Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes of sections 382, 642, 1274, 1288, and other sections of the Code, tables set forth the rates for June 2015.

The Office of Professional Responsibility (OPR) announces recent disciplinary sanctions involving attorneys, certified public accountants, enrolled agents, enrolled actuaries, enrolled retirement plan agents, and appraisers. These individuals are subject to the regulations governing practice before the Internal Revenue Service (IRS), which are set out in Title 31, Code of Federal Regulations, Part 10, and which are published in pamphlet form as Treasury Department Circular No. 230. The regulations prescribe the duties and restrictions relating to such practice and prescribe the disciplinary sanctions for violating the regulations.

This notice sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for May 2015 used under § 417(e)(3)(D), the 24-month average segment rates applicable for May 2015, 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).

This Revenue Ruling provides guidances needed to update RR90–5 dealing with Sat., Sun., and Holiday rules for filing.

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). The rates in this notice 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, Public Law 113–159 (HATFA).

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. 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 April 2015 data is in Table I at the end of this notice. The spot first, second, and third segment rates for the month of April 2015 are, respectively, 1.27, 3.52, and 4.47.

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) by the applicable percentage of the corresponding 25-year average segment rates. Section 2003(a) of HATFA amended the applicable percentages under § 430(h)(2)(C)(iv). This change generally applies to plan years beginning on or after January 1, 2013. However, pursuant to section 2003(e)(2) of HATFA, a plan sponsor can elect not to have the amendments made to the applicable percentages by section 2003 of HATFA apply to any plan year beginning in 2013. These elections can be made either for all purposes or, alternatively, for purposes of determining the adjusted funding target attainment percentage under § 436. The 25-year average segment rates for plan years beginning in 2012, 2013, 2014 and 2015 were published in Notice 2012–55, 2012–36 I.R.B. 332, Notice 2013–11, 2013–11 I.R.B. 610, Notice 2013–58, 2013–40 I.R.B. 294, and Notice 2014–50, 2014–40 I.R.B. 590, respectively.

For plan years beginning in years 2012 through 2017, pursuant to the changes made by HATFA, the applicable minimum percentage is 90% and the applicable maximum percentage is 110%. These applicable percentages are referred to as HATFA applicable percentages. As described in the preceding paragraph, a special election is available for any plan year beginning in 2013 under which this change made by HATFA can be disregarded for all purposes or for limited purposes. To the extent such an election is made, the applicable minimum percentage for a plan year beginning in 2013 is 85% and the applicable maximum percentage for that plan year is 115%. These applicable percentages are referred to as MAP–21 applicable percentages.

The three 24-month average corporate bond segment rates applicable for May 2015 without adjustment for the 25-year average segment rate limits are as follows:

Based on § 430(h)(2)(C)(iv) as amended by section 2003 of HATFA, the 24-month averages applicable for May 2015 adjusted for the HATFA applicable 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 April 2015 is 2.59 percent. The Service determined this rate as the average of the daily determinations of yield on the 30-year Treasury bond maturing in February 2045. 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 April 2015 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 202-317-8719 or Tony Montanaro at 202-317-8698 (not a toll-free number).

Under the facts described below, by what date must the specified act be performed if the due date for A’s income tax return and estimated tax payment falls on a Saturday, Sunday, or legal holiday?

A, an individual who is a resident of Massachusetts, files A’s federal income tax return on a calendar year basis. As an individual resident of Massachusetts, A is required by Internal Revenue Service (IRS) forms and instructions to file A’s return at the Kansas City, MO, Internal Revenue Service Campus. A also makes installment payments of estimated income tax for the calendar year. As a resident of Massachusetts, A is required by IRS forms and instructions to send A’s estimated income tax payments to Hartford, CT.

In this situation, April 15 falls on the third Friday in April. Emancipation Day, April 16, is a legal holiday in the District of Columbia. The following Monday, April 18, is Patriots’ Day, a legal holiday in Massachusetts and Maine but not in any other state.

Section 6151(a) of the Internal Revenue Code (Code) provides that when a return of tax is required, the person required to make the return shall pay the tax at the time and place fixed for filing the return.

Section 6072(a) of the Code provides that individual income tax returns made on the basis of the calendar year shall be filed on or before the 15th day of April following the close of the calendar year.

Section 6654(c) of the Code provides that the due date for the first required installment payment of estimated income tax is April 15.

Section 7503 of the Code provides that, when April 15 falls on a Saturday, Sunday, or legal holiday, a return is considered timely filed if it is filed on the next succeeding day that is not a Saturday, Sunday, or legal holiday. The term “legal holiday” includes a legal holiday observed in the District of Columbia. A tax calendar that lists the legal holidays is annually made available through IRS Publication 509. Emancipation Day, April 16, is a legal holiday in the District of Columbia. D.C. Code § 28–2701 (2010). When April 16 is a Saturday, the preceding day is the observed holiday, and when it is a Sunday, the succeeding day is the observed holiday. Id.

Section 7503 also provides that, in the case of any return required to be filed at any office of the Secretary, or at any other office of the United States or any agency thereof, located outside the District of Columbia but within an IRS district, the term “legal holiday” includes a statewide legal holiday in the state where the office is located. Patriots’ Day, the third Monday in April, is a statewide legal holiday in Massachusetts and Maine. Mass. Ann. Laws. ch. 4, § 7(18) (Law. Coop. 1988); Me. Rev. Stat. Ann. tit. 4, § 1051 (1988).

Treasury Regulation § 1.6091–2(c) provides that “whenever instructions applicable to income tax returns provide that the returns be filed with a service center, the returns must be so filed . . .” Individuals who make their income tax returns on a calendar year basis generally must file their returns at the IRS service center (now known as campuses) designated in the applicable instructions. However, Treasury Regulation § 1.6091–2(d)(1) provides that, notwithstanding Treasury Regulation § 1.6091–2(c), income tax returns of persons other than corporations that are hand carried shall be filed with any individual assigned the responsibility to receive such returns in the local IRS office serving the legal residence or principal place of business of the person required to make the return.

Revenue Ruling 90–5 addressed the due date for filing income tax returns and paying the first installment of estimated income tax for individuals who were required to file their returns at the Andover, Massachusetts Service Center, including residents from Massachusetts and Connecticut. However, the IRS no longer requires taxpayers to file returns at the Internal Revenue Center in Andover, Massachusetts.

Section 7503 of the Code extends the time for performing an act required by the internal revenue laws when the last day for performing the act would be a Saturday, Sunday, or legal holiday. Pursuant to Treasury Regulation § 1.6091–2(d)(1), individuals who reside in Massachusetts and Maine may elect to file their returns by hand at their local IRS Office located in Massachusetts or Maine. When the last day for residents of those states to file their returns by hand falls on a Saturday, Sunday or legal holiday, section 7503 extends the due date to the next succeeding day which is not a Saturday, Sunday or legal holiday. We interpret this rule to extend the due date for filing income tax returns for all residents of Massachusetts and Maine pursuant to section 7503, including those who do not elect to file by hand. Accordingly, the statewide observance of Patriots’ Day in Massachusetts or Maine affects the due date for income tax returns of individuals who reside in Massachusetts and Maine, but it does not affect the due date of income tax returns for individuals who do not reside in Massachusetts or Maine.

Revenue Ruling 90–5 addresses the due date for filing income tax returns and paying the first installment of estimated income tax where April 15 falls on a Saturday, Sunday, or legal holiday. Revenue Ruling 90–5 applies to individuals who are required to file their returns at the Andover, Massachusetts Service Center, including residents from Massachusetts and Connecticut, and who are required to send their estimated income tax payments to a depository in Pittsburgh, Pennsylvania. Revenue Ruling 90–5 concludes that residents of Massachusetts and Connecticut receive the benefit of the Massachusetts state holiday since their federal income tax returns may be filed in Andover, Massachusetts. The estimated tax payments on the other hand, required to be sent to Pittsburgh, Pennsylvania, a state that does not observe Patriots’ Day, are due on April 15, notwithstanding this was a statewide holiday in Massachusetts.

Notice 2002–12 addressed the filing requirements for individual taxpayers from several states who were filing their income tax returns in Massachusetts in a year when Patriots’ Day fell on April 15. Notice 2002–12 provides: “for filing season 2002 (tax year 2001) individual income taxpayers in Massachusetts, Michigan, New York (all counties except for Nassau, Rockland, Suffolk, Westchester, and New York City), Rhode Island, and Maine have until Tuesday, April 16, 2002, to file their Federal income tax returns and make their payments. This includes the payment of the first installment of estimated tax for 2002.”

Notice 2011–17 describes the impact of Emancipation Day on the filing deadline for certain tax forms and payments. Specifically, it provides that Emancipation Day, an official public holiday in the District of Columbia, is a legal holiday described in section 7503.

Previously, there was no guidance covering the impact that both Emancipation Day and Patriot’s Day could have on the time for filing an individual income tax return or making an estimated payment of tax when the due date for the income tax return and estimated tax payment falls on a Saturday, Sunday, or legal holiday.

The District of Columbia observes Emancipation Day on Friday, April 15 when April 16 is a Saturday. This makes Monday, April 18, the ordinary due date for filing income tax returns. However, in this situation, Monday, April 18, is the third Monday in April, the date that Massachusetts and Maine observe Patriots’ Day. Because residents of Massachusetts and Maine may elect to hand carry their income tax returns to their local IRS offices, A has until the next succeeding day that is not a Saturday, Sunday, or legal holiday to file A’s income tax return. Thus, A has until Tuesday, April 19, to file A’s income tax return.

A is required to make installment payments of estimated income tax to a depository in Hartford, Connecticut, a state in which the third Monday in April is not a statewide legal holiday. Accordingly, A must make the first installment payment of estimated tax on or before the ordinary due date for income tax returns for the act to be timely. The fact that A is a resident of Massachusetts, a state in which the third Monday in April is a statewide legal holiday, has no effect on A’s due date for payment of A’s first installment of estimated tax. Thus, A must pay A’s first installment of estimated income tax on or before April 18.

Revenue Ruling 90–5, 1990–1 C.B. 189 is clarified and superseded.

Notice 2002–12, 2002–1 C.B. 526 is clarified and superseded.

Notice 2011–17, 2011–10 I.R.B. 540 is clarified and amplified.

The principal author of this revenue ruling is Michael A. Franklin of the Office of Associate Chief Counsel (Procedure & Administration). For further information regarding this revenue ruling, contact Mr. Franklin at (202) 317-6833 (not a toll-free number).

This revenue ruling provides various prescribed rates for federal income tax purposes for June 2015 (the current month). Table 1 contains the short-term, mid-term, and long-term applicable federal rates (AFR) for the current month for purposes of section 1274(d) of the Internal Revenue Code. Table 2 contains the short-term, mid-term, and long-term adjusted applicable federal rates (adjusted AFR) for the current month for purposes of section 1288(b). Table 3 sets forth the adjusted federal long-term rate and the long-term tax-exempt rate described in section 382(f). Table 4 contains the appropriate percentages for determining the low-income housing credit described in section 42(b)(1) for buildings placed in service during the current month. However, under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after July 30, 2008, with respect to housing credit dollar amount allocations made before January 1, 2015 shall not be less than 9%. Finally,Table 5 contains the federal rate for determining the present value of an annuity, an interest for life or for a term of years, or a remainder or a reversionary interest for purposes of section 7520.

The Office of Professional Responsibility (OPR) announces recent disciplinary sanctions involving attorneys, certified public accountants, enrolled agents, enrolled actuaries, enrolled retirement plan agents, and appraisers. These individuals are subject to the regulations governing practice before the Internal Revenue Service (IRS), which are set out in Title 31, Code of Federal Regulations, Part 10, and which are published in pamphlet form as Treasury Department Circular No. 230. The regulations prescribe the duties and restrictions relating to such practice and prescribe the disciplinary sanctions for violating the regulations.

The disciplinary sanctions to be imposed for violation of the regulations are:

Disbarred from practice before the IRS—An individual who is disbarred is not eligible to practice before the IRS as defined at 31 C.F.R. § 10.2(a)(4).

Suspended from practice before the IRS—An individual who is suspended is not eligible to practice before the IRS as defined at 31 C.F.R. § 10.2(a)(4) during the term of the suspension.

Censured in practice before the IRS—Censure is a public reprimand. Unlike disbarment or suspension, censure does not affect an individual’s eligibility to practice before the IRS, but OPR may subject the individual’s future practice rights to conditions designed to promote high standards of conduct.

Monetary penalty—A monetary penalty may be imposed on an individual who engages in conduct subject to sanction or on an employer, firm, or entity if the individual was acting on its behalf and if it knew, or reasonably should have known, of the individual’s conduct.

Disqualification of appraiser—An appraiser who is disqualified is barred from presenting evidence or testimony in any administrative proceeding before the Department of the Treasury or the IRS.

Under the regulations, attorneys, certified public accountants, enrolled agents, enrolled actuaries, and enrolled retirement plan agents may not assist, or accept assistance from, individuals who are suspended or disbarred with respect to matters constituting practice (i.e., representation) before the IRS, and they may not aid or abet suspended or disbarred individuals to practice before the IRS.

Disciplinary sanctions are described in these terms:

Disbarred by decision, Suspended by decision, Censured by decision, Monetary penalty imposed, and Disqualified after hearing—An administrative law judge (ALJ) either 1) granted the government’s summary judgment motion or 2) conducted an evidentiary hearing upon OPR’s complaint alleging violation of the regulations; and 3) issued a decision imposing one of these sanctions. After 30 days from the issuance of the decision, in the absence of an appeal, the ALJ’s decision became the final agency decision.

Disbarred by default decision, Suspended by default decision, Censured by default decision, Monetary penalty imposed by default decision, and Disqualified by default decision—An ALJ, after finding that no answer to OPR’s complaint had been filed, granted OPR’s motion for a default judgment and issued a decision imposing one of these sanctions.

Disbarment by decision on appeal, Suspended by decision on appeal, Censured by decision on appeal, Monetary penalty imposed by decision on appeal, and Disqualified by decision on appeal—The decision of the ALJ was appealed to the agency appeal authority, acting as the delegate of the Secretary of the Treasury, and the appeal authority issued a decision imposing one of these sanctions.

Disbarred by consent, Suspended by consent, Censured by consent, Monetary penalty imposed by consent, and Disqualified by consent—In lieu of a disciplinary proceeding being instituted or continued, an individual offered a consent to one of these sanctions and OPR accepted the offer. Typically, an offer of consent will provide for: suspension for an indefinite term; conditions that the individual must observe during the suspension; and the individual’s opportunity, after a stated number of months, to file with OPR a petition for reinstatement affirming compliance with the terms of the consent and affirming current eligibility to practice (i.e., an active professional license or active enrollment status).

Suspended indefinitely by decision in expedited proceeding, Suspended indefinitely by default decision in expedited proceeding, Suspended by consent in expedited proceeding—OPR instituted an expedited proceeding for suspension (based on certain limited grounds, including loss of a professional license for cause, and criminal convictions).

OPR has authority to disclose the grounds for disciplinary sanctions in these situations: (1) an ALJ or the Secretary’s delegate on appeal has issued a decision on or after September 26, 2007, which was the effective date of amendments to the regulations that permit making such decisions publicly available; (2) the individual has settled a disciplinary case by signing OPR’s “consent to sanction” form, which requires consenting individuals to admit to one or more violations of the regulations and to consent to the disclosure of the individual’s own return information related to the admitted violations (for example, failure to file Federal income tax returns); or (3) OPR has issued a decision in an expedited proceeding for indefinite suspension.

Announcements of disciplinary sanctions appear in the Internal Revenue Bulletin at the earliest practicable date. The sanctions announced below are alphabetized first by the names of states and second by the last names of individuals. Unless otherwise indicated, section numbers (e.g., § 10.51) refer to the regulations.