Interest rates; underpayments and overpayments. The rates for interest determined under section 6621 of the Code for the calendar quarter beginning January 1, 2011, will be 3 percent for overpayments (2 percent in the case of a corporation), 3 percent for underpayments, and 5 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 will be 0.5 percent.

This notice provides transitional relief for determining the timeliness of federal tax deposits (FTDs) under section 6302 of the Code.

This notice primarily addresses the application of section 909 of the Code to foreign income taxes paid or accrued in taxable years of a section 902 corporation beginning on or before December 31, 2010. It includes an exclusive list of arrangements that will be treated as foreign tax credit splitting events for those taxable years.

The Internal Revenue Service announces the release of Form 8944, Preparer e-file Hardship Waiver Request, which tax return preparers who meet the definition of a specified tax return preparer and who believe they may qualify for an undue hardship waiver may begin to use to voluntarily submit an undue hardship waiver request to the IRS now. Preparers must use Form 8944 to voluntarily request a waiver. This announcement also informs tax return preparers of the time limits for submitting waiver requests for 2011, and that approval of any waiver request is contingent upon and will not occur prior to the publication of final regulations and a final revenue procedure, which is expected in early 2011.

This notice contains the 2010 Cumulative List of Changes in Plan Qualification Requirements (2010 Cumulative List) described in section 4 of Rev. Proc. 2007-44, 2007-2 C.B. 54. The 2010 Cumulative List is to be used by plan sponsors and practitioners submitting determination, opinion, or advisory letter applications for plans during the period beginning February 1, 2011, and ending January 31, 2012.

Weighted average interest rate update; corporate bond indices; 30-year Treasury securities; segment rates. This notice contains updates for the corporate bond weighted average interest rate for plan years beginning in December 2010; the 24-month average segment rates; the funding transitional segment rates applicable for December 2010; and the minimum present value transitional rates for November 2010.

This document describes the procedure by which the plan sponsor of a multiemployer pension plan may request and obtain approval of an extension of an amortization period in accordance with section 431(d) of the Code. Rev. Proc. 2008-67 superseded. Rev. Proc. 2010-4 modified.

This notice provides transitional relief for determining the timeliness of federal tax deposits (FTDs) under section 6302 of the Code.

The IRS has revoked its determination that the Armenian Relief Society of Richmond, TX; the Mexican American Research Center, Inc., of Austin, TX; and Panhandle Land Conservancy, Inc., of Destin, FL, qualify as organizations described in sections 501(c)(3) and 170(c)(2) of the Code.

This notice provides transitional relief for determining the timeliness of federal tax deposits (FTDs) under section 6302 of the Code.

This notice provides transitional relief for determining the timeliness of federal tax deposits (FTDs) under section 6302 of the Code.

This notice provides transitional relief for determining the timeliness of federal tax deposits (FTDs) under section 6302 of the Code.

This notice requests public comments on issues to be addressed in guidance implementing the new excise tax on medical devices imposed by section 4191 of the Code. Section 4191 was added by section 1405 of the Health Care and Education Reconciliation Act of 2010 (the Act), in conjunction with the Patient Protection and Affordable Care Act. The new excise tax applies to sales of taxable medical devices after December 31, 2012.

This notice provides guidance on the application of section 3402(t) of the Code to payments made by credit, debit, stored value, and other payment cards.

This notice delays the effective date for compliance with Revenue Ruling 2006-57, 2006-2 C.B. 911, which provides guidance on the use of smartcards, debit or credit cards, or other electronic media to provide qualified transportation fringes under section 132(f) of the Code, until January 1, 2012.

This document contains a correction to final regulations (T.D. 9340, 2007-2 C.B. 487) providing updated guidance on section 403(b) contracts of public schools and tax-exempt organizations described in section 501(c)((3). These regulations will affect sponsors of section 403(b) contracts, administrators, participants, and beneficiaries.

The Internal Revenue Service announces the release of Form 8944, Preparer e-file Hardship Waiver Request, which tax return preparers who meet the definition of a specified tax return preparer and who believe they may qualify for an undue hardship waiver may begin to use to voluntarily submit an undue hardship waiver request to the IRS now. Preparers must use Form 8944 to voluntarily request a waiver. This announcement also informs tax return preparers of the time limits for submitting waiver requests for 2011, and that approval of any waiver request is contingent upon and will not occur prior to the publication of final regulations and a final revenue procedure, which is expected in early 2011.

It is the policy of the Internal Revenue Service to announce at an early date whether it will follow the holdings in certain cases. An Action on Decision is the document making such an announcement. An Action on Decision will be issued at the discretion of the Service only on unappealed issues decided adverse to the government. Generally, an Action on Decision is issued where its guidance would be helpful to Service personnel working with the same or similar issues. Unlike a Treasury Regulation or a Revenue Ruling, an Action on Decision is not an affirmative statement of Service position. It is not intended to serve as public guidance and may not be cited as precedent.

Actions on Decisions shall be relied upon within the Service only as conclusions applying the law to the facts in the particular case at the time the Action on Decision was issued. Caution should be exercised in extending the recommendation of the Action on Decision to similar cases where the facts are different. Moreover, the recommendation in the Action on Decision may be superseded by new legislation, regulations, rulings, cases, or Actions on Decisions.

Prior to 1991, the Service published acquiescence or nonacquiescence only in certain regular Tax Court opinions. The Service has expanded its acquiescence program to include other civil tax cases where guidance is determined to be helpful. Accordingly, the Service now may acquiesce or nonacquiesce in the holdings of memorandum Tax Court opinions, as well as those of the United States District Courts, Claims Court, and Circuit Courts of Appeal. Regardless of the court deciding the case, the recommendation of any Action on Decision will be published in the Internal Revenue Bulletin.

The recommendation in every Action on Decision will be summarized as acquiescence, acquiescence in result only, or nonacquiescence. Both “acquiescence” and “acquiescence in result only” mean that the Service accepts the holding of the court in a case and that the Service will follow it in disposing of cases with the same controlling facts. However, “acquiescence” indicates neither approval nor disapproval of the reasons assigned by the court for its conclusions; whereas, “acquiescence in result only” indicates disagreement or concern with some or all of those reasons. “Nonacquiescence” signifies that, although no further review was sought, the Service does not agree with the holding of the court and, generally, will not follow the decision in disposing of cases involving other taxpayers. In reference to an opinion of a circuit court of appeals, a “nonacquiescence” indicates that the Service will not follow the holding on a nationwide basis. However, the Service will recognize the precedential impact of the opinion on cases arising within the venue of the deciding circuit.

The Actions on Decisions published in the weekly Internal Revenue Bulletin are consolidated semiannually and appear in the first Bulletin for July and the Cumulative Bulletin for the first half of the year. A semiannual consolidation also appears in the first Bulletin for the following January and in the Cumulative Bulletin for the last half of the year.

The Commissioner acquiescence in result only in the following decision:

Jerome R. Vainisi and Deloris L. Vainisi v. Commissioner^[1]

599 F. 3d 567 (7th Cir. 2010),
rev'g 132 T.C. No. 1 (2009)

Section 6621 of the Internal Revenue Code establishes the rates for interest on tax overpayments and tax underpayments. Under section 6621(a)(1), the overpayment rate is the sum of the federal short-term rate plus 3 percentage points (2 percentage points in the case of a corporation), except the rate for the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the sum of the federal short-term rate plus 0.5 of a percentage point. Under section 6621(a)(2), the underpayment rate is the sum of the federal short-term rate plus 3 percentage points.

Section 6621(c) provides that for purposes of interest payable under section 6601 on any large corporate underpayment, the underpayment rate under section 6621(a)(2) is determined by substituting “5 percentage points” for “3 percentage points.” See section 6621(c) and section 301.6621-3 of the Regulations on Procedure and Administration for the definition of a large corporate underpayment and for the rules for determining the applicable date. Section 6621(c) and section 301.6621-3 are generally effective for periods after December 31, 1990.

Section 6621(b)(1) provides that the Secretary will determine the federal short-term rate for the first month in each calendar quarter. Section 6621(b)(2)(A) provides that the federal short-term rate determined under section 6621(b)(1) for any month applies during the first calendar quarter beginning after that month. Section 6621(b)(2)(B) provides that in determining the addition to tax under section 6654 for failure to pay estimated tax for any taxable year, the federal short-term rate that applies during the third month following the taxable year also applies during the first 15 days of the fourth month following the taxable year. Section 6621(b)(3) provides that the federal short-term rate for any month is the federal short-term rate determined during that month by the Secretary in accordance with section 1274(d), rounded to the nearest full percent (or, if a multiple of 1/2 of 1 percent, the rate is increased to the next highest full percent).

Notice 88-59, 1988-1 C.B. 546, announced that, in determining the quarterly interest rates to be used for overpayments and underpayments of tax under section 6621, the Internal Revenue Service will use the federal short-term rate based on daily compounding because that rate is most consistent with section 6621 which, pursuant to section 6622, is subject to daily compounding.

The federal short-term rate determined in accordance with section 1274(d) during October 2010 is the rate published in Revenue Ruling 2010-26, 2010-44 I.R.B. 573, to take effect beginning November 1, 2010. The federal short-term rate, rounded to the nearest full percent, based on daily compounding determined during the month of October 2010 is 0 percent. Accordingly, an overpayment rate of 3 percent (2 percent in the case of a corporation) and an underpayment rate of 3 percent are established for the calendar quarter beginning January 1, 2011. The overpayment rate for the portion of a corporate overpayment exceeding $10,000 for the calendar quarter beginning January 1, 2011, is 0.5 percent. The underpayment rate for large corporate underpayments for the calendar quarter beginning January 1, 2011, is 5 percent. These rates apply to amounts bearing interest during that calendar quarter.

Under section 6621(b)(2)(B), the 3 percent rate also applies to estimated tax underpayments for the first calendar quarter in 2011 and for the first 15 days in April 2011.

Interest factors for daily compound interest for an annual rate of 0.5 percent are published in Appendix A of this Revenue Ruling. Interest factors for daily compound interest for annual rates of 2 percent, 3 percent, and 5 percent are published in Tables 7, 9, 11, and 15 of Rev. Proc. 95-17, 1995-1 C.B. 561, 563, 565, and 569.

Annual interest rates to be compounded daily pursuant to section 6622 that apply for prior periods are set forth in the tables accompanying this revenue ruling.

The principal author of this revenue ruling is Deborah Colbert-James of the Office of Associate Chief Counsel (Procedure & Administration). For further information regarding this revenue ruling, contact Ms. Colbert-James at (202) 622-8143 (not a toll-free call).

This notice provides transitional relief for determining the timeliness of Federal tax deposits (FTDs) under section 6302 of the Internal Revenue Code (“Code”). The notice provides that the Internal Revenue Service (“Service”) will not assert penalties under Code section 6656 for FTDs due in calendar year 2011 that are untimely solely because the depositor treated a statewide legal holiday as if it were a legal holiday in the District of Columbia.

Effective January 1, 2011, the Financial Management Service, a Bureau of the Treasury Department, is eliminating the system that allows FTDs to be made using paper coupons at government depositary banks. On August 23, 2010, the Treasury Department and the Service published a notice of proposed rulemaking (REG-153340-09, 2010-42 I.R.B. 469 (74 FR 51707)), to require electronic funds transfer for all FTDs and to eliminate the rules regarding FTD coupons. Since a taxpayer will no longer be able to make FTDs at a government depositary bank, the proposed regulations removed references to “banking days” and instead determined the timeliness of deposits by reference to “business days,” meaning every calendar day that is not a Saturday, Sunday, or legal holiday under section 7503. These changes were adopted in the final regulations published on December 7, 2010. T.D. 9507.

Consistent with section 7503, the term “legal holiday” for FTD purposes includes only those legal holidays in the District of Columbia. Thus, a statewide legal holiday will no longer be considered a legal holiday unless the holiday coincides with a legal holiday in the District of Columbia. See Treas. Reg. §§ 31.6302-1(c)(2)(iii) and (d) Example 5.

Code section 6656 imposes a penalty if a taxpayer does not deposit tax in the correct amount, within the prescribed time period, and/or in the required manner. In order to provide transitional relief, the Service will not assert penalties under section 6656 for FTDs due during calendar year 2011 that are untimely solely because the depositor treated a statewide legal holiday as if it were a legal holiday in the District of Columbia.

The principal author of this notice is Michael Hara of the Office of Associate Chief Counsel (Procedure & Administration). For further information regarding this notice, please contact Michael Hara at (202) 622-4910 (not a toll-free call).

This notice invites public comments regarding issues that should be addressed in guidance implementing the new excise tax on medical devices imposed by section 4191 of the Internal Revenue Code (Code). Section 4191 was added by section 1405 of the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029, 1064-1065 (the Act), in conjunction with the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119. The new excise tax applies to sales of taxable medical devices after December 31, 2012.

Under Chapter 32 (Manufacturers Excise Taxes) of Subtitle D of the Code, excise taxes are imposed on the sales of certain products by the manufacturer, producer, or importer. The Act amended Chapter 32 to add section 4191, which imposes an excise tax on the sale of any “taxable medical device” by the manufacturer, producer, or importer of the device in an amount equal to 2.3 percent of the sale price.

Section 4191(b)(1) provides that, in general, a “taxable medical device” is any device, as defined in section 201(h) of the Federal Food, Drug, & Cosmetic Act (FFDCA), that is intended for humans. Section 201(h) of the FFDCA defines “device” as an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part, or accessory, which is (1) recognized in the official National Formulary, or the United States Pharmacopeia, or any supplement to them, (2) intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, or (3) intended to affect the structure or any function of the body, and which does not achieve its primary intended purposes through chemical action within or on the body and which is not dependent upon being metabolized for the achievement of its primary intended purposes.

Section 4191(b)(2) provides that the term “taxable medical device” does not include eyeglasses, contact lenses, hearing aids, or “any other medical device determined by the Secretary to be of a type which is generally purchased by the general public at retail for individual use.”

Section 4221 exempts certain sales from tax imposed under Chapter 32. The Act amended section 4221 to limit the exemptions for taxable medical device sales to sales by the manufacturer, producer, or importer (1) for use by the purchaser for further manufacture, or for resale by the purchaser to a second purchaser for use by such second purchaser in further manufacture; or (2) for export, or for resale by the purchaser to a second purchaser for export.

The Internal Revenue Service and Treasury Department request comments on issues that should be addressed in guidance implementing the excise tax on medical devices. Comments are specifically requested on the exemption in section 4191(b)(2)(D) for any medical device “determined by the Secretary to be of a type which is generally purchased by the general public at retail for individual use.” In addition, comments are requested on issues pertaining to the application of existing Chapter 32 rules to section 4191. Comments must be submitted by March 28, 2011. Comments, identified by Notice 2010-89 may be sent by one of the following methods:

All submissions will be available for public inspection and copying in room 1621, 1111 Constitution Avenue, NW, Washington, DC, from 9 a.m. to 4 p.m.

The principal author of this notice is Natalie A. Payne of the Office of Associate Chief Counsel (Passthroughs & Special Industries Division). For further information regarding this notice, please contact Ms. Payne or Stephanie Bland at (202) 622-3130 (not a toll-free call).

This notice contains the 2010 Cumulative List of Changes in Plan Qualification Requirements (2010 Cumulative List) described in section 4 of Rev. Proc. 2007-44, 2007-2 C.B. 54. The 2010 Cumulative List is to be used by plan sponsors and practitioners submitting determination, opinion, or advisory letter applications for plans during the period beginning February 1, 2011 and ending January 31, 2012. These plans will primarily be (1) single employer individually designed defined contribution plans, including employee stock ownership plans (ESOPs), and single employer individually designed defined benefit plans that are in Cycle A and (2) defined contribution pre-approved plans (that is, defined contribution plans that are master and prototype (M&P) or volume submitter (VS) plans) for the second submission under the remedial amendment cycle under Rev. Proc. 2007-44. Generally, an individually designed plan is in Cycle A if the last digit of the employer identification number of the plan sponsor is 1 or 6.

The list of changes in section IV of this notice does not extend the deadline by which a plan must be amended to comply with any statutory, regulatory, or guidance changes. The general deadline for timely adoption of an interim or discretionary amendment can be found in section 5.05 of Rev. Proc. 2007-44.

Rev. Proc. 2007-44 sets forth procedures for issuing opinion, advisory, and determination letters and describes the five-year remedial amendment cycle for individually designed plans and the six-year remedial amendment cycle for pre-approved plans. In addition, section 5.05 of Rev. Proc. 2007-44 provides the deadline for timely adoption of an interim amendment or discretionary amendment.

Under section 4 of Rev. Proc. 2007-44, the Internal Revenue Service announces its intention to annually publish a Cumulative List to identify statutory, regulatory, and guidance changes that must be taken into account in submissions by plan sponsors to the Service for opinion, advisory, and determination letters whose submission period begins on February 1st following issuance of the Cumulative List.

In Notice 2009-98, 2009-2 C.B. 974, the Service published the 2009 Cumulative List of Changes in Plan Qualification Requirements (2009 Cumulative List).^[2]

This notice is being issued in conjunction with the determination letter program for individually designed plans eligible for Cycle A and the opinion and advisory letter programs for M&P and VS defined contribution pre-approved plans. In accordance with Rev. Proc. 2007-44, the Service will start accepting determination letter applications for Cycle A individually designed plans beginning on February 1, 2011. The 12-month submission period for Cycle A plans will end January 31, 2012. In addition, the Service will start accepting opinion and advisory letter applications for defined contribution pre-approved plans beginning on February 1, 2011. The 12-month submission period for non-mass submitter sponsors and practitioners, word-for-word identical adopters, and M&P minor modifier placeholder applications will end January 31, 2012. The 9-month submission period for mass submitters and national sponsors will end October 31, 2011, as provided in section 18.02(1) of Rev. Proc. 2007-44.

The 2010 Cumulative List, set forth in section IV of this notice, informs plan sponsors of issues the Service has specifically identified for review in determining whether a plan filing in Cycle A has been properly updated. Specifically, the 2010 Cumulative List reflects law changes under the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), Pub. L. 107-16 (with technical corrections made by the Job Creation and Worker Assistance Act of 2002 (JCWAA), Pub. L. 107-147), the Pension Funding Equity Act of 2004 (PFEA), Pub. L. 108-218, the Pension Protection Act of 2006 (PPA ’06), Pub. L. 109-280, the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007, Pub. L. 110-28, the Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART Act), Pub. L. 110-245, the Worker, Retiree, and Employer Recovery Act of 2008 (WRERA), Pub. L. 110-458, and the Small Business Jobs Act of 2010 (SBJA), Pub. L. 111-240.

The HEART Act provisions formerly appeared separately from the Cumulative List of Changes in Plan Qualification Requirements section of the 2008 and 2009 Cumulative Lists. The HEART Act provisions are now included in the Cumulative List of Changes in Plan Qualification Requirements (which is section IV of this notice) and are identified as “New.”

Section 201 of WRERA formerly appeared separately from the Cumulative List of Changes in Plan Qualification Requirements section of the 2009 Cumulative List. Section 201 is now included in the Cumulative List of Changes in Plan Qualification Requirements (which is section IV of this notice) and is identified as “New.”

If a plan, submitted between February 1, 2011 and January 31, 2012, is amended to reflect section 201 of WRERA, the Service will consider section 201 in issuing the determination letter, opinion, or advisory letter. If a noncalendar year plan, which does not have to adopt the WRERA section 201 amendment until after January 31, 2012, is submitted between February 1, 2011 and January 31, 2012 without being amended for section 201, then the Service will consider section 201, if applicable, during the next Cycle A or 6-year remedial amendment cycle submission period.

The Service will no longer include hurricane or disaster relief provisions, which formerly appeared in the Cumulative List of Changes in Plan Qualification Requirements. Although no longer listed in this notice, hurricane and other disaster relief provisions continue to apply, if applicable, to individual plans. For information regarding tax relief provisions for taxpayers affected by disaster relief situations go to http://www.irs.gov/newsroom/ article/0,,id=108362,00.html.

Except as provided below, the Service will not consider in its review of any determination, opinion, or advisory letter application, for the submission period that begins February 1, 2011, any:

(1) guidance issued after October 1, 2010;

(2) statutes enacted after October 1, 2010;

(3) qualification requirements first effective in 2012 or later; or

(4) statutory provisions that are first effective in 2011, for which there is no guidance identified in this notice.^[3]

However, in order to be qualified, a plan must comply with all relevant qualification requirements, not just those on the 2010 Cumulative List.

The 2010 Cumulative List includes the following guidance issued after October 1, 2010:

The Service will not consider § 414(x) (item 30 in section IV of this notice) in issuing opinion and advisory letters for pre-approved plans at this time.

With respect to matters addressed by proposed regulations identified in the footnotes of section IV of this notice, the Service’s review of the plan will be based on a reasonable interpretation of the statute, existing final regulations, or other published guidance. For this purpose, compliance with proposed regulations will be treated as meeting that standard. However, a determination, opinion, or advisory letter cannot be relied on with respect to whether the plan complies with the proposed regulations.

Terminating plans must include all law changes in effect at the time of termination. See section 8 of Rev. Proc. 2007-44 regarding plan termination.

The following list consists of statutory provisions and associated guidance which reflect changes to plan qualification requirements. Miscellaneous guidance is also provided. The Service has identified below plan qualification requirements which were not on the 2009 or earlier Cumulative Lists as “(New).”

All items from the 2004 Cumulative List have been deleted from the 2010 Cumulative List. In addition, items from the 2005 Cumulative List that apply solely to defined benefit plans or ESOPs have been deleted from the 2010 Cumulative List. Thus, the 2010 Cumulative List contains those plan qualification requirements listed in the 2005 Cumulative List that are applicable to defined contribution pre-approved plans, the plan qualification requirements listed in the 2006, 2007, 2008, and 2009 Cumulative Lists, as well as additional 2010 plan qualification requirements. These deletions have been made to enhance the utility of the cumulative list, by removing items that would have been previously reviewed in the case of a plan that was submitted during the initial Cycle A submission period (February 1, 2006 — January 31, 2007). However, if a plan has not been previously reviewed for items on earlier cumulative lists, it must still take those items into account. For example, a new plan that was established after the Cycle A submission period would be reviewed for items on the 2004 Cumulative List. Similarly, defined contribution pre-approved plans have not yet been reviewed for items on the 2005 Cumulative List and those items have been retained in this notice in order to facilitate review of those plans.

1. 401(a):

2. 401(a)(4):

3. 401(a)(5): Section 401(a)(5)(G) of the Code was amended by PPA ’06 § 861(a)(1) with respect to governmental plans. (2008 C. L.).

4. 401(a)(9):

5. 401(a)(26): Section 401(a)(26)(G) of the Code was amended by PPA ’06 § 861(a)(1) with respect to governmental plans. (2008 C. L.).

6. 401(a)(35): PPA ’06 § 901(a)(1) added § 401(a)(35) requiring that defined contribution plans provide employees with the freedom to divest publicly traded employer securities. (2008 C. L.).

7. 401(a)(36): PPA ’06 § 905(b) added § 401(a)(36) regarding distributions to a participant who has attained age 62 and who has not separated from employment at the time of the distribution. (2008 C. L.).

8. 401(a)(37): Section 104(a) of the HEART Act added Code § 401(a)(37) with respect to benefits payable on the death of a plan participant while performing qualified military service. (New).

9. 401(k) & 401(m) ^[4]:

10. 402(c)(2)(A): PPA ’06 § 822(a) amended § 402(c)(2)(A) to permit nontaxable distributions from a qualified plan to be directly rolled over tax-free to either another qualified plan or a § 403(b) plan if the separate accounting requirements are met. (2008 C. L.).

11. 402(c)(11): PPA ’06 § 829(a)(1) added § 402(c)(11) to allow nonspouse beneficiaries to directly roll over distributions from a qualified plan to an individual retirement plan. (2008 C. L.).

12. 402(f): PPA ’06 § 1102(a) provides that notice required to be provided under § 402(f) may be provided as much as 180 days before the annuity starting date.^[5] (2008 C. L.).

13. 402(g)(2): WRERA § 109(b)(3) amended § 402(g)(2)(A)(ii) to eliminate the distribution of gap period earnings with excess deferrals. (2009 C. L.).

14. 402A:

15. 408A(e): PPA ‘06 § 824 added § 408A(e) which permits rollovers to Roth IRAs from accounts that are not designated Roth accounts that are part of qualified plans, § 403(b) plans, and § 457 plans. (2008 C. L.).

16. 409:

17. 410(b): Final Regulations were published on July 21, 2006 (71 Fed. Reg. 41357) permitting some employees of tax-exempt organizations to be excluded when determining whether a § 401(k) plan meets the § 410(b) minimum coverage requirements. (2006 C. L.).

18. 411(a):

19. 411(a)(11):

20. 411(a)(13): PPA ’06 § 701(b)(2) added § 411(a)(13) with respect to special vesting rules for applicable defined benefit plans, such as cash balance plans. (2008 C. L.).

21. 411(b)(1) ^[8]:

22. 411(b)(5): PPA ’06 § 701(b)(1) added § 411(b)(5) with respect to applicable defined benefit plans, such as cash balance plans, and special rules relating to age. (2008 C. L.).

23. 411(d)(3):

24. 411(d)(6):

25. 412:

26. 414(d): PPA ’06 § 906(a)(1) added language to the definition of governmental plan in § 414(d) with respect to Indian tribal governments. (2008 C. L.).

27. 414(f)(6): PPA ’06 § 1106(b) added § 414(f)(6) with respect to a multiemployer status election. Section 6611(a)(2) and (b)(2) of the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 amends § 414(f)(6). (2008 C. L.).

28. 414(u):

29. 414(w): PPA ’06 § 902(d)(1) added § 414(w) with respect to eligible automatic contribution arrangements. (2008 C. L.).

30. 414(x): PPA ’06 § 903(a) added § 414(x) with respect to special rules for eligible combined plans that consist of a defined benefit plan and a qualified cash or deferred arrangement. (New).

31. 415:

32. 416:

33. 417:

34. 420:

35. 432: PPA ’06 § 212(a) added § 432 which requires that a funding improvement plan or a rehabilitation plan be adopted for multiemployer plans in endangered or critical status and provides for certain benefit reductions.^[11] (2008 C. L.).

36. Miscellaneous:

The following guidance contains sample or model amendments: Notice 2006-44, 2006-1 C.B. 889 (Roth § 401(k) plans); Notice 2009-65, 2009-39 I.R.B. 413 (automatic contribution features); and Notice 2009-82, 2009-41 I.R.B. 491 (suspension of the minimum distribution requirement for 2009).

The principal author of this notice is Angelique Carrington of the Employee Plans, Tax Exempt and Government Entities Division. For further information regarding this notice, please contact the Employee Plans taxpayer assistance answering service at 1-877-829-5500 (a toll-free number) or e-mail Ms. Carrington at RetirementPlanQuestions@irs.gov.

This notice provides interim guidance on the application of § 3402(t) of the Internal Revenue Code to payments made by credit, debit, stored value, and other payment cards. Commenters on the proposed regulations (REG-158747-06, 2009-4 I.R.B. 362 [73 FR 74082 (Dec. 5, 2008)]) raised significant implementation concerns regarding the contracting, processing, and systems changes necessary to apply § 3402(t) withholding and related reporting to payment card transactions. The Treasury Department and the IRS anticipate that the final regulations will reserve for future guidance the issue of applying § 3402(t) to payment card transactions. Consistent with this anticipated reservation of the issue, this notice provides that the withholding requirements under § 3402(t) and the related reporting requirements will not apply to payments made by payment card until further guidance is issued; and will not apply for any calendar year beginning earlier than at least 18 months from the date such guidance is finalized (and thus will not apply for the 2012 calendar year). Finally, this notice requests comments on all aspects of the potential application of § 3402(t) to payment card transactions, and in particular on approaches that will help implement these requirements.

Section 3402(t) was added by § 511 of the Tax Increase Prevention and Reconciliation Act of 2005, Pub. L. No. 109-222, 120 Stat. 345 (TIPRA), which was enacted on May 17, 2006. Section 3402(t)(1) provides that the Government of the United States, every State, every political subdivision thereof, and every instrumentality of the foregoing (including multi-State agencies) making any payment to any person providing any property or services (including any payment made in connection with a government voucher or certificate program which functions as a payment for property or services) shall deduct and withhold from such payment a tax in an amount equal to 3% of such payment. There are many exceptions to the § 3402(t) withholding requirements, including the exception provided by § 3402(t)(2)(G) for payment made by a political subdivision of a State (or an instrumentality of a political subdivision of a State) which makes less than $100,000,000 of payments for property or services annually (other than payments otherwise exempt from § 3402(t) withholding, such as payroll payments). TIPRA originally provided that § 3402(t) applies to payments made after December 31, 2010.

Notice 2008-38, 2008-1 C.B. 683, published on March 31, 2008, invited public comments on guidance under § 3402(t). Notice 2008-38 requested specific comments on the application of § 3402(t) to payment cards. Proposed regulations under §§ 3402(t), 3406, 6011, 6051, 6071, and 6302 were published on December 5, 2008 (REG-158747-06, 2009-4 I.R.B. 362 [73 FR 74082]). Subsequently, § 1511 of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, 123 Stat. 115, amended the effective date of § 3402(t) withholding, so that it applies only to payments made after December 31, 2011. The Treasury Department and the IRS are currently developing final regulations under § 3402(t).

On July 30, 2008, following the enactment of § 3402(t), § 6050W was enacted as part of the Housing Assistance Tax Act of 2008, Div. C of the Housing and Economic Recovery Act of 2008, Pub. L. No. 110-289, 122 Stat. 2654. Section 6050W requires merchant acquiring entities that make payment to merchants and other participating payees in settlement of reportable payment card transactions to report the gross amount of these transactions for each payee for each calendar year. This reporting requirement applies to payment card transactions for calendar years beginning after December 31, 2010. Final regulations under § 6050W were published on August 16, 2010 (T.D. 9496, 2010-43 I.R.B. 484 [75 FR 49821]).

Under proposed § 31.3402(t)-3(e), payments subject to withholding under § 3402(t) include payments made by payment card. Numerous commenters indicated that applying § 3402(t) withholding and related reporting requirements to payment card transactions would be difficult to administer and noted that these transactions will already be reported under § 6050W. This notice responds to the concerns raised and the need for taxpayers to begin the implementation process to comply with the requirements of § 3402(t).

The withholding requirements of § 3402(t) and the related reporting requirements will not apply to any payment made by payment card for any calendar year beginning earlier than at least 18 months from the date further guidance is finalized for § 3402(t) withholding on payments by payment card (and thus will not apply for the 2012 calendar year).

This guidance does not apply to any payment made using a convenience check. Convenience checks are accepted and processed through the banking system in the same manner as traditional checks.

For purposes of this notice, the following definitions apply:

(1) Payment card transaction means any transaction in which a payment card, or any account number or other indicia associated with a payment card, is accepted as payment;

(2) Payment card means any card, including any stored value card, issued pursuant to an agreement or arrangement that provides for—

(A) One or more issuers of such cards;

(B) A network of persons unrelated to each other, and to the issuer, who agree to accept such cards as payment; and

(C) Standards and mechanisms for settling the transactions between the merchant acquiring entities and the persons who agree to accept the cards as payment;

(3) Stored value card means any card with a prepaid value, including any gift card;

(4) Convenience check means a check issued in connection with a payment card account;

(5) Merchant acquiring entity means the bank or other organization that has the contractual obligation to make payment to participating payees in settlement of payment card transactions; and

(6) Participating payee means a person who agrees to accept payment cards as payment.

Comments are requested on all aspects of the potential application of the withholding requirements under § 3402(t) and the related reporting requirements to payment card transactions. Comments must be submitted by March 28, 2011. All materials submitted will be available for public inspection and copying. Comments should be submitted to Internal Revenue Service, CC:PA:LPD:RU (Notice 2010-91), Room 5203, PO Box 7604, Ben Franklin Station, Washington, DC 20224. Submissions may also be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to the Courier’s Desk, 1111 Constitution Avenue, NW, Washington, DC 20224, Attn: CC:PA:LPD:RU (Notice 2010-91), Room 5203. Submissions may also be sent electronically via the internet to the following email address: Notice.comments@irscounsel.treas.gov. Include the notice number (Notice 2010-91) in the subject line.

The principal author of this notice is A. G. Kelley of the Office of Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities) though other Treasury Department and IRS officials participated in its development. For further information on the submission of comments or the comments submitted, please contact Richard Hurst at (202) 622-7180 (not a toll-free number). For further information on all other provisions of this notice, please contact A. G. Kelley at (202) 622-6040 (not a toll-free number).

This notice provides guidance concerning section 909 of the Internal Revenue Code (“Code”). The Treasury Department and Internal Revenue Service (“IRS”) anticipate that this will be the first of several items of published guidance concerning section 909. This notice primarily addresses the application of section 909 to foreign income taxes paid or accrued by a section 902 corporation in taxable years beginning on or before December 31, 2010 (“pre-2011 taxable years”). The Treasury Department and IRS expect to issue regulations that incorporate the guidance described in this notice.

Section 2 of this notice provides background information with respect to section 909. Section 3 provides rules for determining whether foreign income taxes paid or accrued by a section 902 corporation in pre-2011 taxable years (“pre-2011 taxes”) are suspended under section 909 in taxable years beginning after December 31, 2010 (“post-2010 taxable years”) of a section 902 corporation. Section 4 identifies an exclusive list of arrangements that will be treated as giving rise to foreign tax credit splitting events in pre-2011 taxable years (“pre-2011 splitter arrangements”) and provides guidance on determining the amount of related income and pre-2011 taxes paid or accrued with respect to pre-2011 splitter arrangements. Section 5 provides guidance concerning the application of section 909 to partnerships and trusts. Section 6 discusses the interaction between section 909 and other Code provisions. Section 7 provides the effective date of the regulations described in this notice. Section 8 solicits comments and provides contact information.

Unless otherwise provided, the guidance described in this notice applies only to pre-2011 taxes and does not apply to foreign income taxes paid or accrued in post-2010 taxable years. Future guidance will address the application of section 909 to foreign income taxes paid or accrued in post-2010 taxable years. The Treasury Department and IRS expect that future guidance will provide that foreign tax credit splitting events in post-2010 taxable years will at least include all of the arrangements identified in section 4 of this notice. This future guidance may also provide that section 909 applies to other transactions or arrangements not identified in section 4 of this notice, but any such guidance relating to the definition of a foreign tax credit splitting event will apply only with respect to foreign income taxes paid or accrued in post-2010 taxable years.

Section 909 does not address the determination of the person who paid a foreign income tax for U.S. federal income tax purposes. See §1.901-2(f). Further, nothing in this notice should be construed as providing guidance with respect to that determination.

The Treasury Department and IRS will issue regulations providing that pre-2011 taxes described in paragraphs (a) through (d) of this section 3 will not be suspended under section 909:

(a) Any pre-2011 taxes that were not paid or accrued in connection with a pre-2011 splitter arrangement identified in section 4 of this notice;

(b) Any pre-2011 taxes that were paid or accrued in connection with a pre-2011 splitter arrangement identified in section 4 of this notice (“pre-2011 split taxes”) but that were deemed paid under section 902(a) or 960 on or before the last day of the section 902 corporation’s last pre-2011 taxable year;

(c) Any pre-2011 split taxes if either (1) the payor section 902 corporation took the related income into account in a pre-2011 taxable year or (2) a section 902 shareholder took the related income into account on or before the last day of the section 902 corporation’s last pre-2011 taxable year; and

(d) Any pre-2011 split taxes paid or accrued by a section 902 corporation in taxable years of such section 902 corporation beginning before January 1, 1997 (because it is unlikely that material amounts of foreign income taxes described in that paragraph were accumulated and not previously deemed paid).

To the extent that the section 902 corporation paid or accrued pre-2011 split taxes that are not described in paragraphs (a) through (d) above, section 909 will apply to such pre-2011 split taxes for purposes of applying sections 902 and 960 in post-2010 taxable years of the section 902 corporation. Accordingly, these taxes will be removed from the section 902 corporation’s pools of post-1986 foreign income taxes and suspended under section 909 as of the first day of the section 902 corporation’s first post-2010 taxable year.

The regulations described in this notice will apply in post-2010 taxable years, including for purposes of applying sections 902 and 960 to pre-2011 taxes. Until regulations incorporating the guidance set forth in this notice are issued, taxpayers may rely on the guidance contained in this notice.

The Treasury Department and IRS solicit comments on the rules described in this notice, including specifically the extent to which the 2006 proposed regulations should be finalized and §1.704-1(b)(4)(viii)(d) and §1.704-1(b)(5), Example 24 should be modified. The Treasury Department and IRS expect future guidance will treat pre-2011 splitter arrangements as giving rise to foreign tax credit splitting events in post-2010 taxable years. The Treasury Department and IRS request comments on the appropriateness of such treatment and whether and to what extent other transactions or arrangements should give rise to foreign tax credit splitting events in post-2010 taxable years. In particular, comments are requested on whether and to what extent the following transactions (or circumstances, as appropriate) should be treated as giving rise to foreign tax credit splitting events: (1) covered asset acquisitions described in section 901(m); (2) the incorporation of a disregarded entity or a hybrid partnership with respect to foreign income taxes paid in the year of the incorporation or attributable to a significant timing difference; (3) certain transfer pricing adjustments; (4) group relief structures not otherwise described in this notice; (5) sale and repurchase agreements in the related and unrelated counterparty contexts; (6) foreign anti-deferral regimes; and (7) foreign consolidated groups in which members have losses.

The Treasury Department and IRS also solicit comments concerning: (1) rules for associating foreign income taxes with related income; (2) ordering rules for dividends out of earnings and profits comprising both related income and other income; (3) the effect on related income of losses and deficits in earnings; and (4) additional rules for assigning foreign income taxes and related income to separate categories.

Written comments may be submitted to the Office of Associate Chief Counsel (International), Attention: Jeffrey L. Parry, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC 20224. Alternatively, taxpayers may submit comments electronically to Notice.comments@irscounsel.treas.gov. Comments will be available for public inspection and copying. For further information regarding this notice, contact Mr. Parry of the Office of Associate Chief Counsel (International) at (202) 622-3850 (not a toll-free call).

This notice provides guidance as to the corporate bond weighted average interest rate and the permissible range of interest rates specified under § 412(b)(5)(B)(ii)(II) of the Internal Revenue Code as in effect for plan years beginning before 2008. It also provides guidance on the corporate bond monthly yield curve (and the corresponding spot segment rates), the 24-month average segment rates, and the funding transitional segment rates under § 430(h)(2). 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, the 30-year Treasury weighted average rate under § 431(c)(6)(E)(ii)(I), and the minimum present value segment rates under § 417(e)(3)(D) as in effect for plan years beginning after 2007.

Sections 412(b)(5)(B)(ii) and 412(l)(7)(C)(i), as amended by the Pension Funding Equity Act of 2004 and by the Pension Protection Act of 2006 (PPA), provide that the interest rates used to calculate current liability and to determine the required contribution under § 412(l) for plan years beginning in 2004 through 2007 must be within a permissible range based on the weighted average of the rates of interest on amounts invested conservatively in long term investment grade corporate bonds during the 4-year period ending on the last day before the beginning of the plan year.

Notice 2004-34, 2004-1 C.B. 848, provides guidelines for determining the corporate bond weighted average interest rate and the resulting permissible range of interest rates used to calculate current liability. That notice establishes that the corporate bond weighted average is based on the monthly composite corporate bond rate derived from designated corporate bond indices. The methodology for determining the monthly composite corporate bond rate as set forth in Notice 2004-34 continues to apply in determining that rate. See Notice 2006-75, 2006-2 C.B. 366.

The composite corporate bond rate for November 2010 is 5.43 percent. Pursuant to Notice 2004-34, the Service has determined this rate as the average of the monthly yields for the included corporate bond indices for that month.

The following corporate bond weighted average interest rate was determined for plan years beginning in the month shown below.

Generally for plan years beginning after 2007 (except for delayed effective dates for certain plans under sections 104, 105, and 106 of PPA), § 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. However, an election may be made under § 430(h)(2)(D)(ii) to use the monthly yield curve in place of the segment rates. For plan years beginning in 2008 and 2009, a transitional rule under § 430(h)(2)(G) provides that the segment rates are blended with the corporate bond weighted average as specified above. An election may be made under § 430(h)(2)(G)(iv) to use the segment rates without applying the transitional rule.

Notice 2007-81, 2007-2 C.B. 899, provides guidelines for determining the monthly corporate bond yield curve, the 24-month average corporate bond segment rates, and the funding transitional segment rates used to compute the target normal cost and the funding target. Pursuant to Notice 2007-81, the monthly corporate bond yield curve derived from November 2010 data is in Table I at the end of this notice. The spot first, second, and third segment rates for the month of November 2010 are, respectively, 1.65, 4.91, and 6.52. The three 24-month average corporate bond segment rates applicable for December 2010 under the election of § 430(h)(2)(G)(iv) are as follows:

The transitional segment rates under § 430(h)(2)(G) applicable for December 2010, taking into account the corporate bond weighted average of 6.14 stated above, are as follows:

The transitional rule of § 430(h)(2)(G) does not apply to plan years starting in 2010. Therefore, for a plan year starting in 2010 with a lookback month to December 2010, the funding segment rates are the three 24-month average corporate bond segment rates applicable for December 2010, listed above without blending for the transitional period.

Section 417(e)(3)(A)(ii)(II) (prior to amendment by PPA) defines the applicable interest rate, which must be used for purposes of determining the minimum present value of a participant’s benefit under § 417(e)(1) and (2), as the annual rate of interest on 30-year Treasury securities for the month before the date of distribution or such other time as the Secretary may by regulations prescribe. Section 1.417(e)-1(d)(3) of the Income Tax Regulations provides that the applicable interest rate for a month is the annual rate of interest on 30-year Treasury securities as specified by the Commissioner for that month in revenue rulings, notices or other guidance published in the Internal Revenue Bulletin.

The rate of interest on 30-year Treasury securities for November 2010 is 4.19 percent. The Service has determined this rate as the average of the yield on the 30-year Treasury bond maturing in August 2040 determined each day through November 9, 2010, and the yield on the 30-year Treasury bond maturing in November 2040 determined each day for the balance of the month.

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 section 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 following rates were determined for plan years beginning in the month shown below.

Generally for plan years beginning after December 31, 2007, the applicable interest rates under § 417(e)(3)(D) are segment rates computed without regard to a 24-month average. For plan years beginning in 2008 through 2011, the applicable interest rates are the monthly spot segment rates blended with the applicable rate under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning in 2007. Notice 2007-81 provides guidelines for determining the minimum present value segment rates. Pursuant to that notice, the minimum present value transitional segment rates determined for November 2010, taking into account the November 2010 30-year Treasury rate of 4.19 stated above, are as follows:

The principal author of this notice is Tony Montanaro of the Employee Plans, Tax Exempt and Government Entities Division. Mr. Montanaro may be e-mailed at RetirementPlanQuestions@irs.gov.

This notice delays the effective date of Revenue Ruling 2006-57. Revenue Ruling 2006-57 provides guidance to employers on the use of smartcards, debit or credit cards, or other electronic media to provide qualified transportation fringes under sections 132(a)(5) and (f) of the Code. This guidance is intended to provide relief to mass transit providers that have been unable to update their systems in order to comply with the Revenue Ruling guidelines prior to the current effective date of January 1, 2011. The effective date of Revenue Ruling 2006-57 is further delayed until January 1, 2012. Revenue Ruling 2006-57 is modified.

Revenue Ruling 2006-57, 2006-2 C.B. 911, provides guidance to employers on the use of smartcards, debit or credit cards, or other electronic media to provide qualified transportation fringes under Internal Revenue Code §§ 132(a)(5) and 132(f). The ruling’s effective date was set for January 1, 2008. In 2007, however, Treasury and the IRS became aware that certain transit systems needed additional time to modify their technology and make it compatible with the requirements for vouchers set forth in Revenue Ruling 2006-57. Consequently, Treasury and the IRS delayed the effective date of Revenue Ruling 2006-57 until January 1, 2009. See Notice 2007-76, 2007-2 C.B. 735. In 2008, Treasury and the IRS further delayed the effective date of Revenue Ruling 2006-57 until January 1, 2010. See Notice 2008-74, 2008-38 I.R.B. 718. And, in 2009, Treasury and the IRS delayed the effective date of Revenue Ruling 2006-57 until January 1, 2011. See Notice 2009-95, 2009-52 I.R.B. 968. Certain transit systems need additional time to complete the process of adapting their technology to achieve compatibility with the requirements for vouchers. Therefore, the ruling’s effective date is further delayed until January 1, 2012. Nevertheless, employers and employees may rely on Revenue Ruling 2006-57 with respect to transactions occurring prior to January 1, 2012.

The principal author of this notice is Syd Gernstein of the Office of Associate Chief Counsel (Tax Exempt & Government Entities). For further information regarding this notice, contact Syd Gernstein at (202) 622-6040 (not a toll-free call).

This revenue procedure describes the procedure by which the plan sponsor of a multiemployer pension plan may request and obtain approval of an extension of an amortization period in accordance with § 431(d) of the Internal Revenue Code of 1986 (Code).

.01 Section 431(d).—Section 431(d) was added to the Code as part of a significant revision of the funding rules for pension plans qualified under § 401(a) made by the Pension Protection Act of 2006 (PPA). Parallel provisions to § 431(d) can be found at § 304(d) of the Employee Retirement Income Security Act of 1974 (ERISA). The Secretary of the Treasury has interpretive and enforcement jurisdiction over both provisions.

Section 431(d)(1) provides that if the plan sponsor of a multiemployer plan submits to the Secretary of the Treasury an application for an extension of the amortization period for any unfunded liability described in § 431(b)(2)(B) or 431(b)(4) (referred to in this revenue procedure as a “charge base”), and includes the certification by the plan’s actuary described in § 431(d)(1)(B), the Secretary shall extend the amortization period for the period (not in excess of five years) requested in the application. An extension under § 431(d)(1) is referred to as an automatic extension. In addition, § 431(d)(2)(A) provides that the plan sponsor of a multiemployer plan may submit an application for an extension of the amortization period for any such charge base, and the Secretary may extend the amortization period for a period of time not in excess of 10 years less the number of years of any automatic extension with respect to such charge base, if the Secretary makes the determination described in § 431(d)(2)(B). An extension under § 431(d)(2) is referred to as an alternative extension. Section 431(d)(3) requires that an applicant provide notice of the extension application to each affected party described in § 4001(a)(21) of ERISA.

.02 Rev. Proc. 2008-67.—Rev. Proc. 2008-67, 2008-2 C.B. 1211, provided the procedure for submitting an application for a ruling on an amortization extension with respect to plan years starting after December 31, 2007. This revenue procedure differs from Rev. Proc. 2008-67 in a number of ways. The major differences include: modifications to the list of affected parties to whom notification must be made (adding the Pension Benefit Guaranty Corporation (PBGC) and removing contributing employers); extension of the period for submission of an application; and modification of the treatment of automatic extension applications for purposes of certifying a plan’s status under § 432(b)(3) of the Code. This revenue procedure also clarifies certain other aspects of Rev. Proc. 2008-67. In addition, the model notice in this revenue procedure now includes a plain language explanation section and a Comment and IRS Acknowledgement Sheet.

.03 Section 431(b)(8).—Section 211(a)(2) of the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (PRA 2010), Pub. L. No. 111-192, added § 431(b)(8) to the Code. Section 431(b)(8)(A) provides a special amortization rule for certain net investment losses in the case of a multiemployer plan that meets a solvency test. The special rule applies to the portion of the plan’s experience loss or gain for a plan year attributable to net investment losses (if any) incurred in either or both of the first two plan years ending after August 31, 2008 (an eligible loss year). This portion of the experience loss or gain may be treated as an item separate from other experience losses, to be amortized in equal annual installments (until fully amortized) over the period beginning with the plan year in which such portion is first recognized in the actuarial value of assets and ending with the last plan year in the 30-plan-year period beginning with the eligible loss year. Under § 431(b)(8)(A)(ii)(I), the amortization period under the special amortization rule cannot be further extended under § 431(d). In addition, under § 431(b)(8)(A)(ii)(II), if an extension of an amortization period was granted under § 431(d) for any plan year before a decision to apply the special amortization rule for the plan year, that extension cannot result in the amortization period under the special amortization rule exceeding 30 years.

.01 Who may submit.—An application for approval to extend the period of years required to amortize any unfunded liability must be submitted by the plan sponsor (i.e., the board of trustees of the plan, and referred to in this revenue procedure as the applicant or Board) or by an authorized representative of the applicant. The application must be signed by an authorized trustee who is a current member of the Board or by an authorized representative of the applicant who either must be identified in (a), (b), or (c) of subsection 9.02(11) of Rev. Proc. 2010-4, 2010-1 I.R.B. 122, or must be an enrolled actuary within the meaning of § 7701(a)(35). Where an authorized representative signs the application or will appear before the Service in connection with the application, a Form 2848, Power of Attorney and Declaration of Representative, must be submitted with the application. An individual is not an authorized representative of the applicant merely on account of being an administrator or trustee of the plan.

.02 Submission.—An application must be submitted to:

The user fee required by Rev. Proc. 2010-8, 2010-8 I.R.B. 234, must be sent with such an application.

.03 Required Information.—An application must contain the information required by § 4 and/or § 5 of this revenue procedure, as applicable. Applications must include the plan name, the plan sponsor’s employer identification number, and the plan number. Applications must also include a statement that the notice required by § 3.05 of this revenue procedure has been provided, a description of the method of delivery used to satisfy the notice requirement, and a copy of the notice.

.04 Necessary Procedural Documents.—An application will not be considered unless it complies with (1) and (2) below.

(1) The application must contain a declaration in the following form: “Under penalties of perjury, I declare that I have examined this request, or this modification to the request, including accompanying documents, and, to the best of my knowledge and belief, the request or the modification contains all the relevant facts relating to the request or the modification, and such facts are true, correct, and complete.” This declaration must be signed by an authorized trustee who is a current member of the Board. The signature of an individual with a power of attorney will not suffice for the declaration. See § 9.02(13) of Rev. Proc. 2010-4.

(2) Because the application constitutes a request for a ruling, compliance with § 6110 is also required. Section 601.201 of the Statement of Procedural Rules sets forth the requirements applicable to requests for rulings and determination letters which are subject to § 6110. Section 601.201(e) furnishes specific instructions to applicants.

The applicant must provide with the application either a statement of proposed deletions and the statutory basis for each proposed deletion, or a statement that no information other than names, addresses, and taxpayer identifying numbers need be deleted.

.05 Notification.—Within 14 days prior to the date of an application, the applicant must provide a copy of a written notice to each affected party (within the meaning of § 4001(a)(21) of ERISA) stating that an application for an extension of the amortization period under § 431(d) is being submitted to the Service. This includes each employee organization representing employees covered by the plan, each participant, beneficiary, and alternate payee (within the meaning of § 414(p)(8)) of the Code), and the PBGC. The original of the notice must bear a signature by an authorized trustee who is a current member of the applicant’s Board and must be in substantially the form set forth in the Model Notice found in Appendix A to this revenue procedure. The Service does not require the applicant to furnish any information to affected parties in addition to that required by the Model Notice in Appendix A as part of the extension application process, but additional information may be provided by the applicant pursuant to the collective bargaining process or otherwise.

The notice must be hand-delivered or mailed to the last known address of each employee organization, participant, beneficiary, and alternate payee. Alternatively, the notice may be delivered electronically in accordance with the requirements of § 1.401(a)-21 of the Income Tax Regulations. Merely posting the notice on a bulletin board is not sufficient to satisfy this notice requirement. If the applicant makes a reasonable effort to carry out the provisions of this paragraph, then failure of an employee organization, participant, beneficiary, or alternate payee to receive the notice will not cause the applicant to fail the notice requirement.

Notice to the PBGC may be submitted electronically to MultiemployerProgram@pbgc.gov or may be sent to the following address:

.06 Providing Information.—Employers who have difficulty in furnishing the information specified in this revenue procedure may call the Employee Plans Customer Assistance Service at 1-877-829-5500 (a toll-free number), or write for guidance to the following address:

In appropriate instances, pre-submission conferences may be afforded in addition to conferences available under Rev. Proc. 2010-8.

.07 Coordination of Extension Applications.—The total length of an amortization period extension permitted under paragraphs (1) and (2) of § 431(d) of the Code for a charge base is limited to 10 years. Section 4 of this revenue procedure relates to automatic extensions under § 431(d)(1). Section 5 of this revenue procedure relates to alternative extensions under § 431(d)(2). An automatic extension for a charge base may not exceed five years. An alternative extension for a charge base may be for up to 10 years less any automatic extension approved for that charge base. An applicant requesting both types of extension may do so in a single application. However, such an application must include the information specified in § 4.01 below (including the actuarial certification described in § 4.01(4)), the information specified in § 5.01 below, and a completed copy of the checklist that appears as Appendix B of this revenue procedure. Such a combined application will be considered a single ruling request. If the applicant requests both types of extension in a single application, the Service may approve the automatic extension without approving the alternative extension.

.08 Modification of Existing Extension.—If a plan has already received under § 431(d), or under § 412(e) as in effect before the effective date of PPA, an extension for less than 10 years of the amortization period on any charge base, an application for an alternative extension may be submitted modifying the extension on such charge base to a total of 10 years (taken together with the original extension). Even if the original extension was for less than five years, no such modification of an extension may be requested as an automatic extension.

.09 Interim Effect of Application.—Whether the Service has ruled on an application does not affect the 90-day deadline for certification of a multiemployer plan’s status under § 432(b)(3) of the Code. In making this certification, if the plan has submitted an application for an automatic extension under § 431(d)(1) and the Service has not yet ruled on the application, the actuary must treat the application as approved. However, for certifications made before January 1, 2011, the actuary may, but is not required to, treat as approved an application for an automatic extension on which the Service has not yet ruled. The provisions in the preceding two sentences do not apply if the application was submitted after the deadline specified in Section 6, or if the actuary has reason to believe that the standards of this revenue procedure have not been met for the application submitted.

.01 Information to be provided.—An applicant for an automatic extension must furnish the following information:

(1) A list of the charge bases for which an extension of the amortization periods is requested.

(2) The length of the extension of the amortization period being requested for each of the charge bases listed in (1) above (up to a maximum of five years). No extension will be granted with respect to an amortization period for net investment losses described under § 431(b)(8)(A)(i).

(3) Whether a prior application for an automatic or alternative amortization extension under § 431(d), or amortization extension under § 412(e) as in effect before the effective date of PPA, was or was not approved with respect to any of the charge bases for which an extension is requested, including, if approved, the length of the extension, and, if denied, the reason for the denial and an explanation of why the reason for the denial no longer applies.

(4) A certification by the plan’s actuary that, based on reasonable assumptions:

1. Absent the extension for which the plan is applying, the plan would have an accumulated funding deficiency in the current plan year or any of the nine succeeding plan years,

2. The plan sponsor has adopted a plan to improve the plan’s funding status,

3. The plan is projected to have sufficient assets to timely pay expected benefits and anticipated expenditures over the amortization period as extended, and

4. The notice required under § 431(d)(3)(A) has been provided, in accordance with § 3.05 of this revenue procedure.

.02 Ruling.—Upon receipt of the application with the necessary information, and verification that the criteria stated above have been met, the Secretary shall issue a statement to the applicant providing approval for the requested extension.

.03 Applicable Period.—The procedures of this § 4 shall not apply with respect to any application submitted after December 31, 2014, in accordance with § 431(d)(1)(C).

.01 Information to be provided.—An applicant for an alternative extension must furnish appropriate evidence that the extension of the amortization period would carry out the purposes of ERISA and PPA and would provide adequate protection for participants and their beneficiaries, and that the failure to permit the extension would (I) result in a substantial risk to the voluntary continuation of the plan, or a substantial curtailment of pension benefit levels or employee compensation, and (II) be adverse to the interests of plan participants in the aggregate. What constitutes appropriate evidence will depend on the facts and circumstances of each case. A response must be furnished for each of paragraphs (1) through (5) below. In certain cases, some of the material described in paragraphs (1) through (5) may be inapplicable, unavailable, inappropriate, or burdensome to furnish. In such cases, the applicant must furnish a statement indicating why the material for a particular paragraph is inapplicable, unavailable, inappropriate, or burdensome.

(1) General facts concerning the participating employers.

A brief statement should be submitted concerning: (a) the history of the contributing employers and the industry or industries covered by the plan; (b) the ownership of the principal employers (as identified below) and any recent or contemplated changes (such as acquisitions, mergers, or discontinuances of operations) which might have a bearing on the employers’ organizations or general financial condition; (c) any recently withdrawn principal employers with the applicable withdrawal liability amounts and dates; and (d) a general description of the financial state of the industry in which employees covered by the plan are employed.

(2) The financial condition of the principal employers.

For purposes of this revenue procedure, the principal employers are those employers who (1) are directly represented on the applicant board of trustees, (2) made five percent or more of the total contributions to the plan during the preceding plan year, or (3) for the current plan year, are required to make five percent or more of the total required contributions under the collective bargaining agreements relating to the plan for which the extension is requested. Each of the principal employers must submit the latest available annual financial report of the employer and each of the other entities included within the controlled group of which the employer is a member. This submission must include at least the balance sheet, profit and loss statement, cash flow statement, and notes to the financial statement. Recent interim financial reports for each of the controlled group members, if available, must also be submitted along with an interim financial report covering the corresponding period for the previous year. If the employer submits financial reports to the Securities and Exchange Commission, these reports must be submitted for the same period as the annual financial report. Preferably, the financial report should include certified financial statements. If certified financial statements have not been prepared, an uncertified report is acceptable. If neither certified nor uncertified reports are available, a copy of the company’s latest available federal income tax return, including all of the supporting schedules, must be submitted. The required financial information of the principal employers should be submitted directly from each employer to the Service at the following address, at the same time that the application is made:

(3) Information concerning the extension of the amortization period.

Information concerning the extension of the amortization period must include the following.

1. A list of the charge bases for which the extension is requested, the amount of each such base, and the number of years remaining in the amortization period for the charge base. A favorable ruling will not be granted on an application with respect to which the total amount subject to the requested extension is not yet established.

2. The reasons why an extension of the amortization period is needed.

3. The length of the extension of the amortization period desired (up to a maximum of 10 years less any automatic or previously approved alternative extension). No extension will be granted with respect to an amortization period for net investment losses described under § 431(b)(8)(A)(i).

4. Whether a prior application for an automatic or alternative amortization extension under § 431(d), or amortization extension under § 412(e) as in effect before the effective date of PPA, was or was not approved with respect to any of the charge bases for which an extension is requested, including, if approved, the length of the extension, and, if denied, the reason for the denial and an explanation of why the reason for the denial no longer applies.

5. Information concerning the actions taken by the applicant, before the application for an extension has been made, to reduce the plan’s unfunded liability. Such actions would include the reduction of future plan benefit accruals and increases in employer contribution rates. Also describe any benefit reductions, contribution rate increases, or other actions that are intended to be taken in the future.

6. Projections of (i) funding standard account credit balance/accumulated funding deficiencies, (ii) actuarial value of assets and market value of assets, (iii) current liabilities, and (iv) funding ratios (determined in accordance with § 432(i)) for the length of the extension of the amortization period requested and for the period 10 years afterwards. For example, if the applicant requests an extension of 10 years (including a five-year automatic extension), the projections must be for a 20-year period. These projections must be prepared by an enrolled actuary.

7. The first plan year for which the extension would apply, i.e., the first plan year for which the extension of the amortization period will be reflected in the determination of the minimum funding standard for the plan (e.g., 1/1/2011-12/31/2011).

The Service may request additional information as needed.

(4) Facts concerning the pension plan.

For each pension plan for which an extension is requested, the following information must be supplied.

1. The date the plan was adopted.

2. The effective date of the plan.

3. The classes of employees covered.

4. The number of active participants and the number of total participants.

5. A copy of the current plan document and the most recent summary plan description.

6. A copy of the most recent determination letter issued to the plan.

7. A brief description of all plan amendments adopted during the first plan year for which the extension would apply and the previous four years which affect plan costs, including the approximate effect of each amendment on such costs.

8. The most recent actuarial report plus any available actuarial reports for the preceding two plan years. Also, if not shown in the most recent actuarial report, the present value of accrued benefits, present value of vested benefits, and fair market value of assets (excluding contributions not yet paid).

9. A description of how the plan is funded (i.e., trust fund, individual insurance policies, etc.).

10. A list of the contributions actually paid to the plan in each month, from the twenty-fourth month prior to the beginning of the first plan year for which the extension would apply through the date of the application (including the plan year to which each of the contributions was applied), with the employee contributions and the employer contributions listed separately.

11. The approximate contribution required to meet the minimum funding standard for the first plan year for which the extension would apply. This amount must be determined by the plan’s enrolled actuary.

12. A copy of the most recently completed Annual Return/Report of Employee Benefit Plan (Form 5500 series, as applicable) and a copy of the corresponding Actuarial Information schedule (Schedule MB).

13. A copy of each ruling letter for the plan that waived the plan’s minimum funding standard during the last 15 plan years, a statement of the amount waived for each plan year, and a statement of the outstanding balance of the amortization base for each waived funding deficiency. The outstanding balance of the amortization base for each waiver is to be calculated as of the first day of the first plan year for which an extension would apply.

14. A copy of each ruling letter for the plan that granted under § 431(d), or under § 412(e) of the Code as in effect before the effective date of the PPA, an extension of time to amortize any unfunded liability which became applicable at any time.

15. A copy of the certification of whether or not the plan is in critical status or endangered status, in accordance with the requirements of § 432(b)(3), for the first plan year for which the extension would apply.

16. A copy of any funding improvement plan or rehabilitation plan to which the plan is currently subject in accordance with § 432, or to which the plan has been subject at any time within the 10 years preceding the date of the application and all updates to the funding improvement plan or rehabilitation plan.

(5) Other information.

1. Describe the nature of any matters pertaining to the plan which are currently pending with, or are intended to be submitted to, the Service, the Department of Labor, or the PBGC.

2. Furnish details of any existing arbitration, litigation, or court procedure which involves the plan.

.02 Checklist.—A checklist has been provided in Appendix B for the use of an applicant submitting an application for an alternative extension. The checklist must be signed and dated by the applicant or authorized representative and placed on top of the application.

All extension applications must be submitted by the 15^th day of the third calendar month following the last day of the first plan year for which the extension is intended to take effect. The Service will consider applications for extensions submitted after this date only upon a showing of good cause. In seeking an alternative extension of an amortization period with respect to a plan year which has not yet ended, the applicant may have difficulty in furnishing sufficient current information in support of the application. For this reason, it is generally advised that an application not be submitted earlier than 90 days prior to the end of the plan year for which the extension is requested. This 90-day period does not apply to applications for an automatic extension. Section 431(d)(2)(C) of the Code requires that the Service act on an application for an alternative extension within 180 days of receiving the application. An application will not be considered received until the applicable information required by §§ 4.01, 5.01, and 5.02 of this revenue procedure has been received. The Service will provide notification to the applicant of the date upon which it has full receipt of all required information. The Service will close, without issuing a ruling, the file on a submission for which not all of the required documentation is provided in a timely manner.

If a significant number of contributing employers or any of the principal employers file a bankruptcy petition after the application for an extension of an amortization period is submitted to the Service, the applicant must provide to the Service an update to the information required to be submitted in § 5 of this revenue procedure, especially the financial information in §§ 5.01(2) and 5.01(3).

This revenue procedure is effective for all ruling requests submitted on or after January 1, 2011. Ruling requests submitted before January 1, 2011, may use this revenue procedure or Rev. Proc. 2008-67.

Rev. Proc. 2010-4, 2010-1 I.R.B. 122, is modified to the extent that this revenue procedure provides special procedures for issuing rulings with respect to applications for an extension of an amortization period.

Rev. Proc. 2008-67 is superseded effective for applications submitted on or after January 1, 2011.

The collection of information contained in this revenue procedure has 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 1545-1890.

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 collection of information in this revenue procedure is in §§ 3, 4 and 5, and Appendix B. This collection of information is required to evaluate, process, and obtain approval of the application for an extension of an amortization period. This information will be used to make determinations on extensions of the amortization period under § 431(d). The likely respondents are businesses or other for-profit institutions and nonprofit institutions.

The estimated total annual reporting/recordkeeping burden is 2,500 hours.

The estimated annual burden per respondent/recordkeeper varies from 71 to 129 hours, depending on individual circumstances, with an estimated average burden of 100 hours. The estimated number of respondents/recordkeepers is 25.

The estimated annual frequency of responses is one.

Books or records relating to a collection of information must be retained as long as their contents 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 Tony Montanaro of the Employee Plans, Tax Exempt and Government Entities Division. Questions about this revenue procedure and its application may be directed by email to RetirementPlanQuestions@irs.gov.

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 Service 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 Service 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 December 27, 2010, and would end on the date the court first determines that the organization is not described in section 170(c)(2) as more particularly set forth 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.

Internal Revenue Service (IRS), Treasury.

Correction to final regulations.

This document contains a correction to final regulations (T.D. 9340, 2007-2 C.B. 487 ) that were published in the Federal Register on Thursday, July 26, 2007 (72 FR 41128) providing updated guidance on section 403(b) contracts of public schools and tax-exempt organizations described in section 501(c)(3). These regulations will affect sponsors of section 403(b) contracts, administrators, participants, and beneficiaries.

The correction is effective October 26, 2010, and is applicable on July 26, 2007.

Concerning the regulations, John Tolleris at (202) 622-6060; concerning the regulations as applied to church-related entities, Sherri Edelman or Jason Levine at (202) 283-9634 (not toll-free numbers).

This announcement applies to tax return preparers who are required by law to electronically file certain returns. On December 3, 2010, proposed regulations were published in the Federal Register (75 FR 75439), which would implement the statutory requirement under section 6011(e)(3) of the Internal Revenue Code for specified tax return preparers to file income tax returns using magnetic media (electronically) for individuals, estates, and trusts if the specified tax return preparers prepare and file the returns. Notice 2010-85, a notice of a proposed revenue procedure published in the Internal Revenue Bulletin (I.R.B. 2010-51) on December 20, 2010, provides, for calendar year 2011, that tax return preparers who meet the definition of a “specified tax return preparer” and who believe they may qualify for an undue hardship waiver may voluntarily submit waiver requests to the IRS prior to publication of a final revenue procedure. Form 8944, Preparer e-file Hardship Waiver Request, is now available on-line and must be used to voluntarily request waivers for calendar year 2011. You can get Form 8944 on-line at www.irs.gov. Form 8944 may also be ordered by calling 1-800-TAX-FORM (1-800-829-3676), the toll-free IRS number for ordering forms. Forms ordered through the toll-free number will be mailed to you.

Specified tax return preparers may submit completed Forms 8944 on or after the date of the publication of this announcement. Specified tax return preparers are encouraged to submit undue hardship waiver requests using Form 8944 as soon as possible to allow sufficient time for the IRS to review the requests and provide notification of approval or denial of the requests. For calendar year 2011, Forms 8944 must be submitted to the IRS address or facsimile number (but not both) listed below, no later than April 1, 2011. Forms 8944 submitted after that date will only be reviewed under limited circumstances, as further explained in the instructions to Form 8944. A specified tax return preparer may mail his or her completed Form 8944 and any required attachments to:

Alternatively, a specified tax return preparer may send his or her completed Form 8944 and any required attachments to the IRS via facsimile to 1-877-477-0567 (a toll-free number). Allow four to six weeks to receive notification of approval or denial of the waiver request. However, the approval or denial of waiver requests is contingent upon and will not occur prior to the publication of final regulations and a final revenue procedure.

For questions about completing Form 8944, or to check on the status of a hardship waiver request that has been submitted and remains outstanding for at least four weeks, call the IRS at 1-866-255-0654 (a toll-free number). The principal author of this announcement is Keith Brau of the Office of Associate Chief Counsel (Procedure & Administration). For further information regarding this announcement, contact Keith Brau at (202) 622-4940 (not a toll-free number).