–357) and the Safe, Accountable, Flexible, Efficient Transportation Equity Act (Pub. L. 109–59) provided a new system for imposing excise tax on kerosene used in aviation. Under this system, kerosene generally is taxed at a rate of 24.3 cents per gallon (excluding the 0.1 cent per gallon imposed for the Leaking Underground Storage Tank Trust Fund (LUST) tax). However, if the kerosene is removed directly into the fuel tank of an aircraft from a terminal or refinery, it will be taxed at lower aviation rates. Furthermore, if nontaxable use kerosene is removed directly into the fuel tank of an aircraft from a terminal, the general rate of tax is reduced to zero. For purposes of these exceptions, refueler trucks, tankers, and tank wagons that meet certain conditions (“refuelers”) are treated as part of a terminal if the terminal is located within a secure area of an airport (i.e., a SAT).

H.R. Conf. Rep. No. 108–755, at 692 (2005), provided an initial list of terminals located within secure areas of airports (the SAT list). In Notice 2005–4, 2005–1 C.B. 289, the IRS adopted this list, with some modifications, as its initial SAT list. Notice 2005–80, 2005–2 C.B. 953, modified the SAT list. Currently, these documents are the only public record of the SAT list.

Section 4081(a)(1)(A)(i) and (ii) impose tax on the removal of taxable fuel, which includes kerosene, from any refinery or terminal.

Section 4081(a)(2)(A)(iii) prescribes a tax rate of 24.3 cents per gallon of kerosene for the tax imposed by § 4081(a)(1)(A). Section 4081(a)(2)(B) imposes an additional tax of 0.1 cent per gallon (referred to as the LUST financing rate).

Section 4081(a)(2)(C) reduces the tax rates on kerosene used in aviation under certain conditions. In the case of kerosene that is removed from any refinery or terminal directly into the fuel tank of an aircraft for use in aviation, the rate of tax under § 4081(a)(2)(A)(iii) is reduced from 24.3 cents per gallon to (i) 4.3 cents per gallon in the case of use for commercial aviation by a person registered for such use under § 4101 or (ii) 21.8 cents per gallon for use in the case of any aviation not described by § 4081(a)(2)(C)(i).

Section 4081(a)(3)(A) provides that, for purposes of § 4081(a)(2)(C), a refueler truck, tanker, or tank wagon shall be treated as part of a terminal if (i) such terminal is located within an airport, (ii) any kerosene which is loaded in such truck, tanker, or wagon at such terminal is for delivery only into aircraft at the airport in which such terminal is located, (iii) such truck, tanker, or wagon meets the requirements of § 4081(a)(3)(B) with respect to such terminal, and (iv) except in the case of exigent circumstances identified by the Secretary in regulations, no vehicle registered for highway use is loaded with kerosene at such terminal.

Section 4081(a)(3)(B) provides that refuelers meet the requirements of § 4081(a)(3) with respect to a terminal (and are therefore treated as part of a terminal) if such refueler—(i) has storage tanks, hose, and coupling equipment designed and used for the purposes of fueling aircraft, (ii) is not registered for highway use, and (iii) is operated by—(I) the terminal operator of such terminal, or (II) a person that makes a daily accounting to such terminal operator of each delivery of fuel from such refueler.

Section 4081(a)(3)(C) provides that the Secretary shall require under § 4101(d) reporting by such terminal operator of—(i) any information obtained under § 4081(a)(3)(B)(iii)(II) (that is, the daily accountings to terminal operators of fuel deliveries made by other persons operating refuelers), and (ii) any similar information maintained by such terminal operator with respect to deliveries of fuel made by refuelers operated by such terminal operator.

Section 4081(a)(3)(D) provides that (i) in the case of kerosene treated as removed from a terminal by reason of § 4081(a)(3), the rate of tax specified in § 4081(a)(2)(C)(i) (that is, 4.3 cents per gallon plus 0.1 cent per gallon LUST) applies if such terminal is located within a secured area of an airport, and (ii) in all other cases, the rate of tax specified in § 4081(a)(2)(C)(ii) (that is, 21.8 cents per gallon plus 0.1 cent per gallon LUST) applies.

Section 4082(e) provides that in the case of kerosene (other than kerosene with respect to which tax is imposed under § 4043) which is exempt from the tax imposed by § 4041(c) (other than by reason of a prior imposition of tax, for example, because of the operation of § 4041(f) or (g)) and which is removed from any refinery or terminal directly into the fuel tank of an aircraft (1) the rate of tax under § 4081(a)(2)(A)(iii) shall be zero and (2) if such aircraft is employed in foreign trade or trade between the United States and any of its possessions, the increase in such rate under § 4081(a)(2)(B) shall be zero. For purposes of § 4082(e), any removal described in § 4081(a)(3)(A) shall be treated as a removal from a terminal but only if such terminal is located within a secure area of an airport.

Section 4083(d)(1) provides that the Secretary may in administering compliance with subpart A of part III of subchapter A of chapter 32 (motor and aviation fuels), § 4041, and penalties and other administrative provisions related thereto—(A) enter any place at which taxable fuel is produced or is stored (or may be stored) for purposes of—(i) examining the equipment used to determine the amount or composition of such fuel and the equipment used to store such fuel, (ii) taking and removing samples of such fuel, and (iii) inspecting any books and records and any shipping papers pertaining to such fuel, and (B) detain, for the purposes referred in § 4083(d)(1)(A), any container which contains or may contain any taxable fuel.

Section 48.4101–1(c)(1)(vi) of the Manufacturers and Retailers Excise Tax regulations requires a terminal operator to register under § 4101.

In order to be designated as a SAT, a terminal must meet the following criteria:

(1) The terminal operator requests that the terminal be designated as a SAT according to the procedures in § 5 of this notice;

(2) The terminal operator is registered as a terminal operator under § 4101;

(3) The terminal is a terminal within the meaning of § 48.4081–1;

(4) The terminal is located within an airport;

(5) Only authorized vehicles are allowed to enter and exit the terminal;

(6) Kerosene received, stored, and removed is exclusively for delivery into the fuel tank of an aircraft at the terminal;

(7) Kerosene delivery into the fuel tank of an aircraft is made directly from the terminal, such as through a hydrant system, or by qualifying refuelers, as defined in § 4081(a)(3) that are used only to transport and deliver kerosene into the fuel tank of an aircraft;

(8) Except in the case of exigent circumstances identified by the Secretary in regulations, no vehicle registered for highway use is loaded with kerosene at such terminal; and

(9) The terminal has security measures that are consistent with customary business security practices designed to resist access to the terminal by unauthorized personnel and unauthorized vehicles.

(1) As of March 8, 2016, the following airports include an approved SAT and the terminal operator does not need to request SAT approval for that terminal. The airports are listed by the airport name and the TCN of the approved SAT.

(2) The IRS will maintain a current SAT list, which will be publicly available on the IRS website (in Microsoft Excel and PDF formats). The list will include the name of the airport and the TCN, or other such number the IRS may use for SAT designation, of the approved SAT.

This Notice is effective March 8, 2016.

The principal author of this notice is Rachel S. Smith of the Office of Associate Chief Counsel (Passthroughs & Special Industries). For further information regarding this notice, please contact Ms. Smith at (202) 317-6855 (not a toll-free number).

This notice provides guidance and transition relief for employers claiming the Work Opportunity Tax Credit (WOTC) under §§ 51 and 3111(e) of the Internal Revenue Code (Code), as extended and amended by the Protecting Americans from Tax Hikes Act of 2015, Pub. L. No. 114–113, div. Q (the PATH Act). Section 142(a) of the PATH Act amended § 51(c) of the Code to extend the WOTC through December 31, 2019. Section 142(b) of the PATH Act amended § 51(d) of the Code to expand the “targeted groups” of individuals, the employment of whom may qualify the employer for a credit listed in the statute, to include qualified long-term unemployment recipients (as defined in § 51(d)(15) of the Code). This notice provides guidance and transition relief beyond the 28-day deadline in § 51(d)(13)(A)(ii) of the Code for employers that hire members of targeted groups (other than qualified long-term unemployment recipients) on or after January 1, 2015, and on or before May 31, 2016. This notice also provides guidance and transition relief beyond the 28-day deadline in § 51(d)(13)(A)(ii) of the Code for employers that hire members of the new targeted group of qualified long-term unemployment recipients on or after January 1, 2016, and on or before May 31, 2016.

Section 51(a) of the Code provides the WOTC to employers based on a percentage of qualified wages paid during the taxable year. Section 51(b) of the Code defines qualified wages as wages paid or incurred by an employer during the taxable year to an individual who is a member of a targeted group. Section 51(d)(1) of the Code lists the targeted groups. Pursuant to § 51(d)(13)(A) of the Code, an individual is not treated as a member of a targeted group unless (1) on or before the day the individual begins work, the employer obtains certification from the designated local agency (DLA) that the individual is a member of a targeted group; or (2) the employer completes a pre-screening notice on or before the day the individual is offered employment and submits such notice to the DLA to request certification not later than 28 days after the individual begins work. To request certification from a DLA, an employer submits IRS Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, to the DLA no later than the 28th day after the day an individual who is a member of a targeted group begins work for the employer. An employer also must submit a Department of Labor Employment and Training Administration (ETA) Form 9061 (Individual Characteristics Form) or 9062 (Conditional Certification) to the DLA. Section 51(d)(12) of the Code provides that a DLA means a State employment security agency established in accordance with 29 U.S.C. §§ 49–49n.

Since originally enacted by § 1201 of the Small Business Job Protection Act of 1996, Pub. L. No. 104–188, the WOTC has been subject to a series of legislative extensions and modifications.

The PATH Act extends the WOTC through December 31, 2019 for taxable employers that hire members of a targeted group and for qualified tax-exempt organizations described in § 501(c) of the Code that hire qualified veterans.

The PATH Act also amends § 51(d)(1) of the Code to add qualified long-term unemployment recipients to the list of targeted groups, effective as of January 1, 2016. Section 51(d)(15) of the Code defines a qualified long-term unemployment recipient as any individual who is certified by a DLA as being in a period of unemployment which is not less than 27 consecutive weeks and includes a period in which the individual was receiving unemployment compensation under State or Federal law. This additional targeted group does not apply for purposes of qualified tax-exempt organizations taking the credit provided by § 3111(e) against an employer social security tax.

An employer must obtain certification that an individual is a member of a targeted group before the employer may claim the WOTC. As stated in Section II of this notice, § 51(d)(13)(A) of the Code provides that an individual is not treated as a member of a targeted group unless (i) on or before the day the individual begins work for the employer, the employer obtains certification from a DLA that the individual is a member of a targeted group; or (ii) on or before the day the individual is offered employment with the employer, a prescreening notice (IRS Form 8850) is completed and no later than 28 days after the individual begins work the employer submits the prescreening notice to the DLA for certification. An employer obtains certification of an individual’s targeted group status from a DLA by submitting both the IRS Form 8850 and an ETA Form 9061 or 9062 to the DLA. Employers are encouraged to submit both the IRS Forms 8850 and the ETA Forms 9061 or 9062 together in the same submission.

The PATH Act’s amendment and expansion of the targeted groups described in § 51(d)(1) of the Code to include long-term unemployment recipients will require changes to forms used by employers to request certification for qualified long-term unemployment recipients hired on or after January 1, 2016. For purposes of this notice, a qualified long-term unemployment recipient is any individual who on the day before the individual begins work for the employer, or, if earlier, the day the individual completes the IRS Form 8850 as a prescreening notice in accordance with the certification described in§ 51(d)(13)(A)(ii), is in a period of unemployment that is (i) not less than 27 consecutive weeks, and (ii) includes a period (which may be less than 27 weeks) in which the individual received unemployment compensation under State or Federal law.

The IRS Form 8850 and ETA Forms 9061 and 9062 are being modified consistent with the guidance in this notice so that they can be used to request certification by the DLAs for qualified long-term unemployment recipients. Those modified forms and instructions will indicate the information that must be provided on the forms for the employer to receive certification from the DLA that the individual is a qualified long-term unemployment recipient. The Treasury Department and the IRS anticipate that the modified forms will include a requirement that the individual signing the form attest that he or she meets the requirements to be a qualified long-term unemployment recipient and a requirement that the individual attest to the period(s) during which the individual was unemployed and the period the individual received unemployment compensation.

Because the PATH Act extended the WOTC retroactively for 2015 for members of targeted groups described in § 51(d)(1)(A) through (d)(1)(I) of the Code, and because the PATH Act created a new targeted group described in § 51(d)(1)(J) of the Code (qualified long-term unemployment recipients), employers need additional time to comply with the requirements of § 51(d)(13)(A)(ii) of the Code for those targeted groups. For these reasons, the Treasury Department and the IRS have determined that it is appropriate to provide employers with additional time to file IRS Form 8850 with the DLAs.

The principal author of this notice is R. Lisa Mojiri-Azad of the Office of Associate Chief Counsel (Tax Exempt and Government Entities). For further information regarding the WOTC, contact Ms. Mojiri-Azad at (202) 317-5500 (not a toll-free number).

The purpose of this Notice is to solicit comments regarding implementation of section 1101 of the Bipartisan Budget Act of 2015, Pub. L. No. 114–74 (“the BBA”), which was enacted into law on November 2, 2015. Section 1101 of the BBA repeals the current rules governing partnership audits and replaces them with a new centralized partnership audit regime that, in general, assesses and collects tax at the partnership level.

The repeal of the current partnership audit rules and implementation of the new partnership audit regime are generally effective for partnership taxable years beginning after December 31, 2017. See section 1101(g)(1) of the BBA. However, section 1101(g)(4) generally provides that a partnership may elect (at such time and in such form and manner as the Secretary may prescribe) for parts of the new regime to apply to partnership taxable years beginning after November 2, 2015 and before January 1, 2018.

The Department of the Treasury (“Treasury Department”) and the Internal Revenue Service (“IRS”) intend to issue guidance implementing the new partnership audit regime. Specifically, guidance describing procedures for making the election to have parts of the new regime apply to taxable years beginning after November 2, 2015 and before January 1, 2018 is expected to be published in the near future. Partnerships that wish to make this election should wait until that guidance is published to ensure the election complies with the requirements for making a valid election. The guidance will be effective for taxable years beginning after November 2, 2015 and before January 1, 2018.

Section 1101(a) of the BBA removes subchapter C of chapter 63 of the Internal Revenue Code (“the Code”) effective for partnership taxable years beginning after December 31, 2017. Subchapter C of chapter 63 contains the unified partnership audit and litigation rules that were enacted as part of the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97–248. These partnership audit and litigation rules are commonly referred to as the TEFRA partnership procedures.

Section 1101(b) of the BBA also removes subchapter D of chapter 63 and part IV of subchapter K of chapter 1 of the Code, rules applicable to electing large partnerships, effective for partnership taxable years beginning after December 31, 2017. Subchapter D contains the audit rules for electing large partnerships, and part IV of subchapter K prescribes the income tax treatment for such partnerships.

Section 1101(c) of the BBA replaces the rules to be removed by sections 1101(a) and (b) with a new partnership audit regime. Section 1101(c) adds a new subchapter C to chapter 63 of the Code, including amended Code sections 6221–6241. The BBA also makes related and conforming amendments to other provisions of the Code.

On December 18, 2015, President Obama signed into law the Protecting Americans from Tax Hikes Act of 2015, Pub. L. 114–113, div. Q (“PATH Act”). Section 411 of the PATH Act corrects and clarifies certain amendments made by the BBA. The amendments under the PATH Act are effective as if included in section 1101 of the BBA, and therefore, subject to the effective dates in section 1101(g) of the BBA.

Section 6221(a) as amended by the BBA provides that, in general, any adjustment to items of income, gain, loss, deduction, or credit of a partnership for a partnership taxable year (and any partner’s distributive share thereof) shall be determined, and any tax attributable thereto shall be assessed and collected, at the partnership level. The applicability of any penalty, addition to tax, or additional amount which relates to an adjustment to any such item or share shall also be determined at the partnership level. Section 6221(b) as amended by the BBA provides rules for partnerships that are required to furnish 100 or fewer Schedules K–1, Partner’s Share of Income, Deductions, Credits, etc. to elect out of this new regime. Generally, a partnership may elect out of the new regime only if each of its partners is an individual, corporation (including certain types of foreign entities), or estate. Special rules apply for purposes of determining the number of partners in the case of a partner that is an S corporation. Section 6221(b)(2)(C) provides that the Secretary by regulation or other guidance may prescribe rules for purposes of the 100-or-fewer-Schedule K-1 requirement similar to the rules for S corporations with respect to any partner that is not an individual, corporation, or estate.

Section 6222 as amended by the BBA provides rules generally requiring a partner’s return to be consistent with the partnership’s return.

Section 6223 as amended by the BBA sets forth the rules for designation of a partnership representative. Under this provision, a partnership representative must be a partner (or other person) with a substantial presence in the United States. If a designation is not in effect, the IRS may select any person as a partnership representative.

Section 6225 as amended by the BBA generally addresses partnership adjustments made by the IRS and the calculation of any resulting imputed underpayment. Section 6225(a) generally provides that the amount of any imputed underpayment resulting from an adjustment must be paid by the partnership. Section 6225(b) describes how an imputed underpayment is determined, and section 6225(c) describes modifications that, if approved by the IRS, may reduce the amount of an imputed underpayment. The PATH Act added to section 6225(c) a special rule addressing certain passive losses of publicly traded partnerships. Section 6233 provides rules for computation of interest and penalties on an imputed underpayment.

Section 6226 as amended by the BBA provides an exception to the general rule under section 6225(a)(1) that the partnership must pay the imputed underpayment. Under section 6226, the partnership may elect to have the reviewed year partners take into account the adjustments made by the IRS and pay any tax due as a result of those adjustments. In this case, the partnership is not required to pay the imputed underpayment. Section 6225(d)(1) defines the reviewed year to mean the partnership taxable year to which the item(s) being adjusted relates.

Under section 6227 as amended by the BBA, the partnership may request an administrative adjustment, which is taken into account in the year the administrative adjustment request is made. The partnership generally has three years from the date of filing the return to make an administrative adjustment request for that year, but may not make an administrative adjustment request for a partnership taxable year after the IRS has mailed the partnership a notice of an administrative proceeding with respect to the taxable year.

Section 6241(4) as amended by the BBA provides that no deduction is allowed under subtitle A for any payment required to be made by a partnership under the new partnership audit regime.

Section 6231 as amended by the BBA describes notices of proceedings and adjustments, including certain time frames for mailing the notices and the authority to rescind any notice of adjustment with the partnership’s consent. Section 6232(a) provides that any imputed underpayment is assessed and collected in the same manner as if it were a tax imposed for the adjustment year by subtitle A, except that in the case of an administrative adjustment request that reports an underpayment that the partnership elects to pay, the underpayment shall be paid when the request is filed.

Section 6234 as amended by the BBA generally provides that a partnership may seek judicial review of the adjustments within 90 days of the date the notice of final partnership adjustment is mailed. Section 6235 provides the period of limitations on making adjustments. Section 6241 provides definitions and special rules, including rules addressing bankruptcy and treatment when a partnership ceases to exist.

.01 The Treasury Department and the IRS intend to issue guidance to implement the new partnership audit regime under sections 6221–6241 of the Code, as amended by section 1101 of the BBA and section 411 of the PATH Act. To assist in the development of this guidance, this Notice requests public comments on issues that the guidance should address. In particular, the Treasury Department and the IRS request comments on the following issues:

(1) The election out of the new centralized partnership audit regime under section 6221(b) for partnerships that are required to furnish 100 or fewer Schedules K–1, including whether any type of partner, other than those types of partners specifically identified in section 6221(b)(1)(C), should be treated under rules similar to the special rules applicable to S corporations.

(2) Designation of the partnership representative under section 6223, including:

(3) The determination of the imputed underpayment under section 6225, including:

(4) Modification of the imputed underpayment under section 6225(c), including:

(5) How an adjustment made by the IRS under section 6225 that does not result in an imputed underpayment should be taken into account by the partnership.

(6) The election to use the alternative to payment of the imputed underpayment by the partnership under section 6226, including:

(7) How a partnership makes an administrative adjustment request (“AAR”) under section 6227 and the effect of such a request, including:

(8) The effect of adjustments on the basis of the partners in their partnership interests and the basis of the partnership in its assets.

(9) The rules for consistent filing of partner returns, including:

(10) The effect of bankruptcy and the treatment under the new partnership audit rules where a partnership ceases to exist.

(11) Procedural rules, including:

(12) Any other issues relevant to the implementation of the new partnership audit rules, including topics related to any of the above listed issues but not specifically identified in the list above, e.g., the interaction of these rules with international tax provisions.

.02 The new partnership audit rules are generally effective for tax years beginning after December 31, 2017. However, partnerships are permitted to elect to have parts of the new regime apply to tax years beginning after November 2, 2015 and before January 1, 2018. Given the scope of the guidance anticipated to be necessary to implement these rules, and the need to expedite the guidance process in light of the statutory effective dates, written comments in response to this Notice are requested by April 15, 2016.

.01 Comments responding to this Notice should be sent to:

Please include “Notice 2016–23” on the cover page.

.02 Submissions may be hand delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to:

.03 Submissions may also be sent electronically to the following e-mail address: Notice.Comments@irscounsel.treas.gov. Please include “Notice 2016–23” in the subject line.

All comments will be available for public inspection and copying.

The principal author of this notice is Joy E. Gerdy Zogby of the Office of Associate Chief Counsel (Procedure & Administration). For further information regarding this notice contact Joy E. Gerdy Zogby on (202) 317-6834 (not a toll-free number).

This notice advises State and local housing credit agencies that allocate low-income housing tax credits under § 42 of the Internal Revenue Code, and States and other issuers of tax-exempt private activity bonds under § 141, of the population figures to use in calculating: (1) the 2016 calendar year population-based component of the State housing credit ceiling (Credit Ceiling) under § 42(h)(3)(C)(ii); (2) the 2016 calendar year volume cap (Volume Cap) under § 146; and (3) the 2016 volume limit (Volume Limit) under § 142(k)(5).

Generally, § 146(j) requires determining the population figures for the population-based component of both the Credit Ceiling and the Volume Cap for any calendar year on the basis of the most recent census estimate of the resident population of a State (or issuing authority) released by the U.S. Census Bureau before the beginning of the calendar year. Similarly, § 142(k)(5) bases the Volume Limit on the State population.

Sections 42(h)(3)(H) and 146(d)(2) require adjusting for inflation the population-based component of the Credit Ceiling and the Volume Cap. The adjustments for the 2016 calendar year are in Rev. Proc. 2015–53, 2015–44 I.R.B. 615. Section 3.09 of Rev. Proc. 2015–53 provides that, for calendar year 2016, the amount for calculating the Credit Ceiling under § 42(h)(3)(C)(ii) is the greater of $2.35 multiplied by the State population, or $2,690,000. Further, section 3.20 of Rev. Proc. 2015–53 provides that the amount for calculating the Volume Cap under § 146(d)(1) for calendar year 2016 is the greater of $100 multiplied by the State population, or $302,875,000.

For the 50 states, the District of Columbia, and Puerto Rico, the population figures for calculating the Credit Ceiling, the Volume Cap, and the Volume Limit for the 2016 calendar year are the resident population estimates released electronically by the U.S. Census Bureau on December 22, 2015, and described in Press Release CB15–215. For American Samoa, Guam, the Northern Mariana Islands, and the U.S. Virgin Islands, the population figures for the 2016 calendar year are the 2015 midyear population figures in the U.S. Census Bureau’s International Data Base (IDB). The U.S. Census Bureau electronically announced an update of the IDB on July 9, 2015, in Press Release CB15–TPS.53.

For convenience, these figures are reprinted below.

The principal authors of this notice are James A. Holmes, Office of the Associate Chief Counsel (Passthroughs and Special Industries), and Timothy L. Jones, Office of the Associate Chief Counsel (Financial Institutions and Products). For further information regarding this notice, please contact Mr. Holmes at (202) 317-4137 (not a toll-free number).

This notice provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under § 417(e)(3), and the 24-month average segment rates under § 430(h)(2) of the Internal Revenue Code. In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under § 431(c)(6)(E)(ii)(I).

Generally, except for certain plans under sections 104 and 105 of the Pension Protection Act of 2006 and CSEC plans under § 414(y), § 430 of the Code specifies the minimum funding requirements that apply to single-employer plans pursuant to § 412. Section 430(h)(2) specifies the interest rates that must be used to determine a plan’s target normal cost and funding target. Under this provision, present value is generally determined using three 24-month average interest rates (“segment rates”), each of which applies to cash flows during specified periods. To the extent provided under § 430(h)(2)(C)(iv), these segment rates are adjusted by the applicable percentage of the 25-year average segment rates for the period ending September 30 of the year preceding the calendar year in which the plan year begins.^[1] However, an election may be made under § 430(h)(2)(D)(ii) to use the monthly yield curve in place of the segment rates.

Notice 2007–81, 2007–44 I.R.B. 899, provides guidelines for determining the monthly corporate bond yield curve, and the 24-month average corporate bond segment rates used to compute the target normal cost and the funding target. Consistent with the methodology specified in Notice 2007–81, the monthly corporate bond yield curve derived from February 2016 data is in Table I at the end of this notice. The spot first, second, and third segment rates for the month of February 2016 are, respectively, 1.71, 3.98, and 5.03.

The 24-month average segment rates determined under § 430(h)(2)(C)(i) through (iii) must be adjusted pursuant to § 430(h)(2)(C)(iv) to be within the applicable minimum and maximum percentages of the corresponding 25-year average segment rates. For plan years beginning before 2018, the applicable minimum percentage is 90% and the applicable maximum percentage is 110%. The 25-year average segment rates for plan years beginning in 2014, 2015, and 2016 were published in Notice 2013–58, 2013–40 I.R.B. 294, Notice 2014–50, 2014–40 I.R.B. 590, and Notice 2015–61, 2015–39 I.R.B. 408, respectively.

The three 24-month average corporate bond segment rates applicable for March 2016 without adjustment for the 25-year average segment rate limits are as follows:

Based on § 430(h)(2)(C)(iv), the 24-month averages applicable for March 2016 adjusted to be within the applicable minimum and maximum percentages of the corresponding 25-year average segment rates, are as follows:

Generally for plan years beginning after 2007, § 431 specifies the minimum funding requirements that apply to multiemployer plans pursuant to § 412. Section 431(c)(6)(B) specifies a minimum amount for the full-funding limitation described in § 431(c)(6)(A), based on the plan’s current liability. Section 431(c)(6)(E)(ii)(I) provides that the interest rate used to calculate current liability for this purpose must be no more than 5 percent above and no more than 10 percent below the weighted average of the rates of interest on 30-year Treasury securities during the four-year period ending on the last day before the beginning of the plan year. Notice 88–73, 1988–2 C.B. 383, provides guidelines for determining the weighted average interest rate. The rate of interest on 30-year Treasury securities for February 2016 is 2.62 percent. The Service determined this rate as the average of the daily determinations of yield on the 30-year Treasury bond maturing in November 2045 determined each day through February 10, 2016 and the yield on the 30-year Treasury bond maturing in February 2046 determined each day for the balance of the month. For plan years beginning in the month shown below, the weighted average of the rates of interest on 30-year Treasury securities and the permissible range of rate used to calculate current liability are as follows:

In general, the applicable interest rates under § 417(e)(3)(D) are segment rates computed without regard to a 24-month average. Notice 2007–81 provides guidelines for determining the minimum present value segment rates. Pursuant to that notice, the minimum present value segment rates determined for February 2016 are as follows:

The principal author of this notice is Tom Morgan of the Office of the Associate Chief Counsel (Tax Exempt and Government Entities). However, other personnel from the IRS participated in the development of this guidance. For further information regarding this notice, contact Mr. Morgan at 202-317-6700 or Tony Montanaro at 202-317-8698 (not toll-free numbers).

This revenue procedure describes procedures for taxpayers and other entities under the jurisdiction of the Large Business and International (LB&I), Small Business and Self Employed (SB/SE), and Tax Exempt and Government Entities (TE/GE) Operating Divisions to submit issues for consideration under the Internal Revenue Service’s Industry Issue Resolution (IIR) Program. The objective of the IIR Program is to identify and resolve frequently disputed or burdensome tax issues that are common to a significant number of entities. Resolving issues through pre-filing guidance rather than post-filing examination is a goal of the Internal Revenue Service (IRS) and the Office of Chief Counsel.

.01. In Notice 2000–65, 2000–2 C.B. 599, the IRS announced the Industry Issue Resolution Pilot Program. The objective of the pilot program was to establish a procedure to address through pre-filing guidance rather than post-filing examination frequently disputed tax issues that are common to a significant number of large or mid-size business taxpayers. After evaluating the success of the pilot program, the IRS announced in Notice 2002–20, 2002–1 C.B. 732, that the IIR Program would be made permanent. In addition, Notice 2002–20 expanded the IIR Program to address issues common to small businesses, as well as large and mid-size businesses, and to address opportunities to reduce burden for all business taxpayers.

.02. Revenue Procedure 2003–36, 2003–1 C.B. 859, superseded Notice 2002–20 and revised procedures for business taxpayers, industry associations, and other interested parties to allow issues to be submitted at any time for consideration under the IIR Program. Revenue Procedure 2003–36 limited IIR Program submissions to taxpayers under the jurisdiction of the LB&I (formerly Large and Mid-Size Business) and SB/SE Operating Divisions.

.03. This revenue procedure supersedes Revenue Procedure 2003–36, 2003–1 C.B. 859. It expands the availability of the IIR Program to issues with respect to entities under the jurisdiction of the TE/GE Operating Division, and updates, revises, and clarifies the procedures.

.01. A requester may submit an IIR Program request at any time during the calendar year.

.02. An IRS representative will notify the requester when the IRS decides to select or reject an IIR Program request.

.03. The IRS will make public, at least annually, all IIR Program requests received and those selected. The announcement will include the name of an IRS official to contact for information regarding the selected IIR Program requests.

Selected IIR Program requests may result in published guidance, such as a regulation, revenue ruling, revenue procedure, or notice. Alternatively, selected requests may result in new or revised administrative procedures such as an LB&I Operating Division directive or a revision to an Internal Revenue Manual provision. In some situations, the guidance may require taxpayers to file a request for a change in method of accounting before changing the manner in which they treat an issue.

This revenue procedure supersedes Rev. Proc. 2003–36.

This revenue procedure is effective April 25, 2016.

The collections of information contained in this revenue procedure have been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act (44 U.S.C. 3507) under control number 1545-1837.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number.

The collections of information in this revenue procedure are in Sections 6 and 7. This information is required to submit a request for the IRS to consider an issue under the IIR Program and to consider an issue that has been selected for resolution under the IIR Program. This information will be used to enable the IRS to determine whether the issue is suitable for resolution under the IIR Program and for resolution of selected issues. The collections of information are voluntary to obtain a benefit. The likely respondents are business or other for-profit institutions, exempt organizations, employee plans, and government entities.

The estimated total annual reporting burden is 2,000 hours.

The estimated annual burden per respondent varies from 4 hours to 200 hours, depending on individual circumstances, with an estimated average of 40 hours. The estimated number of respondents is 50.

The estimated annual frequency of responses is on occasion.

Books or records relating to a collection of information must be retained as long as the content may become material in the administration of any internal revenue law. Generally tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.

The principal author of this revenue procedure is Sarah McLemore of the Office of Associate Chief Counsel (Procedure and Administration). Ms. McLemore may be contacted at 202-317-6844 (not a toll free number). For information regarding the IIR Program, please contact the IIR Senior Program Analyst by email at IIR@IRS.GOV. Questions will be routed to the appropriate Operating Division for response.

Note. This revenue procedure will be reproduced as the next revision of IRS Publication 1223, General Rules and Specifications for Substitute Forms W–2c and W–3c.

The Internal Revenue Service has revoked its determination that the organizations listed below qualify as organizations described in sections 501(c)(3) and 170(c)(2) of the Internal Revenue Code of 1986.

Generally, the IRS will not disallow deductions for contributions made to a listed organization on or before the date of announcement in the Internal Revenue Bulletin that an organization no longer qualifies. However, the IRS is not precluded from disallowing a deduction for any contributions made after an organization ceases to qualify under section 170(c)(2) if the organization has not timely filed a suit for declaratory judgment under section 7428 and if the contributor (1) had knowledge of the revocation of the ruling or determination letter, (2) was aware that such revocation was imminent, or (3) was in part responsible for or was aware of the activities or omissions of the organization that brought about this revocation.

If on the other hand a suit for declaratory judgment has been timely filed, contributions from individuals and organizations described in section 170(c)(2) that are otherwise allowable will continue to be deductible. Protection under section 7428(c) would begin on March 28, 2016 and would end on the date the court first determines the organization is not described in section 170(c)(2) as more particularly set for in section 7428(c)(1). For individual contributors, the maximum deduction protected is $1,000, with a husband and wife treated as one contributor. This benefit is not extended to any individual, in whole or in part, for the acts or omissions of the organization that were the basis for revocation.