irb08 48 by tKxaCAD


									                                                                                            Bulletin No. 2008-48
                                                                                              December 1, 2008

These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.

INCOME TAX                                                         would address certain rights granted by a governmental unit
                                                                   that are related to the lease, ownership, or use of real prop-
T.D. 9430, page 1205.
REG–118327–08, page 1218.
Final, temporary, and proposed regulations under section
6050P of the Code relate to information returns for cancella-      EMPLOYEE PLANS
tion of indebtedness by certain entities. The regulations will
avoid premature information reporting from certain businesses      Notice 2008–105, page 1208.
that are currently required to report and will reduce the number   Weighted average interest rate update; corporate bond
of information returns required to be filed. A public hearing on   indices; 30-year Treasury securities; segment rates.
the proposed regulations is scheduled for March 13, 2009.          This notice contains updates for the corporate bond weighted
                                                                   average interest rate for plan years beginning in November
Rev. Proc. 2008–69, page 1217.                                     2008; the 24-month average segment rates; the funding
This procedure provides real estate investment trusts (REITs)      transitional segment rates applicable for November 2008;
with a method of applying the prohibited transactions safe har-    and the minimum present value transitional rates for October
bor under section 857(b)(6) of the Code for a taxable year that    2008.
begins on or before July 30, 2008, and ends on or after July
31, 2008.                                                          Rev. Proc. 2008–67, page 1211.
                                                                   This document sets forth the procedure by which the sponsor
Announcement 2008–105, page 1219.                                  of a multiemployer pension plan may request and obtain ap-
The Fast Track Settlement (FTS) for TE/GE Taxpayers program        proval of an extension of an amortization period in accordance
is based on the LMSB and SB/SE FTS programs. The existing          with section 431(d) of the Code and section 304(d) of the Em-
FTS programs promote early and timely settlements with tax-        ployee Retirement Income Security Act of 1974 (ERISA). Rev.
payers through the use of alternative dispute resolution tech-     Proc. 2004–44 superseded. Rev. Proc. 2008–4 modified.
niques. The LMSB and SB/SE programs are designed to com-
mence prior to the issuance of the 30-day letter and to reach      Announcement 2008–105, page 1219.
a result within 120 days and 60 days respectively. The TE/GE       The Fast Track Settlement (FTS) for TE/GE Taxpayers program
FTS program will use the same procedures and have a 60-day         is based on the LMSB and SB/SE FTS programs. The existing
period within which to reach settlement.                           FTS programs promote early and timely settlements with tax-
                                                                   payers through the use of alternative dispute resolution tech-
Announcement 2008–115, page 1228.                                  niques. The LMSB and SB/SE programs are designed to com-
This document describes issues that the IRS and Treasury De-       mence prior to the issuance of the 30-day letter and to reach
partment are considering addressing in a notice of proposed        a result within 120 days and 60 days respectively. The TE/GE
rulemaking (REG–130342–08) regarding the definition of an          FTS program will use the same procedures and have a 60-day
interest in real property. The notice of proposed rulemaking       period within which to reach settlement.

                                                                                             (Continued on the next page)

Finding Lists begin on page ii.
EXEMPT ORGANIZATIONS                                               cases that are under the jurisdiction of the Office of Appeals.
                                                                   Rev. Procs. 2002–44 and 2006–44 modified.

Announcement 2008–105, page 1219.                                  Announcement 2008–114, page 1226.
The Fast Track Settlement (FTS) for TE/GE Taxpayers program        This document contains corrections to final regulations under
is based on the LMSB and SB/SE FTS programs. The existing          section 1502 of the Code (T.D. 9424, 2008–44 I.R.B. 1012)
FTS programs promote early and timely settlements with tax-        that provide rules for determining the tax consequences of a
payers through the use of alternative dispute resolution tech-     member’s transfer (including by deconsolidation and worthless-
niques. The LMSB and SB/SE programs are designed to com-           ness) of loss shares of subsidiary stock. The regulations also
mence prior to the issuance of the 30-day letter and to reach      provide that section 362(e)(2) generally does not apply to trans-
a result within 120 days and 60 days respectively. The TE/GE       actions between members of a consolidated group.
FTS program will use the same procedures and have a 60-day
period within which to reach settlement.                           Announcement 2008–116, page 1230.
                                                                   This document cancels a public hearing on proposed regu-
                                                                   lations (REG–102822–08, 2008–38 I.R.B. 744) that provide
EMPLOYMENT TAX                                                     guidance on the manner in which an S corporation reduces its
                                                                   tax attributes under section 108(b) for taxable years in which
                                                                   the S corporation has discharge of indebtedness income that
Announcement 2008–105, page 1219.                                  is excluded from gross income under section 108(a).
The Fast Track Settlement (FTS) for TE/GE Taxpayers program
is based on the LMSB and SB/SE FTS programs. The existing
FTS programs promote early and timely settlements with tax-
payers through the use of alternative dispute resolution tech-
niques. The LMSB and SB/SE programs are designed to com-
mence prior to the issuance of the 30-day letter and to reach
a result within 120 days and 60 days respectively. The TE/GE
FTS program will use the same procedures and have a 60-day
period within which to reach settlement.


Announcement 2008–105, page 1219.
The Fast Track Settlement (FTS) for TE/GE Taxpayers program
is based on the LMSB and SB/SE FTS programs. The existing
FTS programs promote early and timely settlements with tax-
payers through the use of alternative dispute resolution tech-
niques. The LMSB and SB/SE programs are designed to com-
mence prior to the issuance of the 30-day letter and to reach
a result within 120 days and 60 days respectively. The TE/GE
FTS program will use the same procedures and have a 60-day
period within which to reach settlement.


Announcement 2008–110, page 1224.
This announcement will extend the test of the Fast Track Settle-
ment (FTS) for SB/SE Taxpayers Pilot Program for an additional
two years to further evaluate the program and seek additional
cases for fast track settlement.

Announcement 2008–111, page 1224.
This announcement modifies Revenue Procedures 2002–44,
2002–2 C.B. 10, and 2006–44, 2006–2 C.B. 800, by estab-
lishing a two-year test of the mediation and arbitration proce-
dures for Offer in Compromise and Trust Fund Recovery Penalty

December 1, 2008                                                                                              2008–48 I.R.B.
The IRS Mission
Provide America’s taxpayers top quality service by helping them                   the tax law with integrity and fairness to all.
understand and meet their tax responsibilities and by applying

The Internal Revenue Bulletin is the authoritative instrument of                  court decisions, rulings, and procedures must be considered,
the Commissioner of Internal Revenue for announcing official                      and Service personnel and others concerned are cautioned
rulings and procedures of the Internal Revenue Service and for                    against reaching the same conclusions in other cases unless
publishing Treasury Decisions, Executive Orders, Tax Conven-                      the facts and circumstances are substantially the same.
tions, legislation, court decisions, and other items of general
interest. It is published weekly and may be obtained from the
                                                                                  The Bulletin is divided into four parts as follows:
Superintendent of Documents on a subscription basis. Bulletin
contents are compiled semiannually into Cumulative Bulletins,
which are sold on a single-copy basis.                                            Part I.—1986 Code.
                                                                                  This part includes rulings and decisions based on provisions of
It is the policy of the Service to publish in the Bulletin all sub-               the Internal Revenue Code of 1986.
stantive rulings necessary to promote a uniform application of
the tax laws, including all rulings that supersede, revoke, mod-                  Part II.—Treaties and Tax Legislation.
ify, or amend any of those previously published in the Bulletin.                  This part is divided into two subparts as follows: Subpart A,
All published rulings apply retroactively unless otherwise indi-                  Tax Conventions and Other Related Items, and Subpart B, Leg-
cated. Procedures relating solely to matters of internal man-                     islation and Related Committee Reports.
agement are not published; however, statements of internal
practices and procedures that affect the rights and duties of
taxpayers are published.                                                          Part III.—Administrative, Procedural, and Miscellaneous.
                                                                                  To the extent practicable, pertinent cross references to these
                                                                                  subjects are contained in the other Parts and Subparts. Also
Revenue rulings represent the conclusions of the Service on the                   included in this part are Bank Secrecy Act Administrative Rul-
application of the law to the pivotal facts stated in the revenue                 ings. Bank Secrecy Act Administrative Rulings are issued by
ruling. In those based on positions taken in rulings to taxpayers                 the Department of the Treasury’s Office of the Assistant Secre-
or technical advice to Service field offices, identifying details                 tary (Enforcement).
and information of a confidential nature are deleted to prevent
unwarranted invasions of privacy and to comply with statutory
requirements.                                                                     Part IV.—Items of General Interest.
                                                                                  This part includes notices of proposed rulemakings, disbar-
                                                                                  ment and suspension lists, and announcements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be                        The last Bulletin for each month includes a cumulative index
relied on, used, or cited as precedents by Service personnel in                   for the matters published during the preceding months. These
the disposition of other cases. In applying published rulings and                 monthly indexes are cumulated on a semiannual basis, and are
procedures, the effect of subsequent legislation, regulations,                    published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402.

2008–48 I.R.B.                                                                                                                  December 1, 2008
December 1, 2008   2008–48 I.R.B.
Part I. Rulings and Decisions Under the Internal Revenue Code
of 1986
Section 431.—Minimum                                 FOR    FURTHER           INFORMATION           ment Act of 1996, Public Law 104–134
Funding Standards for                                CONTACT: Barbara Pettoni at (202)              (110 Stat. 1321, 368–369 (1996)) (the
Multiemployer Plans                                  622–4910 (not a toll-free number).             1996 Act), expanded section 6050P
                                                                                                    to cover any executive, judicial, or
  A revenue procedure sets forth the procedure by    SUPPLEMENTARY INFORMATION:                     legislative agency (as defined in 31 U.S.C.
which the sponsor of a multiemployer pension plan
                                                                                                    3701(a)(4)) as well as any applicable
may request and obtain approval of an extension of   Background
an amortization period in accordance with section                                                   financial entity.    The 1996 Act was
431(d). See Rev. Proc. 2008-67, page 1211.               This document contains amendments to       effective April 26, 1996. The Ticket to
                                                     the Income Tax Regulations (26 CFR part        Work and Work Incentives Improvement
                                                     1) under section 6050P relating to informa-    Act of 1999, Public Law 106–170
Section 6050P.—Returns                                                                              (113 Stat.     1860, 1931 (1999)) (the
                                                     tion reporting for cancellation of indebt-
Relating to the Cancellation                                                                        1999 Act), further expanded section
                                                     edness by certain entities. The amend-
of Indebtedness by Certain                           ments will reduce the number of informa-       6050P by expanding the definition of
Entities                                             tion reports required to be filed under sec-   “applicable financial entity” to include
                                                     tion 6050P.                                    any organization “a significant trade
26 CFR 1.6050P–1: Information reporting for dis-
charges of indebtedness by certain entities.             In general, section 6050P requires cer-    or business of which is the lending of
                                                     tain entities to file information returns      money.” The 1999 Act was effective for
T.D. 9430                                            with the IRS, and to furnish information       discharges of indebtedness occurring after
                                                     statements to debtors, reporting discharges    December 31, 1999.
DEPARTMENT OF THE                                    of indebtedness of $600 or more. As orig-         In 2002, the IRS and the Treasury De-
                                                     inally enacted by the Omnibus Budget           partment published proposed regulations
                                                     Reconciliation Act of 1993, Public Law         to reflect the changes to section 6050P.
Internal Revenue Service                                                                            See REG–107524–00, 2002–2 C.B. 110
                                                     103–66 (107 Stat. 312, 531–532 (1993)),
26 CFR Part 1                                        section 6050P applied solely to “appli-        [67 Fed Reg 40629] (June 13, 2002).
                                                     cable financial entities,” which was then      The IRS received written (including
Information Reporting for                            defined to include only financial institu-     electronic) comments on the proposed
Discharges of Indebtedness                           tions, credit unions, and Federal executive    regulations and a public hearing was held
                                                     agencies.                                      on October 8, 2002. After consideration
AGENCY: Internal Revenue Service                         In 1996, final regulations were pub-       of the comments received, the IRS
(IRS), Treasury.                                     lished implementing section 6050P. See         adopted the proposed regulations with
                                                     T.D. 8654, 1996–1 C.B. 298 [61 FR 262]         amendments. See T.D. 9160, 2004–2 C.B.
ACTION: Final and temporary regula-                                                                 785 [69 FR 62181] (October 25, 2004)
tions.                                               (January 4, 1996) (the 1996 regulations).
                                                     The 1996 regulations required applica-         (the 2004 regulations). Section 1.6050P–2
                                                     ble financial entities, as then defined, to    of the 2004 regulations describes the
SUMMARY: This document contains fi-
                                                     issue Forms 1099–C, “Cancellation of           circumstances in which an organization
nal and temporary regulations relating to
                                                     Debt,” upon the occurrence of one of           has a significant trade or business of
information returns for cancellation of in-
                                                     several “identifiable events” as provided      lending money, thereby triggering an
debtedness by certain entities. The tem-
                                                     in §1.6050P–1(b)(2)(i)(A) through (H).         information reporting requirement when it
porary regulations will avoid premature
                                                     One of these identifiable events requiring     cancels debt.
information reporting from certain busi-
nesses that are currently required to report         the issuance of a Form 1099–C was the
                                                                                                    Reasons for Change
and will reduce the number of information            expiration of a “non-payment testing pe-
returns required to be filed. The tempo-             riod” pursuant to §1.6050P–1(b)(2)(i)(H).         The 36-month rule of §1.6050P–
rary regulations will impact certain lenders         The 1996 regulations created a rebut-          1(b)(2)(iv) was drafted at a time when
who are currently required to file infor-            table presumption (the “36-month rule”)        section 6050P applied only to financial
mation returns under the existing regula-            under §1.6050P–1(b)(2)(iv) that this pe-       institutions, credit unions, and Federal
tions. The text of these temporary regula-           riod expired if a creditor had not re-         executive agencies and did not extend
tions also serves as the text of the proposed        ceived a payment for 36 months. Section        to any executive, judicial, or legislative
regulations (REG–118327–08) as set forth             1.6050P–1(b)(2)(iv) provides that the          agency or any organization “a significant
in this issue of the Bulletin.                       presumption that an identifiable event oc-     trade or business of which is the lending
                                                     curred can be rebutted by a creditor if the    of money.” Since the publication of the
DATES: Effective Date: These regulations             creditor had engaged in significant, bona      2004 regulations, commenters have raised
are effective on November 10, 2008.                  fide collection activity.                      the concern that the application of the
   Applicability Date: For dates of appli-               After the issuance of the 1996 reg-        36-month rule to entities with a significant
cability, see §1.6050P–1T(h).                        ulations, the Debt Collection Improve-

2008–48 I.R.B.                                                        1205                                           December 1, 2008
trade or business of lending money might        temporary regulations avoid premature                Authority: 26 U.S.C. 7805 * * *
trigger a reporting requirement even when       information reporting from certain entities          Par. 2. Section 1.6050P–0 is amended
the entity has not legally or practically       that are currently required to report under      as follows:
discharged the debt. The IRS and the            section 6050P. Notwithstanding this limi-            1. The introductory text is revised.
Treasury Department agree that it is            tation, the temporary regulations provide            2. A new entry for §1.6050P–1(b)(2)(v)
appropriate to limit the application of the     that, in the case of an entity previously        is added.
36-month rule to the entities for which         subject to the 36-month rule that was re-            3. The entry for §1.6050P–1(h) is re-
it was originally intended in order to          quired to file information returns in a tax      vised.
avoid premature information reporting           year prior to 2008 due to application of             4. A new entry for §1.6050P–1T is
of cancellation of indebtedness income.         the 36-month rule, and who failed to so          added.
Doing so will reduce the information            file, the date of discharge is the first iden-       The revisions and additions read as fol-
reporting burden on entities that were          tifiable event, if any, described in section     lows:
not originally within the scope of the          1.6050P–1(b)(2)(i)(A) through (G) that
36-month rule and will protect debtors          occurs after 2007. Thus, any entity pre-         §1.6050P–0. Table of contents.
from receiving information returns              viously subject to the 36-month rule that
                                                                                                    This section lists the major captions that
that prematurely report cancellation of         has never filed an information return re-
                                                                                                 appear in §1.6050P–1, §1.6050P–1T, and
indebtedness income from such entities.         mains subject to the information reporting
    The Treasury Department and IRS are         requirement upon the occurrence of any of
still considering other comments received       the other identifiable events.                   *****
since the publication of the 2004 regula-
tions, including a request to clarify the       Special Analyses                                 1.6050P–1 Information reporting for
meaning of “stated principal” in section                                                         discharges of indebtedness by certain
                                                    It has been determined that this Trea-       entities.
1.6050P–1(c) and (d)(3) when it is ap-
                                                sury decision is not a significant regula-
plied to those who acquire a loan from                                                              (b) * * *
                                                tory action as defined in Executive Order
a person other than the debtor. Section                                                             (2) * * *
                                                12866. Therefore, a regulatory assessment
1.6050P–1(c) provides that “indebted-                                                               (v) [Reserved]. For further guidance,
                                                is not required. It also has been determined
ness” for purposes of section 6050P means                                                        see the entry for §1.6050P–1T(b)(2)(v).
                                                that section 553(b) of the Administrative
any amount owed to an applicable entity,
                                                Procedure Act (5 U.S.C. chapter 5) does          *****
including stated principal, fees, stated in-
                                                not apply to these regulations.                    (h) Effective/applicability date.
terest, penalties, administrative costs, and
                                                    For the applicability of the Regulatory
fines. Section 1.6050P–1(d)(3) further                                                           *****
                                                Flexibility Act (5 U.S.C. chapter 6) refer
provides that, in the case of a lending
                                                to the Special Analyses section of the pre-      §1.6050P–1T Information reporting for
transaction, the discharge of an amount
                                                amble to the cross-reference notice of pro-      discharges of indebtedness by certain
other than stated principal is not required
                                                posed rulemaking published in this issue of      entities (temporary).
to be reported under section 6050P. Com-
                                                the Bulletin. Pursuant to section 7805(f)
menters have stated that it is unclear
                                                of the Internal Revenue Code, these reg-            (b) * * *
whether the simplifying rule limiting an
                                                ulations have been submitted to the Chief           (2) * * *
information report to the amount of stated
                                                Counsel for Advocacy of the Small Busi-             (v) Special rule for certain entities re-
principal can be applied to loan acquir-
                                                ness Administration for comment on its           quired to file in a year prior to 2008.
ers. Commenters have asserted that loan
                                                impact on small business.
acquirers might know only the aggregate                                                          *****
amount due on the loans they are purchas-       Drafting Information                                Par. 3. Section 1.6050P–1 is amended
ing, not the breakdown of that amount                                                            as follows:
into principal and accrued interest or fees.       The principal author of these temporary          1. Paragraph (b)(2)(i)(H) and the head-
Therefore, if loan acquirers discharge an       regulations is Barbara Pettoni, Office of        ing for paragraph (h) are revised.
aggregate amount, it is difficult for them to   Associate Chief Counsel (Procedure and              2. A new entry for (b)(2)(v) is added.
determine how much is required to be re-        Administration).                                    The addition and revisions read as fol-
ported under section 6050P. The Treasury                                                         lows:
Department and IRS are considering issu-
ing future guidance under section 6050P                                                          §1.6050P–1 Information reporting for
                                                Amendments to the Regulations
to address these concerns.                                                                       discharges of indebtedness by certain
                                                   Accordingly, 26 CFR part 1 is amended         entities.
Explanation of Provisions                       as follows:
   The temporary regulations and amend-         PART 1—INCOME TAXES                                 (b) * * * (2) * * *
ments to existing regulations limit the                                                             (i) * * *
application of the 36-month rule to the            Paragraph 1. The authority citation for          (H) [Reserved]. For further guidance,
entities described in the 1993 Act. The         part 1 continues to read in part as follows:     see §1.6050P–1T(b)(2)(i)(H).

December 1, 2008                                                  1206                                                  2008–48 I.R.B.
*****                                            to discharges of indebtedness after Decem-                    test of the mediation and arbitration procedures
   (v) [Reserved]. For further guidance,         ber 21, 1996, except paragraphs (e)(1) and                    for Offer in Compromise (OIC) and Trust Fund
see §1.6050P–1T(b)(2)(v).                        (e)(3) of this section, which apply to dis-                   Recovery Penalty (TFRP) cases that are under the
                                                                                                               jurisdiction of the Office of Appeals. See Announce-
*****                                            charges of indebtedness after December
                                                                                                               ment 2008-111, page 1224.
   (h) Effective/applicability date. * * *       31, 1994, except paragraph (e)(5) of this
   Par. 4. Section 1.6050P–1T is added to        section, which applies to discharges of in-
read as follows:                                 debtedness occurring after December 31,                       Section 7122.—Com-
                                                 2004, and except paragraphs (b)(2)(i)(H)                      promises
§1.6050P–1T Information reporting for            and (b)(2)(v) of this section, which apply
                                                                                                                  An announcement modifies Revenue Procedure
discharges of indebtedness by certain            to discharges of indebtedness occurring af-
                                                                                                               2002-44, 2002-2 C.B. 10, and Revenue Procedure
entities (temporary).                            ter November 10, 2008.                                        2006-44, 2006-2 C.B. 800, by establishing a two-year
                                                     (2) [Reserved]. For further guidance,                     test of the mediation and arbitration procedures
    (a) through (b)(2)(i)(G) [Reserved].         see §1.6050P–1(h)(2).                                         for Offer in Compromise (OIC) and Trust Fund
For further guidance, see §1.6050P–1(a)              (i) Expiration date. The applicability                    Recovery Penalty (TFRP) cases that are under the
through (b)(2)(i)(G).                            of this section will expire on or before                      jurisdiction of the Office of Appeals. See Announce-
    (H) In the case of an entity described       November 7, 2011.                                             ment 2008-111, page 1224.
in section 6050P(c)(2)(A) through (C), the
expiration of the non-payment testing pe-                                        Linda E. Stiff,               Section 7123.—Appeals
riod, as described in §1.6050P–1(b)(2)(iv).                           Deputy Commissioner for                  Dispute Resolution
    (b)(2)(ii) through (iv) [Reserved]. For                           Services and Enforcement.                Procedures
further guidance, see §1.6050P–1(b)(2)(ii)
through (iv).                                    Approved October 28, 2008.                                       An announcement modifies Revenue Procedure
    (v) Special rule for certain entities re-                                                                  2002-44, 2002-2 C.B. 10, and Revenue Procedure
quired to file in a year prior to 2008. In                                       Eric Solomon,                 2006-44, 2006-2 C.B. 800, by establishing a two-year
the case of an entity described in section                                Assistant Secretary of               test of the mediation and arbitration procedures
                                                                       the Treasury (Tax Policy).              for Offer in Compromise (OIC) and Trust Fund
6050P(c)(1)(A) or (c)(2)(D) required to                                                                        Recovery Penalty (TFRP) cases that are under the
file an information return in a tax year         (Filed by the Office of the Federal Register on November 7,   jurisdiction of the Office of Appeals. See Announce-
prior to 2008 due to an identifiable event       2008, 8:45 a.m., and published in the issue of the Federal    ment 2008-111, page 1224.
                                                 Register for November 10, 2008, 73 F.R. 66539)
described in paragraph (b)(2)(i)(H), and
who failed to so file, the date of discharge
is the first event, if any, described in para-
graphs (b)(2)(i)(A) through (G) of this
                                                 Section 6672.—Failure
section that occurs after 2007.
                                                 to Collect and Pay Over
    (b)(3) through (g) [Reserved]. For
                                                 Tax, or Attempt to Evade
further guidance, see §1.6050P–1(b)(3)           or Defeat Tax
through (g).                                       An announcement modifies Revenue Procedure
    (h) Effective/applicability date—(1) In      2002-44, 2002-2 C.B. 10, and Revenue Procedure
general. The rules in this section apply         2006-44, 2006-2 C.B. 800, by establishing a two-year

2008–48 I.R.B.                                                          1207                                                       December 1, 2008
Part III. Administrative, Procedural, and Miscellaneous
Update for Weighted Average                    imum present value segment rates under         and the resulting permissible range of in-
Interest Rates, Yield Curves,                  § 417(e)(3)(D) as in effect for plan years     terest rates used to calculate current liabil-
and Segment Rates                              beginning after 2007.                          ity. That notice establishes that the corpo-
                                                                                              rate bond weighted average is based on the
                                               CORPORATE BOND WEIGHTED                        monthly composite corporate bond rate de-
Notice 2008–105                                AVERAGE INTEREST RATE                          rived from designated corporate bond in-
                                                                                              dices. The methodology for determining
   This notice provides guidance as to the        Sections 412(b)(5)(B)(ii) and 412(l)
                                                                                              the monthly composite corporate bond rate
corporate bond weighted average interest       (7)(C)(i), as amended by the Pension
                                                                                              as set forth in Notice 2004–34 continues to
rate and the permissible range of interest     Funding Equity Act of 2004 and by the
                                                                                              apply in determining that rate. See Notice
rates specified under § 412(b)(5)(B)(ii)(II)   Pension Protection Act of 2006 (PPA),
                                                                                              2006–75, 2006–2 C.B. 366.
of the Internal Revenue Code as in ef-         provide that the interest rates used to
                                                                                                  The composite corporate bond rate for
fect for plan years beginning before 2008.     calculate current liability and to determine
                                                                                              October 2008 is 7.90 percent. Pursuant
It also provides guidance on the corpo-        the required contribution under § 412(l)
                                                                                              to Notice 2004–34, the Service has de-
rate bond monthly yield curve (and the         for plan years beginning in 2004 through
                                                                                              termined this rate as the average of the
corresponding spot segment rates), the         2007 must be within a permissible range
                                                                                              monthly yields for the included corporate
24-month average segment rates, and            based on the weighted average of the
                                                                                              bond indices for that month.
the funding transitional segment rates         rates of interest on amounts invested
                                                                                                  The following corporate bond weighted
under § 430(h)(2). In addition, this no-       conservatively in long term investment
                                                                                              average interest rate was determined for
tice provides guidance as to the interest      grade corporate bonds during the 4-year
                                                                                              plan years beginning in the month shown
rate on 30-year Treasury securities un-        period ending on the last day before the
der § 417(e)(3)(A)(ii)(II) as in effect for    beginning of the plan year.
plan years beginning before 2008, the             Notice 2004–34, 2004–1 C.B. 848, pro-
30-year Treasury weighted average rate         vides guidelines for determining the cor-
under § 431(c)(6)(E)(ii)(I), and the min-      porate bond weighted average interest rate

                   For Plan Years                          Corporate
                    Beginning in                         Bond Weighted                           Permissible Range
                 Month           Year                       Average                           90%         to       100%
               November          2008                          6.20                           5.58                 6.20

YIELD CURVE AND SEGMENT                        (“segment rates”), each of which applies       monthly corporate bond yield curve, the
RATES                                          to cash flows during specified periods.        24-month average corporate bond seg-
                                               However, an election may be made under         ment rates, and the funding transitional
    Generally for plan years beginning         § 430(h)(2)(D)(ii) to use the monthly yield    segment rates used to compute the tar-
after 2007 (except for delayed effective       curve in place of the segment rates. For       get normal cost and the funding target.
dates for certain plans under sections 104,    plan years beginning in 2008 and 2009, a       Pursuant to Notice 2007–81, the monthly
105, and 106 of PPA), § 430 of the Code        transitional rule under § 430(h)(2)(G) pro-    corporate bond yield curve derived from
specifies the minimum funding require-         vides that the segment rates are blended       October 2008 data is in Table I at the end
ments that apply to single employer plans      with the corporate bond weighted average       of this notice. The spot first, second, and
pursuant to § 412. Section 430(h)(2) spec-     as specified above. An election may be         third segment rates for the month of Oc-
ifies the interest rates that must be used     made under § 430(h)(2)(G)(iv) to use the       tober 2008 are, respectively, 7.35, 8.61,
to determine a plan’s target normal cost       segment rates without applying the transi-     and 7.26. The three 24-month average
and funding target. Under this provision,      tional rule.                                   corporate bond segment rates applicable
present value is generally determined us-         Notice 2007–81, 2007–44 I.R.B. 899,         for November 2008 under the election of
ing three 24-month average interest rates      provides guidelines for determining the        § 430(h)(2)(G)(iv) are as follows:

                           First                                Second                                   Third
                         Segment                                Segment                                 Segment
                          5.17                                    6.28                                     6.62

December 1, 2008                                                1208                                                  2008–48 I.R.B.
   The transitional segment rates under       bond weighted average of 6.20 stated
§ 430(h)(2)(G) applicable for November        above, are as follows:
2008, taking into account the corporate

               For Plan Years                      First                        Second                         Third
                Beginning in                     Segment                        Segment                       Segment
                    2008                           5.86                           6.23                          6.34
                    2009                           5.51                           6.25                          6.48

30-YEAR TREASURY SECURITIES                   rate of interest on 30-year Treasury secu-     amount for the full-funding limitation
INTEREST RATES                                rities as specified by the Commissioner        described in section 431(c)(6)(A), based
                                              for that month in revenue rulings, notices     on the plan’s current liability. Section
   Section 417(e)(3)(A)(ii)(II) (prior to     or other guidance published in the Internal    431(c)(6)(E)(ii)(I) provides that the inter-
amendment by PPA) defines the appli-          Revenue Bulletin.                              est rate used to calculate current liability
cable interest rate, which must be used           The rate of interest on 30-year Treasury   for this purpose must be no more than 5
for purposes of determining the minimum       securities for October 2008 is 4.17 percent.   percent above and no more than 10 percent
present value of a participant’s benefit      The Service has determined this rate as the    below the weighted average of the rates of
under § 417(e)(1) and (2), as the annual      monthly average of the daily determina-        interest on 30-year Treasury securities dur-
rate of interest on 30-year Treasury se-      tion of yield on the 30-year Treasury bond     ing the four-year period ending on the last
curities for the month before the date        maturing in May 2038.                          day before the beginning of the plan year.
of distribution or such other time as the         Generally for plan years beginning         Notice 88–73, 1988–2 C.B. 383, provides
Secretary may by regulations prescribe.       after 2007, § 431 specifies the mini-          guidelines for determining the weighted
Section 1.417(e)–1(d)(3) of the Income        mum funding requirements that apply to         average interest rate. The following rates
Tax Regulations provides that the applica-    multiemployer plans pursuant to § 412.         were determined for plan years beginning
ble interest rate for a month is the annual   Section 431(c)(6)(B) specifies a minimum       in the month shown below.

                   For Plan Years                          Treasury
                    Beginning in                           Weighted                             Permissible Range
                Month           Year                       Average                           90%        to       105%
              November          2008                          4.68                           4.21                4.91

MINIMUM PRESENT VALUE                         24-month average. For plan years begin-        ing the minimum present value segment
SEGMENT RATES                                 ning in 2008 through 2011, the applica-        rates. Pursuant to that notice, the min-
                                              ble interest rate is the monthly spot seg-     imum present value transitional segment
   Generally for plan years beginning af-     ment rate blended with the applicable rate     rates determined for October 2008, tak-
ter December 31, 2007, the applicable in-     under § 417(e)(3)(A)(ii)(II) as in effect      ing into account the October 2008 30-year
terest rates under § 417(e)(3)(D) are seg-    for plan years beginning in 2007. Notice       Treasury rate of 4.17 stated above, are as
ment rates computed without regard to a       2007–81 provides guidelines for determin-      follows:

               For Plan Years                      First                        Second                         Third
                Beginning in                     Segment                        Segment                       Segment
                    2008                           4.81                           5.06                          4.79
                    2009                           5.44                           5.95                          5.41

DRAFTING INFORMATION                          Tax Exempt and Government Entities Di-
                                              vision. Mr. Montanaro may be e-mailed at
  The principal author of this notice is
Tony Montanaro of the Employee Plans,

2008–48 I.R.B.                                                 1209                                           December 1, 2008
                                                 Table I
                                   Monthly Yield Curve for October 2008
    Maturity   Yield   Maturity   Yield      Maturity   Yield      Maturity   Yield   Maturity   Yield
       0.5     5.45     20.5      8.11         40.5     7.17         60.5     6.87      80.5     6.72
       1.0     6.19     21.0      8.06         41.0     7.15         61.0     6.86      81.0     6.72
       1.5     6.83     21.5      8.02         41.5     7.14         61.5     6.86     81.5      6.71
       2.0     7.32     22.0      7.97         42.0     7.13         62.0     6.85      82.0     6.71
       2.5     7.64     22.5      7.93         42.5     7.12         62.5     6.85      82.5     6.71
       3.0     7.83     23.0      7.89         43.0     7.11         63.0     6.85      83.0     6.71
       3.5     7.95     23.5      7.85         43.5     7.10         63.5     6.84      83.5     6.70
       4.0     8.03     24.0      7.81         44.0     7.09         64.0     6.84      84.0     6.70
       4.5     8.11     24.5      7.77         44.5     7.09         64.5     6.83      84.5     6.70
       5.0     8.18     25.0      7.74         45.0     7.08         65.0     6.83      85.0     6.70
       5.5     8.25     25.5      7.71         45.5     7.07         65.5     6.82      85.5     6.69
       6.0     8.33     26.0      7.68         46.0     7.06         66.0     6.82      86.0     6.69
       6.5     8.41     26.5      7.65         46.5     7.05         66.5     6.81      86.5     6.69
       7.0     8.50     27.0      7.62         47.0     7.04         67.0     6.81      87.0     6.69
       7.5     8.57     27.5      7.59         47.5     7.03         67.5     6.81     87.5      6.68
       8.0     8.65     28.0      7.57         48.0     7.03         68.0     6.80     88.0      6.68
       8.5     8.71     28.5      7.54         48.5     7.02         68.5     6.80      88.5     6.68
       9.0     8.77     29.0      7.52         49.0     7.01         69.0     6.80      89.0     6.68
       9.5     8.81     29.5      7.50         49.5     7.00         69.5     6.79      89.5     6.67
      10.0     8.85     30.0      7.48         50.0     7.00         70.0     6.79      90.0     6.67
      10.5     8.87     30.5      7.46         50.5     6.99         70.5     6.78      90.5     6.67
      11.0     8.89     31.0      7.44         51.0     6.98         71.0     6.78      91.0     6.67
      11.5     8.89     31.5      7.42         51.5     6.97         71.5     6.78      91.5     6.67
      12.0     8.89     32.0      7.40         52.0     6.97         72.0     6.77      92.0     6.66
      12.5     8.87     32.5      7.39         52.5     6.96         72.5     6.77      92.5     6.66
      13.0     8.85     33.0      7.37         53.0     6.95         73.0     6.77      93.0     6.66
      13.5     8.82     33.5      7.35         53.5     6.95         73.5     6.76     93.5      6.66
      14.0     8.79     34.0      7.34         54.0     6.94         74.0     6.76      94.0     6.66
      14.5     8.74     34.5      7.32         54.5     6.94         74.5     6.76      94.5     6.65
      15.0     8.70     35.0      7.31         55.0     6.93         75.0     6.75      95.0     6.65
      15.5     8.65     35.5      7.29         55.5     6.92         75.5     6.75      95.5     6.65
      16.0     8.60     36.0      7.28         56.0     6.92         76.0     6.75      96.0     6.65
      16.5     8.54     36.5      7.26         56.5     6.91         76.5     6.74      96.5     6.65
      17.0     8.49     37.0      7.25         57.0     6.91         77.0     6.74      97.0     6.64
      17.5     8.43     37.5      7.24         57.5     6.90         77.5     6.74      97.5     6.64
      18.0     8.38     38.0      7.22         58.0     6.89         78.0     6.73      98.0     6.64
      18.5     8.32     38.5      7.21         58.5     6.89         78.5     6.73      98.5     6.64
      19.0     8.27     39.0      7.20         59.0     6.88         79.0     6.73      99.0     6.64
      19.5     8.22     39.5      7.19         59.5     6.88         79.5     6.73     99.5      6.63
      20.0     8.16     40.0      7.18         60.0     6.87         80.0     6.72     100.0     6.63

December 1, 2008                                 1210                                     2008–48 I.R.B.
26 CFR 601.201: Rulings and determination letters.   party described in section 4001(a)(21) of             The user fee required by Rev. Proc.
(Also: Part I, § 431.)                               ERISA.                                            2008–8, 2008–1 I.R.B. 233, or its succes-
                                                        Before amendment by PPA, § 412(e)              sors, must be sent with such requests.
Rev. Proc. 2008–67                                   of the Code and § 304(a) of ERISA pro-                .03 Necessary Procedural Docu-
                                                     vided that the period of years required to        ments.—A request will not be considered
                                                     amortize any unfunded liability of any plan       unless it complies with (1) and (2) below.
                                                     may, upon application by the plan spon-               (1) The request must contain a decla-
   This revenue procedure describes the              sor, be extended for a period up to 10            ration in the following form: “Under the
procedure by which the plan sponsor of a             years. Those provisions were replaced             penalties of perjury, I declare that I have
multiemployer pension plan may request               with new § 431(d) of the Code and new             examined this request, including accom-
and obtain approval of an extension of               section 304(d) of ERISA, effective for plan       panying documents, and to the best of my
an amortization period in accordance with            years starting after December 31, 2007.           knowledge and belief, the facts presented
§ 431(d) of the Internal Revenue Code of                Effective for plan years starting after        in support of the request are true, correct,
1986 (Code).                                         December 31, 2007, there is no provision          and complete.” This declaration must be
                                                     in the Code for single employer plans to          signed by an authorized trustee who is a
SECTION 2. BACKGROUND                                receive an extension of the amortization          current member of the Board. The signa-
INFORMATION                                          period for any unfunded liability.                ture of an individual with a power of attor-
                                                                                                       ney will not suffice for the declaration. See
    .01 Statute—Section 431(d) was added             SECTION 3. APPLICATIONS TO                        § 9.02(13) of Rev. Proc. 2008–4.
to the Code as part of a significant revi-           EXTEND AN AMORTIZATION                                (2) Because an application for an ex-
sion of the funding rules for qualified pen-         PERIOD — IN GENERAL                               tension constitutes a request for a ruling,
sion plans under § 401(a) made by the Pen-                                                             compliance with § 6110 is also required.
sion Protection Act of 2006 (PPA). Parallel              .01 Who may submit—A request for ap-          Section 601.201 of the Statement of Pro-
provisions to § 431(d) can be found at sec-          proval to extend the period of years re-          cedural Rules sets forth the requirements
tion 304(d) of the Employee Retirement               quired to amortize any unfunded liabil-           applicable to requests for rulings and de-
Income Security Act of 1974 (ERISA).                 ity must be submitted by the plan spon-           termination letters which are subject to
The Secretary of the Treasury has inter-             sor (i.e., the board of trustees of the plan,     § 6110. Section 601.201(e) furnishes spe-
pretive and enforcement jurisdiction over            and referred to in this revenue procedure         cific instructions to applicants.
both provisions.                                     as the applicant, or Board) or by an autho-           The applicant must provide with the
    Section 431(d)(1) provides that if the           rized representative of the applicant. The        request either a statement of proposed
plan sponsor of a multiemployer plan sub-            request must be signed by an authorized           deletions and the statutory basis for each
mits to the Secretary of the Treasury an             trustee who is a current member of the            proposed deletion, or a statement that no
application for an extension of the amor-            Board or by an authorized representative          information other than names, addresses,
tization period for any unfunded liability,          of the applicant who either must be identi-       and taxpayer identifying numbers need be
and includes the certification by the plan’s         fied in (a), (b), or (c) of subsection 9.02(11)   deleted.
actuary described in § 431(d)(1)(B), the             of Rev. Proc. 2008–4, 2008–1 I.R.B. 121,              .04 Notification.—The applicant must
Secretary shall extend the amortization              or must be an enrolled actuary within the         provide a copy of a written notification to
period for the period (not in excess of 5            meaning of § 7701(a)(35). Where an au-            each employee organization representing
years) requested in the application. An              thorized representative signs the request or      employees covered by the plan, to each
extension under § 431(d)(1) is referred              will appear before the Service in connec-         contributing employer, and to each par-
to as an automatic extension. In addi-               tion with the request, a Form 2848, Power         ticipant, beneficiary, and alternate payee
tion, § 431(d)(2)(A) provides that the plan          of Attorney and Declaration of Represen-          of the plan, that an application for an ex-
sponsor of a multiemployer plan may sub-             tative, must be submitted with the request.       tension of the amortization period under
mit an application for an extension of the           An individual is not an authorized repre-         § 431(d) has been submitted to the Ser-
amortization period for an unfunded lia-             sentative of the applicant merely on ac-          vice. The original of this notice must bear
bility, and the Secretary may extend the             count of being an administrator or trustee        a signature by an authorized trustee who is
amortization period for a period of time             of the plan.                                      a current member of the Board and must
not in excess of 10 years less the num-                  .02 Submission.—Applications to ex-           be in substantially the form set forth in the
ber of years of any automatic extension              tend an amortization period must be sub-          Model Notice found in the Appendix A to
with respect to such unfunded liability,             mitted to:                                        this revenue procedure. The Service does
if the Secretary makes the determination                                                               not require the applicant to furnish any in-
                                                        Employee Plans
described in § 431(d)(2)(B). An exten-                                                                 formation in addition to that required by
                                                        Internal Revenue Service
sion under § 431(d)(2) is referred to as an                                                            the Model Notice in the Appendix A to
                                                        Commissioner, TE/GE
alternative extension. Section 431(d)(3)                                                               plan participants, beneficiaries, alternate
                                                        Attention: SE:T:EP:RA
requires that an applicant provide notice                                                              payees, or employee organizations as part
                                                        P.O. Box 27063
of the extension request to each affected                                                              of the extension application process, but
                                                        McPherson Station
                                                                                                       additional information may, of course, be
                                                        Washington, D.C. 20038

2008–48 I.R.B.                                                          1211                                            December 1, 2008
provided by the applicant pursuant to the       section 4.01 below (including the actuarial      accordance with § 3.04 this revenue pro-
collective bargaining process or otherwise.     certification described in section 4.01(4)),     cedure.
    The notice must be hand-delivered or        the information required in section 5.01            .02 Ruling.—Upon receipt of the appli-
mailed to the last known address of each        below and a completed copy of the check-         cation with the necessary information, and
employee organization, participant, ben-        list that appears as Appendix B of this          verification that the criteria stated above
eficiary, and alternate payee (within the       revenue procedure. Such a combined ap-           have been met, the Secretary shall issue
meaning of § 414(p)(8)) within 14 days          plication will be considered a single ruling     a statement to the applicant providing ap-
prior to the date of the application. Alter-    request. If the applicant requests both          proval for the requested extension.
natively, the notice may be delivered elec-     types of extensions in a single application,        .03 Applicable Period.—The proce-
tronically in accordance with the require-      the Service may approve the automatic ex-        dures of this § 4 shall not apply with
ments of § 1.401(a)–21 of the Income Tax        tension without approving the alternative        respect to any application submitted after
Regulations. Merely posting the notice on       extension.                                       December 31, 2014, in accordance with
a bulletin board is not sufficient to satisfy       .07 Interim Effect of Applica-               § 431(d)(1)(C).
this notice requirement. If the applicant       tion.—Whether the Service has ruled on
makes a reasonable effort to carry out the      the application does not affect the 90 day       SECTION 5—APPLICATION FOR
provisions of this paragraph, then failure      deadline for certification under § 432(b)(3)     ALTERNATIVE EXTENSION
of an employee organization, participant,       of the Code. In making this certification,
beneficiary, or alternate payee to receive      the actuary should not take into account            .01 Information to be provided.—The
the notice will not cause the applicant to      any extension application under § 431(d)         applicant must furnish appropriate evi-
fail the notice requirement.                    before the application receives a favorable      dence that the extension of the amortiza-
    The application must state the method       ruling.                                          tion period would carry out the purposes
used by the applicant to satisfy this notice                                                     of ERISA and PPA and would provide
requirement.                                    SECTION 4—APPLICATION FOR                        adequate protection for the participants
    .05      Providing       Information.—      AUTOMATIC EXTENSION                              and their beneficiaries, and that the fail-
Employers who have difficulty in                                                                 ure to permit the extension would (I)
furnishing the information specified in this        .01 Information to be provided.—The          result in a substantial risk to the voluntary
revenue procedure may call the Employee         applicant must furnish the following infor-      continuation of the plan, or a substantial
Plans Customer Assistance Service at            mation:                                          curtailment of pension benefit levels or
1–877–829–5500 (a toll-free number),                1. The unfunded liability for which an       employee compensation, and (II) would be
or write for guidance to the following          extension of the amortization period is re-      adverse to the interests of the plan partic-
address:                                        quested.                                         ipants in the aggregate. What constitutes
                                                    2. The length of the extension of the        appropriate evidence will depend on the
   Internal Revenue Service                     amortization period being requested (up to       facts and circumstances of each case. A
   Commissioner, TE/GE                          a maximum of 5 years).                           response must be furnished for each of the
   Attention: SE:T:EP:RA:T:A2                       3. Whether a prior application for           paragraphs (1) through (6) below. In cer-
   1111 Constitution Avenue, N.W.               an amortization extension (automatic or          tain cases, some of the material described
   Washington, D.C. 20224                       alternative) was submitted, whether an           in paragraphs (1) through (6) may be in-
                                                application was granted under § 412(e)           applicable, unavailable, inappropriate or
    In appropriate instances, pre-submis-       with respect to the prior 15 plan years,         burdensome to furnish. In such cases, the
sion conferences may be afforded in ad-         and whether the plan is in endangered or         applicant must furnish a statement indi-
dition to conferences available under Rev.      critical status as determined under section      cating why the material for a particular
Proc. 2008–8.                                   432(b)(3) in the first plan year for which       paragraph is inapplicable, unavailable,
    .06 Coordination of Extension Appli-        the extension is requested.                      inappropriate or burdensome.
cations.—The total period of extensions             4. A certification by the plan’s actuary        (1) General facts concerning the partic-
permitted under paragraphs (1) and (2)          that, based on reasonable assumptions:           ipating employers.
of § 431(d) of the Code is limited to 10            (i) absent the extension for which the          A brief statement should be submitted
years. Section 4 of this revenue proce-         plan is applying, the plan would have an            concerning: (a) the history of the con-
dure relates to automatic extensions under      accumulated funding deficiency in the cur-          tributing employers and the industry or
§ 431(d)(1). Section 5 of this revenue          rent plan year or any of the 9 succeeding           industries covered by the plan; (b) the
procedure relates to alternative extensions     plan years,                                         ownership of the principal employers
under § 431(d)(2). An automatic exten-              (ii) the plan sponsor has devised a plan        (as identified below) and any recent
sion for a plan may not exceed 5 years.         to improve the plan’s funding status,               or contemplated changes (such as ac-
An alternative extension may be for up              (iii) the plan is projected to have suffi-      quisitions, mergers, discontinuances of
to 10 years less any automatic extension        cient assets to timely pay expected bene-           operations) which might have a bear-
approved. An applicant requesting both          fits and anticipated expenditures over the          ing on the employers’ organizations or
types of extension may do so in a single        amortization period as extended, and                general financial condition; (c) any re-
application. However, such a submission             (iv) the     notice    required     under       cently withdrawn principal employers
must include the information specified in       § 431(d)(3)(A) has been provided, in                with the withdrawal liability amounts

December 1, 2008                                                  1212                                                  2008–48 I.R.B.
    and dates applicable; and (d) a general          1. The unfunded liability for which an       the extension is requested and the previous
    description of the financial state of the    extension of the amortization period is re-      four years which affect plan costs, includ-
    industry in which employees covered          quested.                                         ing the approximate effect of each amend-
    by the plan are employed.                        2. The reasons why an extension of the       ment on such costs.
    (2) The financial condition of the prin-     amortization period is needed.                       9. The most recent actuarial report plus
cipal employers.                                     3. The length of the extension of the        any available actuarial reports for the pre-
    For purposes of this revenue procedure,      amortization period desired (up to a maxi-       ceding two plan years. Also, if not shown
the principal employers are those employ-        mum of 10 years less any automatic exten-        in that report, the present value of accrued
ers who are (1) directly represented on the      sion).                                           benefits, present value of vested benefits,
applicant board of trustees or (2) made or           4. Information concerning the actions        and fair market value of assets (excluding
are required to make five percent or more        taken by the applicant to reduce the plan’s      contributions not yet paid).
of the total required contributions under        unfunded liability before the request for an         10. A description of how the plan is
the collective bargaining agreements relat-      extension has been made. Such actions            funded (i.e., trust fund, individual insur-
ing to the plan for which the extension is       would include the reduction of future plan       ance policies, etc.).
requested. Each of the principal employ-         benefit accruals and increases in employer           11. A list of the contributions actually
ers must submit the latest available annual      contribution rates. Also describe any ben-       paid in each month, from the twenty-fourth
financial report of the employer and each        efit reductions, contribution rate increases,    month prior to the beginning of the plan
of the other entities included within the        or other actions that are intended to be         year for which the extension is requested
controlled group of which the employer is        taken in the future.                             through the date of the request and the
a member. This submission must include               5. Projections of (i) funding standard       plan year to which the contributions were
at least the balance sheet, profit and loss      account credit balance/accumulated fund-         applied, with the employee contributions
statement, cash flow statement, and notes        ing deficiencies, (ii) actuarial value of as-    and the employer contributions listed sep-
to the financial statement. Recent interim       sets and market value of assets, (iii) cur-      arately.
financial reports for each of the controlled     rent liabilities, and (iv) funding ratios, for       12.    The approximate contribution
group members, if available, must also be        the length of the extension of the amor-         required to meet the minimum funding
submitted along with an interim financial        tization period requested and for the pe-        standard. For defined benefit plans, this
report covering the corresponding period         riod 10 years afterwards. For example,           amount must be determined by the plan’s
for the previous year. If the employer sub-      if the applicant requests an extension of        enrolled actuary.
mits financial reports to the Securities and     10 years (including a five-year automatic            13. A copy of the most recently com-
Exchange Commission, these reports must          extension), the projections must be for a        pleted Annual Return/Report of Employee
be submitted for the same period as the an-      20-year period. These projections must be        Benefit Plan (Form 5500 series, as appli-
nual financial report. Preferably, the finan-    prepared by an enrolled actuary.                 cable) and in the case of a defined bene-
cial report should include certified finan-          6. The plan year for which the exten-        fit plan, a copy of the corresponding Ac-
cial statements. If certified financial state-   sion is requested, i.e., the first plan year     tuarial Information schedule (Schedule B
ments have not been prepared, an uncerti-        for which the extension of the amortization      of Form 5500 for plan years beginning be-
fied report is acceptable. If neither certi-     period will be reflected in the determina-       fore 2008, or Schedule MB for plan years
fied nor uncertified reports are available, a    tion of the minimum funding standard for         beginning after 2007).
copy of the company’s latest available fed-      the plan (e.g., 1/1/2008–12/31/2008).                14. A copy of each ruling letter that
eral income tax return, including all of the         The Service may request additional in-       waived the minimum funding standard
supporting schedules, must be submitted.         formation as needed.                             during the last 15 plan years, a statement
The required financial information of the            (4) Facts concerning the pension plan.       of the amount waived for each plan year,
principal employers should be submitted          For each pension plan for which an exten-        and a statement of the outstanding balance
directly from each employer to the Service       sion is requested, the following informa-        of the amortization base for each waived
at the following address, at the same time       tion must be supplied.                           funding deficiency. The outstanding bal-
that the application is made:                        1. The name of the plan, the plan’s iden-    ance of the amortization base for each
                                                 tification number, and file folder number        waiver is to be calculated as of the first day
   Employee Plans                                (if any).                                        of the plan year for which an extension is
   Internal Revenue Service                          2. The date the plan was adopted.            being requested.
   Commissioner, TE/GE                               3. The effective date of the plan.               15. A copy of each ruling letter that
   Attention: SE:T:EP:RA                             4. The classes of employees covered.         granted under § 431(d) or under § 412(e)
   P.O. Box 27063                                    5. The number of employees covered.          of the Code as in effect prior to January
   McPherson Station                                 6. A copy of the current plan document       1, 2008, an extension of time to amortize
   Washington, D.C. 20038                        and the most recent summary plan descrip-        any unfunded liability which became ap-
                                                 tion.                                            plicable at any time during the last 15 plan
   (3) Information concerning the exten-             7. A copy of the most recent determi-        years.
sion of the amortization period. Informa-        nation letter issued to the plan.                    16. A copy of the certification of
tion concerning the extension of the amor-           8. A brief description of all plan amend-    whether or not the plan is in critical status
tization period must include the following.      ments adopted during the year for which          or endangered status, in accordance with

2008–48 I.R.B.                                                     1213                                            December 1, 2008
the requirements of § 432(b)(3), for the         cation will not be considered received un-      reviewed and approved by the Office
first plan year for which the extension is       til the applicable information required as      of Management and Budget in accor-
requested.                                       stated in sections 4.01, 5.01, and 5.02 of      dance with the Paperwork Reduction Act
    17. A copy of any funding improve-           this revenue procedure has been received.       (44 U.S.C. § 3507) under control number
ment plan or rehabilitation plan to which        The Service will provide notification to the    1545–1890
the plan is currently subject in accordance      applicant of the date upon which it has full        An agency may not conduct or sponsor,
with § 432, or to which the plan has been        receipt of required information. The Ser-       and a person is not required to respond
subject at any time within the 10 years pre-     vice will close the file on a submission for    to, a collection of information unless the
ceding the date of this application and all      which not all of the required documenta-        collection of information displays a valid
updates to the funding improvement plan          tion is provided in a timely manner with-       OMB control number.
or rehabilitation plan.                          out issuing a ruling.                               The collection of information in this
    (5) Other information.                                                                       revenue procedure is in §§ 3, 4 and 5 and
    1. Describe the nature of any matters        SECTION 7. BANKRUPTCY                           Appendix B. This collection of informa-
pertaining to the plan which are currently       PETITIONS                                       tion is required to evaluate, process and
pending or are intended to be submitted to                                                       obtain approval of the request for an ex-
the Service, the Department of Labor or the          If significant number of employers or       tension of an amortization period. This in-
Pension Benefit Guaranty Corporation.            any of the principal employers file a bank-     formation will be used to make determi-
    2. Furnish details of any existing ar-       ruptcy petition after the request for an ex-    nations on extensions of the amortization
bitration, litigation, or court procedure        tension of an amortization period is sub-       period under § 431(d). The likely respon-
which involves the plan.                         mitted to the Service, the applicant must       dents are businesses or other for-profit in-
    .02 Checklist.—A checklist has been          provide to the Service an update to the in-     stitutions and nonprofit institutions.
provided in Appendix B for the conve-            formation required to be submitted in § 5           The estimated total annual report-
nience of the applicant submitting the re-       of this revenue procedure, especially the fi-   ing/recordkeeping burden is 2500 hours.
quest. The checklist must be signed by the       nancial information in sections 5.01(2) and         The estimated annual burden per re-
applicant or authorized representative and       (3).                                            spondent/recordkeeper varies from 71 to
dated and placed on top of the request.                                                          129 hours, depending on individual cir-
                                                 SECTION 8. EFFECTIVE DATE
                                                                                                 cumstances, with an estimated average
SECTION 6. DEADLINE FOR                                                                          burden of 100 hours. The estimated num-
                                                    This revenue procedure is effective for
REQUESTING AN EXTENSION                                                                          ber of respondents/recordkeepers is 25.
                                                 all ruling requests received with respect
                                                 to plan years starting after December 31,           The estimated annual frequency of re-
   All extension requests must be submit-                                                        sponses is one.
ted by the last day of the first plan year       2007.
                                                                                                     Books or records relating to a collection
for which the extension is intended to take                                                      of information must be retained as long
                                                 SECTION 9. EFFECT ON OTHER
effect. The Service will consider appli-                                                         as their contents may become material in
                                                 REVENUE PROCEDURES
cations for extensions submitted after this                                                      the administration of any internal revenue
date only upon a showing of good cause.             Rev. Proc. 2008–4 is modified to the         law. Generally, tax returns and tax return
In seeking an extension of an amortization       extent that this revenue procedure provides     information are confidential, as required
period with respect to a plan year which         special procedures for issuing rulings with     by 26 U.S.C. § 6103.
has not yet ended, the applicant may have        respect to requests for an extension of an
difficulty in furnishing sufficient current      amortization period.                            DRAFTING INFORMATION
evidence in support of the request. For this        Rev. Proc. 2004–44, 2004–2 C.B.
reason, it is generally advised that a request   134, is superseded effective for applica-          The principal author of this revenue
not be submitted earlier than 90 days prior      tions submitted with respect to plan years      procedure is Tony Montanaro of the
to the end of the plan year for which the        starting after December 31, 2007.               Employee Plans, Tax Exempt and Gov-
extension is requested. This 90 day period                                                       ernment Entities Division.    Questions
does not apply to applications for an auto-      SECTION 10. PAPERWORK                           about this revenue procedure and its ap-
matic extension. Section 431(d)(2)(C) of         REDUCTION ACT                                   plication may be directed by email to
the Code requires that the Service act on                                              
the submission within 180 days of receiv-           The collection of information con-
ing an application for extension. An appli-      tained in this revenue procedure has been

December 1, 2008                                                   1214                                                 2008–48 I.R.B.
                                               APPENDIX A: MODEL NOTICE
                                    MODEL NOTICE OF APPLICATION FOR AN
                                   EXTENSION OF AN AMORTIZATION PERIOD
                                   TO EMPLOYEE ORGANIZATIONS (UNIONS),
   This notice is to inform you that an application for an extension of an amortization period for unfunded liability under § 431(d)
of the Internal Revenue Code (Code) and § 304(d) of the Employee Retirement Income Security Act of 1974 (ERISA) has been
submitted by [INSERT APPLICANT’S NAME] to the Internal Revenue Service (Service) for the [INSERT PLAN NAME] for the
plan year beginning [INSERT DATE].
   Under § 431(d)(3)(B) of the Code and § 304(d)(3)(B) of ERISA, the Service will consider any relevant information submitted
concerning this application for an extension of the amortization period for unfunded liability. You may send this information to the
following address:
   Director, Employee Plans
   Internal Revenue Service
   Attn: SE:T:EP:RA:T:A2
   1111 Constitution Avenue, N.W.
   Washington, D.C. 20224
   Any such information should be submitted as soon as possible after you have received this notice. Due to the disclosure restric-
tions of § 6103 of the Code, the Service can not provide any information with respect to the extension request itself.
   In accordance with § 104 of ERISA, annual financial reports for this plan, which include employer contributions made to the
plan for any plan year, are available for inspection at the Department of Labor in Washington, D.C. Copies of such reports may be
obtained upon request and upon payment of copying costs from the following address:
   Public Disclosure Room
   Room N–1513
   Employee Benefits Security Administration
   U.S. Department of Labor
   200 Constitution Avenue, NW
   Washington, D.C. 20210
   In addition, pension plan actuarial information filed for 2008 and later plan years filed with the Department of Labor may be
obtained at
   As required by § 104(b)(2) of ERISA, copies of the latest annual plan report are available for inspection at the principal office
of the plan administrator, who is located at [INSERT ADDRESS]. As required under § 101(k)(1) of ERISA, copies of periodic
actuarial reports, quarterly, semi-annual, or annual financial reports, and copies of any application for extension under § 304 of
ERISA or § 431(d) of the Code may be obtained upon request and upon payment of a copying charge of [INSERT CHARGES]
by writing to the plan administrator at the above address.
   The following information is provided pursuant to § 304(d)(3) of ERISA and 431(d)(3) of the Code:
   Present Value of Vested Benefits $
   Present Value of Benefits, calculated as though the plan terminated $
   Fair Market Value of Plan Assets $

   The above present values were calculated using an interest rate or rates of [INSERT INTEREST RATE(S)].


2008–48 I.R.B.                                                1215                                         December 1, 2008
                                            IS YOUR SUBMISSION COMPLETE?
The Service will be able to respond more quickly to your request for an alternative extension of an amortization period if it is
carefully prepared and complete. To ensure your request is in order, use this checklist. Answer each question in the checklist by
inserting Y for yes, N for no, or N/A for not applicable, as appropriate, in the blank next to the item. Sign and date the checklist
(as applicant or authorized representative) and place it on top of your request.
You must submit a completed copy of this checklist with your request. If a completed checklist is not submitted with your request,
substantive consideration of your submission will be deferred until a completed checklist is received.

                           1.     If you want to designate an authorized representative, have you included a properly executed
                                  Form 2848 (Power of Attorney and Declaration of Representative)?

                           2.     Have you satisfied all the requirements of Rev. Proc. 2008–4 or its successors (especially
                                  concerning signatures and penalties of perjury statement)? (See § 3.03(1))

                           3.     Have you included a statement of proposed deletions? (See § 3.03(2))

                           4.     Have you included the user fee required under Rev. Proc. 2008–8 or its successors? (See § 3.02)

                           5.     Have you included a copy of the written notification that an application for an extension of an
                                  amortization period has been submitted and a statement that such notice was hand delivered or
                                  mailed to each employee organization, participant, beneficiary and alternate payee? (See § 5.02
                                  and Appendix A)

                           6.     Have you included the general facts concerning the employer? (See § 5.01(1))

                           7.     Have you included a description of the industry’s financial condition? (See § 5.01(2))

                           8.     Have you included information concerning the extension of the amortization period? (See
                                  § 5.01(3))

                           9.     Have you included information concerning the pension plan? (See § 5.01(4))

                           10.    Have you included information concerning other matters pertaining to the plan? (See § 5.01(5))

Signature                         Date

Typed or printed name of person signing checklist

Title or Authority

December 1, 2008                                              1216                                                2008–48 I.R.B.
26 CFR 601.601: Rules and regulations.               erty or sales to which § 1033 applies)     § 857(b)(6)(C)(iii) or of § 857(b)(6)(D)(iv)
(Also: Part I, § 857.)                               (“7-Sales Test”) ; or                      means that either—
                                                 •   The aggregate adjusted bases (as de-
                                                                                                •   The REIT satisfies the 7-Sales Test (for
Rev. Proc. 2008–69                                   termined for purposes of computing
                                                                                                    the entire taxable year);
                                                     earnings and profits) of property (other
                                                     than sales of foreclosure property or
                                                                                                •   The REIT satisfies the 10-Percent Ad-
SECTION 1. PURPOSE                                                                                  justed Bases Test (for the entire taxable
                                                     sales to which § 1033 applies) sold dur-
                                                                                                    year); or
                                                     ing the taxable year did not exceed 10
   This revenue procedure provides
                                                     percent of the aggregate bases (as so
                                                                                                •   Both —
real estate investment trusts (REITs)
                                                     determined) of all of the assets of the
                                                                                                    • The aggregate adjusted bases (as
with a method for applying the prohib-                                                                  determined for purposes of com-
ited transactions tax safe harbor under              REIT as of the beginning of the tax-
                                                                                                        puting earnings and profits) of
§§ 857(b)(6)(C)(iii) and (D)(iv) of the              able year (“10-Percent Adjusted Bases
                                                                                                        property (other than sales of fore-
Internal Revenue Code for a taxable year             Test”).
                                                                                                        closure property or sales to which
that begins on or before July 30, 2008,                                                                 § 1033 applies) sold during the
and ends on or after July 31, 2008. Sec-            .04 Section 3052 of the 2008 Hous-
                                                                                                        portion of the taxable year ending
tions 857(b)(6)(C)(iii) and (D)(iv) were         ing Act amended §§ 857(b)(6)(C)(iii)
                                                                                                        on July 30, 2008, did not exceed 10
amended by the Housing Assistance Tax            and (D)(iv) to provide an additional al-
                                                                                                        percent of the aggregate bases (as
Act of 2008, Division C of Pub. L. No.           ternative test. Under this alternative test,
                                                                                                        so determined) of all of the assets
110–289 (“2008 Housing Act”), effective          the requirements of § 857(b)(6)(C)(iii) or
                                                                                                        of the REIT as of the beginning of
for sales made after July 30, 2008, the date     (D)(iv) are satisfied if the aggregate fair
                                                                                                        the taxable year (that is, the REIT
of the 2008 Housing Act’s enactment.             market value of property (other than sales
                                                                                                        satisfies the 10-Percent Adjusted
                                                 of foreclosure property or sales to which
                                                                                                        Bases Test as if the portion of the
SECTION 2. BACKGROUND                            § 1033 applies) sold during the taxable
                                                                                                        taxable year ending on July 30,
                                                 year does not exceed 10 percent of the
                                                                                                        2008, were an entire taxable year);
   .01 Section 857(b)(6) of the Code im-         fair market value of all of the assets of
poses a tax for each taxable year of a REIT      the REIT as of the beginning of the tax-
equal to 100 percent of the net income de-       able year (“10-Percent Fair Market Value
                                                                                                    • The REIT satisfies the 10-Percent
                                                                                                        Fair Market Value Test (for the en-
rived from prohibited transactions. Under        Test”). This amendment is effective for
                                                                                                        tire taxable year).
§ 857(b)(6)(B)(iii), the term “prohibited        sales made after July 30, 2008.
transaction” means a sale or other disposi-         .05 Because this effective date is ex-      SECTION 5. EFFECTIVE DATE
tion of property described in § 1221(a)(1)       pressed in terms of sales made after a par-
that is not foreclosure property.                ticular date, questions have arisen about        This revenue procedure is effective
   .02 Section 857(b)(6)(C) excludes cer-        how to interpret it for substantive provi-     November 13, 2008.
tain sales from the definition of a prohib-      sions that apply as alternatives and are ex-
ited transaction (“the prohibited transac-       pressed in terms of sales during a taxable     SECTION 6. DRAFTING
tion safe harbor”). Under § 857(b)(6)(C),        year.                                          INFORMATION
a sale of property that is a real estate asset
as defined in § 856(c)(5)(B) is not a pro-       SECTION 3. SCOPE                                  The principal author of this revenue
hibited transaction if several requirements                                                     procedure is Jonathan D. Silver of the Of-
are satisfied. A similar safe harbor applies        This revenue procedure applies to           fice of Associate Chief Counsel (Financial
under § 857(b)(6)(D) for sales of property       a REIT that seeks to apply the pro-            Institutions & Products). For further infor-
in connection with the trade or business of      hibited transaction safe harbor under          mation regarding this revenue procedure,
producing timber.                                § 857(b)(6)(C)(iii) or (D)(iv) for a tax-      contact Mr. Silver at (202) 622–3930 (not
   .03 Prior to the enactment of the 2008        able year that begins on or before July 30,    a toll-free call).
Housing Act, §§ 857(b)(6)(C)(iii) and            2008, and ends on or after July 31, 2008.
(D)(iv) provided that the prohibited trans-
                                                 SECTION 4. APPLICATION
action safe harbor applied only if—
•   During the taxable year, the REIT               For a REIT’s taxable year that begins
    made no more than 7 sales of property        on or before July 30, 2008, and ends on
    (other than sales of foreclosure prop-       or after July 31, 2008, satisfaction of

2008–48 I.R.B.                                                    1217                                           December 1, 2008
Part IV. Items of General Interest
Notice of Proposed                            via     the      Federal       eRulemaking      for Advocacy of the Small Business
Rulemaking by                                 Portal    at      Administration for comment on its impact
Cross-Reference to                            (IRS REG–118327–08).            The public      on small business.
                                              hearing will be held in the IRS Auditorium,
Temporary Regulations                         Internal Revenue Building,             1111     Comments and Public Hearing
and Notice of Public Hearing                  Constitution Avenue, NW, Washington,
                                                                                                 Before these proposed regulations are
                                                                                              adopted as final regulations, consideration
Information Reporting for
                                              FOR      FURTHER         INFORMATION            will be given to any electronic or written
Discharges of Indebtedness                                                                    comments (a signed original and eight (8)
                                              CONTACT: Concerning the regulations,
                                              Barbara Pettoni at (202) 622–4910; con-         copies) that are submitted timely to the
REG–118327–08                                                                                 IRS. The Treasury Department and the
                                              cerning submission of comments, the
                                              hearing, and/or to be placed on the             IRS request comments on the clarity of
AGENCY: Internal Revenue Service
                                              building access list to attend the hear-        the proposed rules and how they may be
(IRS), Treasury.
                                              ing, Oluwafunmilayo Taylor at (202)             made easier to understand. All comments
ACTION: Notice of proposed rulemaking         622–7180 (not toll-free numbers).               will be available for public inspection and
by cross-reference to temporary regula-                                                       copying. A public hearing has been sched-
tions and notice of public hearing.           SUPPLEMENTARY INFORMATION:                      uled for March 13, 2009, beginning at
                                                                                              10:00 a.m. in the IRS Auditorium, Internal
SUMMARY: In this issue of the Bulletin,       Background                                      Revenue Building, 1111 Constitution
the IRS is issuing final and temporary reg-                                                   Avenue, NW, Washington, DC. Due to
ulations (T.D. 9430) relating to informa-         Temporary regulations in this issue of      building security procedures, visitors must
tion returns for cancellation of indebted-    the Bulletin contain amendments to the In-      enter at the Constitution Avenue entrance.
ness by certain entities. The temporary       come Tax Regulations (26 CFR Part 1) un-        In addition, all visitors must present
regulations will avoid premature informa-     der section 6050P relating to information       photo identification to enter the building.
tion reporting from certain businesses that   reporting for cancellation of indebtedness      Because of access restrictions, visitors
are currently required to report and will     by certain entities. The text of those regu-    will not be admitted beyond the immediate
reduce the number of information returns      lations also serves as the text of these pro-   entrance more than 30 minutes before
required to be filed. The regulations will    posed regulations. The preamble to the          the hearing starts. For information about
impact certain lenders who are currently      temporary regulations explains the tempo-       having your name placed on the building
required to file information returns under    rary regulations and these proposed regu-       access list to attend the hearing, see
the existing regulations. The text of those   lations.                                        the FOR FURTHER INFORMATION
temporary regulations also serves as text                                                     CONTACT section of this preamble.
of these proposed regulations. This docu-     Special Analyses                                   The rules of 26 CFR 601.601(a)(3) ap-
ment also provides a notice of public hear-                                                   ply to the hearing. Persons who wish to
                                                 It has been determined that this notice
ing on these proposed regulations.                                                            present oral comments at the hearing must
                                              of proposed rulemaking is not a sig-
                                                                                              submit electronic or written comments by
DATES: Written or electronic comments         nificant regulatory action as defined in
                                                                                              February 9, 2009, and an outline of the
must be received by February 9, 2009.         Executive Order 12866. Therefore, a reg-
                                                                                              topics to be discussed and the time to be
Outlines of topics to be discussed at the     ulatory assessment is not required. It has
                                                                                              devoted to each topic (signed original and
public hearing scheduled for March 13,        also been determined that section 553(b)
                                                                                              eight (8) copies) by February 13, 2009.
2009, must be received by February 13,        of the Administrative Procedure Act
                                                                                                 A period of 10 minutes will be allot-
2009.                                         (5 U.S.C. chapter 5) does not apply to these
                                                                                              ted to each person for making comments.
                                              regulations. The proposed regulations
                                                                                              An agenda showing the scheduling of
ADDRESSES: Send submissions to:               under section 6050P do not impose a
                                                                                              the speakers will be prepared after the
CC:PA:LPD:PR         (REG–118327–08),         collection of information on small entities.
                                                                                              deadline for receiving outlines has passed.
room 5203, Internal Revenue Service,          Therefore, the Regulatory Flexibility
                                                                                              Copies of the agenda will be available free
PO Box 7604, Ben Franklin Station,            Act (5 U.S.C. chapter 6) does not apply.
                                                                                              of charge at the hearing.
Washington, DC 20044. Submissions may         The proposed regulations will reduce the
be hand-delivered Monday through Friday       number of information returns required to       Drafting Information
between the hours of 8 a.m. and 4 p.m.        be filed under section 6050P rather than
to CC:PA:LPD:PR (REG–118327–08),              impose a collection of information on              The principal author of these proposed
Courier’s Desk,      Internal Revenue         entities. Pursuant to section 7805(f) of the    regulations is Barbara Pettoni, Office of
Service, 1111 Constitution Avenue, NW,        Internal Revenue Code, these regulations        Associate Chief Counsel (Procedure and
Washington, DC, or sent electronically        have been submitted to the Chief Counsel        Administration).

December 1, 2008                                                1218                                                2008–48 I.R.B.
                  *****                           (H) [The text of the proposed                              announcement. Upon completion of the
                                               amendments to §1.6050P–1(b)(2)(i)(H)                          two-year pilot period, TE/GE and Appeals
Proposed Amendments to the                     is the same as the text of                                    will evaluate the program, consider neces-
Regulations                                    §1.6050P–1T(b)(2)(i)(H) published else-                       sary adjustments, and determine whether
                                               where in this issue of the Bulletin].                         to make the program permanent.
   Accordingly, 26 CFR part 1 is proposed
to be amended as follows:                      *****                                                         RELIANCE ON AND DIFFERENCES
                                                   (v) [The text of the proposed amend-                      FROM LMSB AND SB/SE FAST
PART 1—INCOME TAXES                            ments to §1.6050P–1(b)(2)(v) is the same                      TRACK SETTLEMENT
                                               as the text of §1.6050P–1T(b)(2)(v) pub-
   Par. 1. The authority citation for part 1   lished elsewhere in this issue of the Bul-                       The procedures for using TE/GE FTS
continues to read in part as follows:          letin].                                                       rely on the provisions of Revenue Pro-
   Authority: 26 U.S.C. 7805 * * *                                                                           cedure 2003–40, 2003–1 C.B. 1044,
   Par. 2. Section 1.6050P–0 is amended                                                                      and Announcement 2006–61, 2006–2
                                                  (h)(1) [The text of the proposed amend-
as follows:                                                                                                  C.B. 390, which implement Large and
                                               ments to §1.6050P–1(h) is the same as
   1. The introductory text is revised.                                                                      Mid-Size Business (LMSB) and Small
                                               the text of §1.6050P–1T(h) published else-
   2. The entries in §1.6050P–1(b)(2)(v)                                                                     Business/Self-Employed (SB/SE) Tax-
                                               where in this issue of the Bulletin].
and (h)(1) are revised.                                                                                      payer FTS Dispute Resolution Programs,
   3. The entry for §1.6050P–1T is re-         *****                                                         respectively.
moved.                                                                                                          TE/GE FTS, during the two-year pi-
   The revisions read as follows:                                              Linda E. Stiff,
                                                                                                             lot period, extends the provisions of
   §1.6050P–0 Table of contents.—This                               Deputy Commissioner for
                                                                                                             the LMSB and SB/SE FTS programs
section lists the major captions that appear                        Services and Enforcement.
                                                                                                             to TE/GE cases and provides for direct
in §1.6050–P–1 and §1.6050P–2.                 (Filed by the Office of the Federal Register on November 7,   oversight of the program by TE/GE and
                                               2008, 8:45 a.m., and published in the issue of the Federal
*****                                          Register for November 10, 2008, 73 F.R. 66568)                Appeals. TE/GE FTS therefore involves
                                                                                                             procedures almost identical to the LMSB
§1.6050P–1 Information reporting for                                                                         and SB/SE FTS procedures described in
discharges of indebtedness by certain          Fast Track Settlement For                                     Rev. Proc. 2003–40 and Ann. 2006–61.
entities.                                                                                                    The key differences between the LMSB,
                                               TE/GE Taxpayers
                                                                                                             SB/SE and TE/GE FTS procedures are as
*****                                                                                                        follows:
   (b) * * *
                                               Announcement 2008–105
   (2) * * *                                                                                                 •   The TE/GE Group Manager or de-
                                               DESCRIPTION OF TE/GE FAST                                         signee fulfills the duties of the LMSB
   (v) [The text of the proposed entry for     TRACK SETTLEMENT
§1.6050P–1(b)(2)(v) is the same as the text                                                                      Team Manager or SB/SE Group Man-
in §1.6050P–1T(b)(2)(v) in §1.6050P–0                                                                            ager;
                                                  This announcement provides an op-
published elsewhere in this issue of the       portunity for entities with issues under
                                                                                                             •   The Appeals FTS Program Manager,
Bulletin].                                                                                                       after consultation with the TE/GE
                                               examination by the Tax Exempt and Gov-
                                                                                                                 Group Manager, selects and manages
*****                                          ernmental Entities Division (TE/GE) to
                                                                                                                 cases eligible for TE/GE FTS. The
    (h) * * *                                  use Fast Track Settlement (FTS) to ex-
                                                                                                                 Appeals Team Manager responsible
    (1) [The text of the proposed entry for    pedite case resolution. The TE/GE FTS
                                                                                                                 for TE/GE Programs serves as the FTS
§1.6050P–1(h)(1) is the same as the text       will enable TE/GE entities that currently
                                                                                                                 Program Manager; and
                                               have unagreed issues in at least one open
of §1.6050P–1T(h)(1) in §1.6050P–0 pub-
                                               period under examination to work together
                                                                                                             •   The TE/GE FTS process is designed to
lished elsewhere in this issue of the Bul-                                                                       be completed within 60 days of accep-
letin].                                        with TE/GE and the Office of Appeals
                                                                                                                 tance of the TE/GE FTS Application.
    Par. 3. Section 1.6050P–1 is amended       (Appeals) to resolve outstanding disputed
                                                                                                                 The process can be extended beyond
by revising paragraphs (b)(2)(i)(H),           issues while the case is still in TE/GE
                                                                                                                 the 60-day period if agreed to by all
(b)(2)(v) and (h)(1) to read as follows:       jurisdiction. TE/GE and Appeals will
                                               jointly administer the TE/GE FTS process.
§1.6050P–1 Information reporting for           TE/GE FTS will be used to resolve factual                     CASE ELIGIBILITY AND
discharges of indebtedness by certain          and legal issues, and it may be initiated                     EXCLUSIONS
entities.                                      at any time after an issue has been fully
                                               developed, but before the issuance of a                          Generally, TE/GE FTS is available for
*****                                          30-day letter (or its equivalent). TE/GE                      cases involving: income tax, exclusion
 (b) * * *                                     FTS will be available to taxpayers for a                      of income from interest paid on munic-
 (2) * * *                                     pilot period of up to two years, begin-                       ipal obligations, employment tax, estate
 (i) * * *                                     ning upon the date of publication of this                     and gift tax, excise tax, and exemption,

2008–48 I.R.B.                                                        1219                                                   December 1, 2008
foundation or qualification issues or other     gram Manager will determine whether Ap-         limited cases, a mediation-trained Appeals
such TE/GE functional issues as appropri-       peals has the necessary staffing resources      Team Case Leader, will serve as the neu-
ate when:                                       before accepting the case into the program.     tral FTS Appeals Official.
                                                   TE/GE FTS will not be the appropri-              During TE/GE FTS, the taxpayer (or
•   Issues are fully developed;
                                                ate dispute resolution process for all cases    taxpayer’s authorized representative) and
•   The taxpayer has stated a position in
                                                involving TE/GE taxpayers. The TE/GE            TE/GE representatives, including at least
    writing; and
                                                Group Manager or designee and the tax-          one representative with decision-making
•   There are a limited number of un-
                                                payer will evaluate their individual cir-       authority from both TE/GE and the tax-
    agreed issues.
                                                cumstances of their case to determine if        payer, will meet with the FTS Appeals Of-
                                                this process meets their needs.                 ficial. Any person engaged in practice be-
    TE/GE FTS will not be available for:
                                                                                                fore the IRS must have a power of attor-
•   Issues that can be resolved through         APPLICATION PROCESS                             ney from the taxpayer (Form 2848, Power
    other established settlement initiatives,                                                   of Attorney and Declaration of Represen-
    such as, but not limited to, the Self           A taxpayer that is interested in partic-    tative). The taxpayer and TE/GE represen-
    Correction Program “SCP”, the Audit         ipating in TE/GE FTS, or that has ques-         tatives should include individuals with the
    Closing Agreement Program “Audit            tions about the program and its suitabil-       information and expertise necessary to as-
    CAP”, or other programs described           ity for the taxpayer’s case, may contact        sist the parties and the FTS Appeals Of-
    in Rev. Proc. 2006–27, 2006–1 C.B.          the TE/GE Group Manager of the Exam-            ficial during the settlement process. The
    945;                                        ining Agent conducting the audit for the        FTS Appeals Official may ask the parties
•   Correspondence examination cases;           period(s) currently under examination. Ei-      to limit the number of participants to facil-
•   Cases in which the taxpayer has failed      ther the taxpayer, Examining Agent or the       itate the process.
    to respond to IRS communications and        TE/GE Group Manager may initiate an                 The FTS Appeals Official will hold the
    no documentation has been previously        application to the TE/GE FTS process at         FTS session at the date and location agreed
    submitted for consideration by TE/GE;       any time after an issue has been fully de-      to by both parties. Prior to the FTS ses-
•   Cases in which Appeals does not have        veloped but before a 30-day letter (or its      sion, the FTS Appeals Official will advise
    jurisdiction (including determination       equivalent) is issued.                          the participants of the procedures and es-
    of penalties under § 6700 of the Code);         A FTS Application, attached as Exhibit      tablish ground rules. The FTS Appeals Of-
•   Listed Abusive Tax Avoidance Trans-         1, should be submitted. A Form 5701,            ficial may modify the rules and procedures
    actions (ATAT);                             (Notice of Proposed Adjustment) or a Rev-       during the session to adapt to changes in
•   Cases involving potential for civil or      enue Agent Report will be prepared by           circumstances. The FTS session may in-
    criminal fraud;                             the TE/GE Examining Agent. To facili-           clude joint sessions with all parties, sep-
•   Rebate claim cases;                         tate the understanding of the parties’ op-      arate meetings, or both as determined ap-
•   Selected initiatives as determined on       posing views, a written response from the       propriate in the sole judgment of the FTS
    an annual basis by the TE/GE Com-           taxpayer must be included with the FTS          Appeals Official.
    missioner or his delegate;                  Application.                                        The FTS Appeals Official will use a
•   Tax Equity & Fiscal Responsibility Act          If the case is not accepted for inclusion   FTS Session Report to assist in planning
    (TEFRA) partnership cases;                  in TE/GE FTS, the TE/GE or Appeals rep-         the FTS session and to report on develop-
•   Issues designated for litigation;           resentative will discuss other dispute reso-    ments during the session. The FTS Ses-
•   Issues under consideration for designa-     lution opportunities with the taxpayer, in-     sion Report will include a list of all issues
    tion for litigation;                        cluding 30-day letter procedures contained      approved for the FTS program, a descrip-
•   Frivolous issues, such as, but not lim-     in IRS Publications 1, Your Rights As A         tion of the issues, the amounts in dispute,
    ited to, those identified in Rev. Proc.     Taxpayer, or 5, Your Appeal Rights and          conference dates, a plan of action for the
    2008–2, 2008–1 I.R.B. 90, or any suc-       How To Prepare a Protest If You Don’t           FTS session and other information useful
    cessor guidance;                            Agree. The decision not to accept a case        to the process as determined by the parties
•   “Whipsaw” issues, i.e., issues for          into the TE/GE FTS program is not subject       and the FTS Appeals Official. The FTS
    which resolution with respect to one        to administrative appeal or judicial review.    Appeals Official also will prepare and up-
    party might result in inconsistent treat-                                                   date an Agenda to guide the communica-
    ment in the absence of the participation    SETTLEMENT PROCESS                              tion, set the order of issue discussion, and
    of another party; or                                                                        pose questions to clarify the issues. During
•   Issues that have been identified in a          TE/GE FTS employs various alterna-           the session, the FTS Appeals Official will
    Chief Counsel Notice, or equivalent         tive dispute resolution techniques to pro-      provide decision makers from both parties
    publication, as excluded from the FTS       mote agreement. An FTS Appeals Offi-            with copies of the Agenda and the FTS
    process.                                    cial will serve as a neutral party. The FTS     Session Report.
                                                Appeals Official will not perform in a tra-         Generally, the FTS Appeals Official
   If an issue is determined not to be el-      ditional Appeals role, but will use dispute     will consider only those issues outlined in
igible for the FTS program, all issues in       resolution techniques to facilitate settle-     the FTS Session Report, except by mutual
the case are not eligible for the FTS pro-      ment between the parties. A TE/GE Ap-           agreement of the parties. If the taxpayer
gram. Additionally, the Appeals FTS Pro-        peals Officer trained in mediation or, in       presents information during the session

December 1, 2008                                                  1220                                                 2008–48 I.R.B.
that the taxpayer had not previously pre-            The prohibition against ex parte com-      on the proposed settlement from the Joint
sented during the audit, the FTS Appeals         munications between Appeals Officers           Committee on Taxation. If the taxpayer
Official will adjust the targeted completion     and other IRS employees provided by            declines to agree with any changes by the
date to give the appropriate IRS officials       § 1001(a) of the Internal Revenue Service      IRS upon reconsideration, TE/GE will
time to evaluate the information.                Restructuring and Reform Act of 1998           close the case unagreed, and the taxpayer
    During the session, the FTS Appeals          does not apply to the communications           will retain all the usual rights to request
Official may propose settlement terms for        arising in the TE/GE FTS process because       Appeals consideration of any unagreed
any or all issues. If the taxpayer accepts       the Appeals personnel are facilitating         issues.
the FTS Appeals Official’s settlement pro-       an agreement between the taxpayer and
posal, but the TE/GE Group Manager re-           TE/GE and are not acting in their tradi-       UNRESOLVED CASES
jects it, the TE/GE Area Manager or equiv-       tional Appeals settlement role.
                                                                                                   With respect to TE/GE FTS cases that
alent TE/GE management official with ju-             Any recommended settlement by the
                                                                                                are returned for traditional Appeals con-
risdiction for the case must review the re-      FTS Appeals Official of an issue in FTS
                                                                                                sideration for any reason, ex parte restric-
jection of the settlement proposal and ei-       shall be subject to the procedures including
                                                                                                tions will not be imposed on intra-Ap-
ther concur in writing with the rejection        procedures in the Internal Revenue Man-
                                                                                                peals communications. Appeals manage-
or accept the settlement proposal on be-         ual and existing published guidance, which
                                                                                                ment will take appropriate measures to en-
half of TE/GE. If the TE/GE Area Man-            would be applicable if the issue was be-
                                                                                                sure these cases are handled impartially.
ager or equivalent TE/GE management of-          ing considered by Appeals. FTS therefore
ficial concurs with the Group Manager’s          creates no special authority for settlement    PRECEDENTIAL VALUE OF
rejection of the settlement proposal, and an     by the FTS Appeals Official. For exam-         SETTLEMENT AGREEMENTS
acceptable alternative settlement cannot be      ple, if the FTS issue is coordinated in ei-
reached, the issue will be closed out of the     ther the Technical Advisor Program or the         A resolution reached by the parties
FTS program as unagreed.                         Appeals Technical Guidance program, the        through the TE/GE FTS process will not
    If the parties resolve any of the dis-       proposed settlement of that issue is subject   bind the parties for taxable periods or
puted issues at the conclusion of the ses-       to established procedures, including sub-      issues not covered by the TE/GE FTS
sion, the parties and the FTS Appeals Of-        mission of the proposed settlement to the      agreement, unless such taxable periods or
ficial shall sign the FTS Session Report         Appeals Coordinator for review and con-        issues are addressed expressly in a closing
acknowledging acceptance of the terms of         currence.                                      agreement reached as part of the TE/GE
settlement for purposes of preparing com-            If the parties fail to resolve any issue   FTS process.
putations. The signature of the parties on       in FTS, the taxpayer retains the option of
the FTS Session Report does not constitute       requesting that the issue be heard through     DELEGATION OF AUTHORITY
a final settlement, nor does it waive restric-   the traditional Appeals process.
                                                                                                    This announcement constitutes a del-
tions on assessment, terminate consents to           Except as specifically provided above,
                                                                                                egation by the Commissioner of Internal
extend periods of limitation, start the run-     both parties retain the right to withdraw
                                                                                                Revenue of settlement authority to Grade
ning of any periods of limitation, or consti-    throughout the entire TE/GE FTS process.
                                                                                                14, 13 and 12 Appeals Officers who are
tute agreement to close the case. Post-set-      A party wishing to withdraw should pro-
                                                                                                assigned to be Appeals FTS Officials for
tlement procedures are described below.          vide written notice to the FTS Appeals Of-
                                                                                                TE/GE FTS cases described in this an-
    The TE/GE FTS process is confiden-           ficial and the other party.
                                                                                                nouncement. This delegation of settle-
tial. IRS employees involved in any way
                                                 POST-SETTLEMENT PROCEDURE                      ment authority includes the responsibility
with the TE/GE FTS process are subject
                                                                                                for arriving at the final disposition from
to the confidentiality and disclosure pro-
                                                     If the parties reach an agreement on all   the Government’s perspective, approving
visions of the Internal Revenue Code. By
                                                 or some issues through the TE/GE FTS           the final settlement in accordance with the
signing the FTS Agreement, attached as
                                                 process, the TE/GE or Appeals FTS Of-          delegated authority, and executing the ap-
Exhibit 1, the taxpayer consents, pursuant
                                                 ficial, as appropriate, will use established   propriate closing documents. This author-
to section 6103(c), to the disclosure of the
                                                 issue or case closing procedures and appli-    ity may not be redelegated.
taxpayer’s returns and return information
                                                 cable agreement forms, including prepa-
pertaining to the issues being considered                                                       EFFECTIVE DATE
                                                 ration of a Form 906, Closing Agreement
in the TE/GE FTS process to those persons
                                                 On Final Determination Covering Specific
named on the Agreement as participants in                                                          TE/GE FTS is effective upon publica-
                                                 Matters, if appropriate.
the process. IRS employees, the taxpayer                                                        tion of this announcement in the Internal
                                                     If applicable, the IRS will report a
and persons invited to participate by the                                                       Revenue Bulletin.
                                                 proposed resolution reached as a result
IRS or the taxpayer shall not voluntarily
                                                 of TE/GE FTS to the Joint Committee            COMMENTS
disclose information regarding any com-
                                                 on Taxation in accordance with section
munication made during the TE/GE FTS
                                                 6405. The IRS may reconsider a proposed           The IRS invites interested persons to
session, except as provided by statute.
                                                 settlement, as reflected in a signed FTS       comment on this program. Send submis-
                                                 Session Report, upon receipt of comments       sions to:

2008–48 I.R.B.                                                    1221                                           December 1, 2008
 Internal Revenue Service-Appeals   FURTHER INFORMATION                          number), or
 Attn: Leonard C. Horton                                                         Leonard C. Horton, Appeals Program
 4050 Alpha Road                       For further information regard-           Analyst, Tax Policy & Procedure
 Farmers Branch, TX 75244–4201      ing this announcement, contact ei-           (Alternative Dispute Resolution) at           ther: Charles F. Fisher, TE/GE Team          (972) 308–7330 (not a toll-free number),
                                    Leader, at (302) 286–1510 (not a toll-free

December 1, 2008                                    1222                                              2008–48 I.R.B.
2008–48 I.R.B.   1223   December 1, 2008
Extension of Fast Track                          Internal Revenue Service — Appeals         forts to improve tax administration and
Settlement For SB/SE                             Attn: Nancy J. Talajkowski                 enhance customer service. Appeals will
Taxpayers Pilot Program                          160 Spears Street, Suite 800               seek appropriate OIC and TFRP cases for
                                                 San Francisco, CA 94105                    both mediation and arbitration during the
Announcement 2008–110                                                                       two-year test period in order to evaluate
                                                 Alternatively, comments may be sub-        the effectiveness of alternative dispute res-
SUMMARY AND BACKGROUND                        mitted by e-mail to the following address:    olution for such cases.
                                                During the two-year test period, effec-
    This announcement extends the test                                                      tive from the date of publication of this
of the Fast Track Settlement for Small        FURTHER INFORMATION
                                                                                            announcement, Appeals will initially of-
Business/Self-Employed division (SB/SE)           For further information regarding         fer mediation and arbitration for OIC and
Taxpayers Pilot Program set forth in An-      this announcement, contact either:            TFRP cases for taxpayers whose appeals
nouncement 2006–61, 2006–2 C.B. 390,          Xavier Guerrero, SB/SE Program Analyst,       are considered at an Appeals office located
for an additional two-year period, begin-     at (415) 552–6195 (not a toll-free number);   in one of the following cities:
ning on December 1, 2008, the date this       or Nancy J. Talajkowski, Appeals
announcement is published in the Internal     Program Analyst, Tax Policy & Procedure       •   Atlanta, Georgia
Revenue Bulletin.                             (Alternative Dispute Resolution) at (415)     •   Chicago, Illinois
    SB/SE and the Office of Appeals (Ap-      227–5007 (not a toll-free number).            •   Cincinnati, Ohio
peals) concluded a two-year test of the                                                     •   Houston, Texas
Fast Track Settlement for SB/SE Taxpay-                                                     •   Indianapolis, Indiana
ers Pilot Program on September 4, 2008.       Test of Procedures for                        •   Louisville, Kentucky
During the additional two-year test period,
                                              Mediation and Arbitration                     •   Phoenix, Arizona
SB/SE and Appeals will seek additional                                                      •   San Francisco, California
cases for fast track settlement in the same   for Offer in Compromise and
seven cities designated in Ann. 2006–61       Trust Fund Recovery Penalty                       Appeals may expand the availability of
and IR 2007–200, to further evaluate the      Cases in Appeals                              this program to other locations during the
program. The extended program will con-                                                     two-year test period. Upon completion of
tain no changes from the provisions set       Announcement 2008–111                         the two-year test period, Appeals will eval-
forth in Ann. 2006–61.                                                                      uate this program, consider necessary ad-
    This procedure allows taxpayers with      SECTION 1. PURPOSE                            justments to both the mediation and arbi-
eligible cases, as listed in Ann. 2006–61,                                                  tration components of the program, and
under examination by SB/SE to request             Section 7123 requires the Internal Rev-
                                                                                            determine whether to make the arbitration
fast track settlement. Using the services     enue Service to prescribe procedures by
                                                                                            component permanent.
of a trained mediator from Appeals, the       which a taxpayer or the Office of Appeals
taxpayer and SB/SE will attempt to re-        may request non-binding mediation on
                                                                                            SECTION 3. GENERAL SCOPE OF
solve unagreed issues on an expedited ba-     any issue unresolved at the conclusion
                                                                                            MEDIATION AND ARBITRATION
sis. The fast track settlement program is     of Appeals procedures, or unsuccessful
consistent with the Internal Revenue Ser-     attempts to enter into a closing agreement
vice’s efforts to improve tax administra-     under section 7121 or a compromise under
                                                                                               01. The general provisions set forth
tion, provide customer service, and reduce    section 7122. Section 7123 also requires
                                                                                            in Revenue Procedures 2002–44 and
taxpayer burden.                              the Internal Revenue Service to estab-
                                                                                            2006–44 apply to the mediation and ar-
                                              lish a pilot program by which a taxpayer
                                                                                            bitration, respectively, of OIC and TFRP
EFFECTIVE DATE                                and the Office of Appeals may jointly
                                                                                            cases under this two-year pilot program
                                              request binding arbitration for any issue
   This program is effective beginning De-                                                  except as specifically stated herein. In
                                              unresolved under the same circumstances.
cember 1, 2008, the date it is published                                                    accordance with Revenue Procedure
                                              This announcement modifies Revenue
in the Internal Revenue Bulletin, and ap-                                                   2006–44, arbitration is not available for
                                              Procedure 2002–44, 2002–2 C.B. 10, and
plications to the program will be accepted                                                  legal issues.
                                              Revenue Procedure 2006–44, 2006–2 C.B.
through November 30, 2010.                                                                     02. The mediation and arbitration
                                              800, by establishing a two-year test of
                                                                                            procedures do not create any special au-
                                              the mediation and arbitration procedures
COMMENTS                                                                                    thority for settlement by Appeals. During
                                              for Offer in Compromise (OIC) and Trust
                                                                                            the mediation and arbitration processes,
   The Service invites interested persons     Fund Recovery Penalty (TFRP) cases that
                                                                                            Appeals is still subject to the procedures
to comment on this pilot program. Written     are under the jurisdiction of the Office of
                                                                                            that would apply if the issue were be-
comments should be delivered or mailed        Appeals.
                                                                                            ing considered via the standard Appeals
by January 15, 2009, to:                      SECTION 2. DESCRIPTION                        process, including procedures in the In-
                                                                                            ternal Revenue Manual (IRM), found at
                                                 Alternative dispute resolution (ADR),    and
                                              programs are consistent with the IRS’s ef-    other administrative guidance.

December 1, 2008                                               1224                                                2008–48 I.R.B.
    03. The overall determination whether        iv. Cases in which an OIC is submitted as         ria for deviating from national and/or local
a taxpayer was required to collect, truth-           an alternative to collection in a Collec-     expense standards.
fully account for, and pay over income,              tion Due Process or equivalent hear-              04. For cases with liabilities of $50,000
employment or excise taxes, and/or                   ing case;                                     or more, any settlement or agreement
whether a taxpayer willfully failed to col-      v. Cases in which the issue of liability          reached through mediation or arbitration
lect or truthfully account for and pay over          was previously determined by Ap-              must be reviewed by the Office of Chief
such tax or willfully attempted in any               peals; or                                     Counsel pursuant to section 7122(b) be-
manner to evade or defeat the payment of         vi. Cases in which Delegation Order 5–1           fore being finalized. When review is
such tax are legal issues for which arbitra-         requires a level of approval higher           required, Appeals will forward the case to
tion is not available. These legal issues,           than that of the Appeals Team Man-            Area Counsel for an opinion concerning
however, are based on factual components             ager, such as Effective Tax Admin-            whether the case is subject to compromise.
that are eligible for arbitration.                   istration offers or those in which a          See IRM sections and
    04. The overall determination whether            determination is made by Appeals that
a taxpayer’s offer is acceptable under sec-          acceptance is not in the best interest of     SECTION 5. SCOPE OF MEDIATION
tion 7122 may only be made by the Sec-               the government (see Policy Statement          AND ARBITRATION FOR TFRP
retary or his delegate and is not a matter           P–5–100 and IRM                  CASES
for arbitration. See section 7122(a) (giv-
                                                                                                      01. Appropriate issues for mediation in
ing the Secretary the discretionary author-            (2) Meditation is not available for:
                                                                                                   TFRP cases generally include:
ity to compromise tax liabilities) and Del-
                                                                                                      (1) Whether a person was required to
egation Order 5–1 (delegating that discre-       i.     Cases in which the taxpayer has al-
                                                                                                   collect, truthfully account for, and pay
tionary authority to Appeals). Factual de-              ready attempted to resolve the matter
                                                                                                   over income, employment, or excise taxes;
terminations are generally required as part             through Fast Track Mediation.
                                                                                                      (2) Whether a responsible person will-
of making the overall offer acceptability
                                                                                                   fully failed to collect or truthfully account
determination, however, and these individ-             (3) Arbitration is not available for:
                                                                                                   for and pay over such tax, or willfully at-
ual factual determinations are eligible for
                                                                                                   tempted in any manner to evade or defeat
arbitration.                                     i.     Corporate OIC cases in which the is-
                                                                                                   the payment of such tax;
    05. The Appeals Area Director must                  sue to be arbitrated is whether an indi-
                                                                                                      (3) Whether a taxpayer sufficiently des-
approve the acceptance of all cases for me-             vidual is responsible for a Trust Fund
                                                                                                   ignated a payment to the trust fund portion
diation or arbitration.                                 Recovery Penalty or Personal Liabil-
                                                                                                   of the unpaid tax; and
                                                        ity for Excise Tax assessment; or
SECTION 4. SCOPE OF MEDIATION                                                                         (4) Whether the taxpayer provided
                                                 ii.    Doubt as to liability cases.
AND ARBITRATION FOR OIC CASES                                                                      sufficient corporate payroll records to es-
                                                                                                   tablish that a corporate tax deposit was
                                                     02. Provided all facts are known by
   01. In addition to the exclusions con-                                                          in the amount required by Treas. Reg.
                                                 both parties, appropriate issues for medi-
tained in Revenue Procedure 2002–44 and                                                            § 31.6302–1(c) and therefore was consid-
                                                 ation or arbitration in OIC cases generally
Revenue Procedure 2006–44, the follow-                                                             ered a designated payment to be applied to
ing limitations on OIC cases apply:                                                                both the trust fund and non-trust fund por-
                                                     (1) The value of assets, including those
   (1) Neither mediation nor arbitration is                                                        tions of the employment taxes associated
                                                 held by a third party;
available for:                                                                                     with that specific payroll. See the Note to
                                                     (2) The value of dissipated assets and
i.   Cases in which the taxpayer has the         what amount should be included in the
                                                                                                      02. Appropriate issues for arbitration in
     ability to pay in full based on the unad-   overall determination of reasonable collec-
                                                                                                   TFRP cases generally include:
     justed financial information submit-        tion potential;
                                                                                                      (1) Specific factual determinations con-
     ted by the taxpayer, except when eco-           (3) A taxpayer’s proportionate interest
                                                                                                   cerning whether a person was required to
     nomic hardship exists;                      in jointly held assets;
                                                                                                   collect, account for, and pay over income,
ii. Cases in which the taxpayer declines             (4) Projections of future income based
                                                                                                   employment, or excise taxes. Common
     to amend or increase the offer without      on calculations other than current income;
                                                                                                   factors include whether the taxpayer:
     stating any specific disagreement with          (5) The calculation of a taxpayer’s fu-
     the valuations, figures, or methodol-       ture ability to pay when living expenses are      a.   was an officer, director, or shareholder
     ogy used by Appeals in determining          shared with a non-liable person; and                   of the corporation;
     reasonable collection potential;                (6) Other factual determinations, such        b.   had the authority to sign checks;
iii. Cases in which the disputed issue is        as whether a taxpayer’s contributions into        c.   exercised significant control over the
     explicitly addressed in established         a retirement savings account are discre-               corporation’s financial affairs;
     guidance (for example, the issues ad-       tionary or mandatory as a condition of em-        d.   had the authority to determine which
     dressed in the instructions for Form        ployment.                                              creditors would be paid;
     656, “Offer in Compromise,” such as             03. Additionally, provided all facts are      e.   was involved in payroll disburse-
     unsecured debt, college expenses, and       known by both parties, appropriate issues              ments;
     non-qualifying charitable contribu-         for mediation in OIC cases generally in-          f.   had control over the voting stock of
     tions);                                     clude whether the taxpayer meets the crite-            the corporation;

2008–48 I.R.B.                                                        1225                                          December 1, 2008
g.   was involved in making federal tax            03. For an OIC case, the written request     SECTION 8. EFFECTIVE DATE
     deposits; and                              to mediate or arbitrate should include:
h.   had the ability to hire and fire employ-                                                      The procedures in this announcement
                                                a.   The taxpayer’s name, address, and          are effective December 1, 2008.
                                                     taxpayer identification number, and
                                                     the name, title, address, and telephone    SECTION 9. CONTACT
   (2) Specific factual determinations con-
                                                     number of the person to contact;           INFORMATION
cerning whether a responsible person will-
                                                b.   The name of the Appeals Team Man-
fully failed to collect or truthfully account                                                      The principal authors of this announce-
                                                     ager, Appeals Officer, or Settlement
for and pay over such tax, or willfully at-                                                     ment are Dale Veer, Appeals, Tax Policy
tempted in any manner to evade or defeat                                                        and Procedure (Collection & Processing),
                                                c.   The taxable periods involved;
the payment of such tax. Common factors                                                         and Sarah Sheldon, Office of Associate
                                                d.   A detailed description of the issue(s)
to be determined include:                                                                       Chief Counsel (Procedure & Administra-
                                                     for which the taxpayer is requesting
a.   when the taxpayer became aware of               mediation or arbitration, including        tion). For further information regarding
     the failure to pay over the withheld            both the specific dollar amount and        this announcement, contact Dale Veer at
     tax;                                            the basis by which that amount was         (651) 726–7430 or Sarah Sheldon at (202)
b.   whether the taxpayer had knowledge              determined; and                            622–7950 (not toll-free calls).
     of payments to other creditors, includ-    e.   A representation that the disputed is-
     ing employees, after becoming aware             sue is not an excluded issue listed in
     of the failure to pay over the withheld         section 4.01 above or in Revenue Pro-      Unified Rule for Loss on
     tax;                                            cedure 2002–44 or Revenue Proce-           Subsidiary Stock; Correction
c.   whether there were unencumbered                 dure 2006–44.
     funds available to satisfy pre-existing                                                    Announcement 2008–114
     employment tax liabilities; and                04. For a TFRP case, the written re-
                                                quest to mediate or arbitrate should contain    AGENCY: Internal Revenue Service
d.   whether the taxpayer failed to use
                                                items a through e in section 6.03 above and     (IRS), Treasury.
     unencumbered funds to satisfy pre-ex-
     isting tax liabilities after becoming      a detailed explanation of the taxpayer’s po-    ACTION: Correcting amendment.
     aware of such liabilities.                 sition, including explanations of the fol-
                                                lowing (where applicable):                      SUMMARY: This document contains cor-
   (3) A factual determination of the                                                           rections to final regulations (T.D. 9424,
                                                a.   Why the taxpayer was not required to
amount designated by the taxpayer as a                                                          2008–44 I.R.B. 1012) that were published
                                                     collect, truthfully account for, and pay
payment to the trust fund portion of the                                                        in the Federal Register on Wednesday,
                                                     over the income, employment or ex-
unpaid tax; and                                                                                 September 17, 2008 (73 FR 53934) under
                                                     cise taxes;
   (4) A factual determination whether                                                          sections 358, 362(e)(2), and 1502 of the
                                                b.   Why the taxpayer did not willfully fail
the taxpayer provided sufficient corporate                                                      Internal Revenue Code. The final regula-
                                                     to collect or truthfully account for and
payroll records to establish that a corpo-                                                      tions apply to corporations filing consoli-
                                                     pay over such tax, or willfully attempt
rate tax deposit was in the amount required                                                     dated returns, and corporations that enter
                                                     in any manner to evade or defeat the
by Treas. Reg. § 31.6302–1(c) and there-                                                        into certain tax-free reorganizations. The
                                                     payment of such tax; and
fore was considered a designated payment                                                        final regulations provide rules for deter-
                                                c.   Why the computation of the Trust
to be applied to both the trust fund and                                                        mining the tax consequences of a mem-
                                                     Fund Recovery Penalty should reflect
non-trust fund portions of the employment                                                       ber’s transfer (including by deconsolida-
                                                     payment(s) designated specifically to
taxes associated with that specific payroll.                                                    tion and worthlessness) of loss shares of
                                                     the trust fund portion of the unpaid
See Note to IRM                                                                     subsidiary stock. In addition, the final
                                                                                                regulations provide that section 362(e)(2)
SECTION 6. APPLICATION PROCESS                                                                  generally does not apply to transactions
                                                   05. If the taxpayer wants to use a
                                                non-IRS co-mediator (at the taxpayer’s          between members of a consolidated group.
    01. Either the taxpayer or Appeals may
                                                expense) or a non-IRS arbitrator (expense       Finally, the final regulations conform or
submit a request to mediate or arbitrate af-
                                                shared equally by the taxpayer and Ap-          clarify various provisions of the consoli-
ter consulting with and obtaining the con-
                                                peals), the application should state this       dated return regulations, including those
currence of the other party.
                                                preference.                                     relating to adjustments to subsidiary stock
    02. A taxpayer may submit a request to
mediate or arbitrate by sending a written
request to the appropriate Appeals Team         SECTION 7. EFFECT ON OTHER
                                                DOCUMENTS                                       EFFECTIVE DATE: This correction is ef-
Manager and a copy to:                                                                          fective October 20, 2008, and is applicable
    Chief of Appeals                               Revenue Procedure 2002–44 and Rev-           on September 17, 2008.
    Attn: Tax Policy & Procedure —              enue Procedure 2006–44 are modified.
     Collection & Processing                                                                    FOR    FURTHER      INFORMATION
    1099 14th St. NW, Suite 4200 East                                                           CONTACT:     Marcie    P. Barese,
    Washington, DC 20005                                                                        (202) 622–7790, Sean P. Duffley,

December 1, 2008                                                  1226                                                2008–48 I.R.B.
(202) 622–7770, or Theresa Abell (202)              Par. 4. Section 1.1502–19(h)(1) is           (i)(A) of this Example 3, M transferred
622–7700 (none of the numbers are                amended by revising the second sentence         its S share to X in a fully taxable trans-
toll-free).                                      to read as follows:                             action and, as permitted under paragraph
                                                                                                 (b)(1)(ii)(B) of this section, P elected to re-
SUPPLEMENTARY INFORMATION:                       §1.1502–19 Excess loss accounts.                determine basis under this paragraph (b).

Background                                       *****                                           *****
                                                    (h) * * *                                        (c) * * *
   The final regulations that are the sub-          (1) * * * However, taxpayers may ap-             (8) * * *
jects of this document are under sections        ply paragraph (c)(3)(i)(A) of this section to       Example 6. * * *
337, 358, 362, 1502 of the Internal Rev-         transactions that occurred prior to Septem-         (iii) * * *
enue Code.                                       ber 17, 2008.                                       (A) * * * After taking into account the
                                                                                                 effects of all applicable rules of law, M’s
Need for Correction                                                                              basis in the S share at the end of year
                                                    Par. 5. Section 1.1502–33(j)(1) is
                                                                                                 5 is $100 (M’s original $100 basis de-
                                                 amended by revising the last sentence to
  As published, final regulations (T.D.                                                          creased under §1.1502–32 by $40 at the
                                                 read as follows:
9424) contain errors that may prove to be                                                        end of the year 1 and then increased un-
misleading and are in need of clarification.     §1.1502–33 Earnings and profits.                der §1.1502–32 by $40 at end of the year
                                                                                                 5 (the net of the $100 tax exempt income
                                                 *****                                           from the excluded COD applied to reduce
Correction of Publication                           (j) * * *                                    attributes and the $60 noncapital, nonde-
                                                    (1) * * * However, taxpayers may apply       ductible expense from the reduction of S’s
   Accordingly, 26 CFR part 1 is cor-            paragraph (e)(2)(i)(A) of this section with     portion of the CNOL)).* * *
rected by making the following correcting        respect to determinations of the earnings       *****
amendments:                                      and profits of a member in consolidated            (d) * * *
                                                 return years beginning prior to September          (3) * * *
PART 1—INCOME TAXES                              17, 2008.                                          (i) * * *
                                                 *****                                              (B) S’s aggregate inside loss (as defined
   Paragraph 1. The authority citation for                                                       in paragraph (d)(3)(iii) of this section).
                                                     Par. 6. Section 1.1502–36 is amended
part 1 continues to read, in part, as follows:
                                                 by revising the last sentence of the para-      *****
   Authority: 26 U.S.C. 7805 * * *
                                                 graph (b)(3) Example 3.(i)(D); the fourth           (5) * * *
   Par.    2.    Section 1.358–6(f)(3) is
                                                 sentence of the paragraph (c)(8) Exam-              (ii) * * * S’s attribute reduction amount
amended by revising the last sentence to
                                                 ple 6.(iii)(A); the only sentence of the        is allocated proportionately (by basis) be-
read as follows:
                                                 paragraph (d)(3)(i)(B); the third through       tween (among) the non-stock Category
§1.358–6 Stock basis in certain triangular       fifth sentences of the paragraph (d)(5)(ii);    D asset and S’s deemed single share(s)
reorganizations.                                 the third sentence of the paragraph (d)(8)      of subsidiary stock.          (See paragraphs
                                                 Example 6.(ii)(B); the second sentence of       (d)(4)(ii)(B)(2) and (d)(4)(ii)(C) of this
*****                                            the paragraph (d)(8) Example 6.(ii)(D)(3);      section regarding the portion of S’s at-
   (f) * * *                                     the fifth sentence of the paragraph (d)(8)      tribute reduction amount allocated to the
   (3) * * * However, taxpayers may apply        Example 8.(i)(F); the first sentence of         Category D assets other than lower-tier
paragraph (b)(2)(v) of this section to tri-      the paragraph (d)(8) Example 8.(ii)(E);         subsidiary stock.) For allocation purposes,
angular reorganizations occurring before         the first sentence of the paragraph (d)(8)      S’s basis in each deemed single share
September 17, 2008 and on or after De-           Example 8.(ii)(F); the first sentence of        of S1 stock is its deemed basis (deter-
cember 23, 1994.                                 the paragraph (d)(8) Example 9.(ii); the        mined under paragraphs (d)(5)(i)(B) and
   Par. 3. Section 1.1502–13(l)(1) is            second sentence of the paragraph (g)(2)         (d)(5)(i)(C) of this section), reduced by—
amended by revising the last sentence to         Example 5.(i); and the third sentence of
read as follows:                                 the paragraph (g)(2) Example 5.(iii) to
                                                                                                    (8) * * *
                                                 read as follows:
                                                                                                    Example 6. * * *
§1.1502–13 Intercompany transactions.
                                                 §1.1502–36 Unified loss rule.                      (ii) * * *
                                                                                                    (B) * * * However, S’s gain recognized
                                                 *****                                           on the transfer of Share E is computed
   (l) * * *
                                                     (b) * * *                                   and immediately adjusts members’ bases
   (1) * * * However, taxpayers may ap-
                                                     (3) * * *                                   in subsidiary stock under §1.1502–32 (be-
ply paragraph (j)(5)(i)(A) of this section to
                                                     Example 3. * * *                            cause M and S are not members of the
transactions that occurred prior to Septem-
                                                     (i) * * *                                   same group immediately after the transac-
ber 17, 2008.
                                                     (D) * * * The results would be the same     tion, the sale is not an intercompany trans-
*****                                            if, in addition to the facts in paragraph       action subject to §1.1502–13).

2008–48 I.R.B.                                                     1227                                            December 1, 2008
*****                                                         ACTION: Advanced notice of proposed           lease, ownership, or use of toll roads, toll
   (D) * * *                                                  rulemaking.                                   bridges, and certain other physical infra-
   (3) * * * See paragraph (d)(5)(v)(A) of                                                                  structure. The proposed regulations would
this section.                                                 SUMMARY: This document describes              amend the § 1.897–1 regulations.
                                                              issues that the IRS and the Treasury
*****                                                         Department are considering address-           Transactions at Issue
    Example 8. * * *                                          ing, in a notice of proposed rulemaking
    (F)      *        *       *       Under                   (REG–130342–08), under section 897                In a typical transaction at issue, a
§1.1502–32(c)(1)(ii)(A)(1)      this    $90                   of the Internal Revenue Code (Code) re-       domestic partnership (DP) leases or pur-
expense is allocated to the transferred loss                  garding the definition of an interest in      chases from an unrelated party infrastruc-
shares of S stock in proportion to the loss                   real property. The notice of proposed         ture assets and any land underlying these
in the shares, or $.90 per share.                             rulemaking would address certain rights       infrastructure assets (together, specified
                                                              granted by a governmental unit that are       infrastructure) within the United States.
                                                              related to the lease, ownership, or use of    The DP’s partners include domestic cor-
   (ii) * * *
                                                              real property. This document also invites     porations with foreign shareholders. Ex-
   (E) * * * The facts are the same as in
                                                              comments from the public regarding these      amples of specified infrastructure include
paragraph (ii)(A) of this Example 8, except
                                                              contemplated rules. All materials submit-     a toll road or toll bridge.
that P elects under paragraph (d)(6) of this
                                                              ted will be available for public inspection       Often, as a condition to operating the
section to reduce M’s basis in the S shares
                                                              and copying.                                  specified infrastructure and to collecting
by the full attribute reduction amount of
                                                                                                            tolls for its use, DP is also required to ob-
$22, in lieu of S reducing its attributes.* * *
                                                              DATES: Written and electronic comments        tain a governmental license, permit, fran-
   (F) * * * The facts are the same as in
                                                              must be submitted by January 29, 2009.        chise, or other similar right (governmental
paragraph (ii)(A) of this Example 8.
                                                                                                            permit). The DP may also own or acquire
   Example 9. * * *                                           ADDRESSES: Send submissions to:               property that would be used in the trade or
   (ii) * * * However, S1’s gain recognized                   CC:PA:LPD:PR (REG–130342–08), room            business of operating the specified infra-
on the transfer of the S2 share is computed                   5203, Internal Revenue Service, PO Box        structure, such as signs, snow plows, and
and immediately adjusts members’ bases                        7604, Ben Franklin Station, Washing-          electronic sensors.
in subsidiary stock under §1.1502–32.                         ton DC 20044. Submissions may be                  The physical attributes of the specified
*****                                                         hand-delivered Monday through Friday          infrastructure, for example, a relatively
    (g) * * *                                                 between the hours of 8 a.m. and 4 p.m.        narrow roadway, and terms and conditions
    (2) * * *                                                 to CC:PA:LPD:PR (REG–130342–08),              related to the specified infrastructure, for
    Example 5. * * *                                          Courier’s Desk, Internal Revenue Ser-         example, that the lessee is required to
    (i) * * * S owns Asset 1 with a basis of                  vice, 1111 Constitution Avenue, NW,           maintain and operate a roadway, mean that
$100 and a value of $20.* * *                                 Washington, DC, or sent electroni-            in many cases there may practically be
    (iii) * * * However, because all the                      cally via the Federal eRulemaking Por-        no potential alternative commercial uses
shares are transferred, the group’s income                    tal at (IRS and           for the specified infrastructure. In those
is clearly reflected.                                         REG–130342–08).                               cases, the value of the leasehold interest in
                                                              FOR       FURTHER       INFORMATION           the specified infrastructure derives from
                                                              CONTACT: Concerning the proposals,            the right to charge and collect tolls.
                         LaNita Van Dyke,                     Jeffrey P. Cowan at (202) 622–3850; con-
                    Chief, Publications and                   cerning submissions, Richard A. Hurst at
                        Regulations Branch,                   (202) 622–7180 (TDD Telephone) (not              Section 897(a)(1) of the Code treats
                  Legal Processing Division,                  toll-free numbers) and his e-mail address     the gain or loss of a nonresident alien or
                    Associate Chief Counsel                   is      foreign corporation from the disposition
             (Procedure and Administration).                                                                of a U.S. real property interest (USRPI)
                                                              SUPPLEMENTARY INFORMATION:
(Filed by the Office of the Federal Register on October 17,
                                                                                                            as if the taxpayer were engaged in a trade
2008, 8:45 a.m., and published in the issue of the Federal    Overview                                      or business in the United States, and
Register for October 20, 2008, 73 F.R. 62204)
                                                                                                            as if such gain or loss were effectively
                                                                 This document describes issues that        connected with such trade or business
                                                              the IRS and the Treasury Department           under sections 871(b) or 882. In gen-
Infrastructure Improvements                                   are considering addressing, in a notice       eral, a USRPI includes an interest in real
Under Section 897                                             of proposed rulemaking, regarding the         property located in the United States or
                                                              definition of an interest in real property    the Virgin Islands, and any interest (other
Announcement 2008–115                                         within the meaning of section 897(c) of the   than an interest solely as a creditor) in a
                                                              Code. The notice of proposed rulemaking       domestic corporation unless the taxpayer
AGENCY: Internal Revenue Service                              would address certain rights granted by a     establishes that the corporation was at
(IRS), Treasury.                                              governmental unit that are related to the     no time a U.S. real property holding

December 1, 2008                                                               1228                                                2008–48 I.R.B.
corporation (USRPHC) within the period          held by a partnership, trust, or estate are       mestic corporation to which such a right
described in section 897(c)(1)(A)(ii).          generally treated as held proportionately         was attributed under section 897(c)(4)(B)
Section 897(c)(1)(A).                           by its partners or beneficiaries. Section         would be treated as a USRPHC under sec-
    Real property includes land and unsev-      897(c)(4)(B) and § 1.897–2(e)(2). The             tion 897(c)(2).
ered natural products of the land, improve-     interest in the entity itself is disregarded          The IRS and the Treasury Department,
ments, and personal property associated         when a proportionate share of the entity’s        however, are of the view that in some of
with the use of real property. Section          assets are attributed to the interest-holder.     the transactions at issue the governmental
1.897–1(b)(1). Section 1.897–1(b)(1) pro-       Section 1.897–2(e)(2). Further, any asset         permit may properly be characterized as a
vides that local law definitions will not       treated as held by a partner or beneficiary       USRPI. Accordingly, the IRS and the Trea-
be controlling for purposes of determin-        by reason of this rule which is used or held      sury Department are considering issuing
ing the meaning of the term “real prop-         for use by the partnership, trust, or estate in   proposed regulations regarding the defi-
erty” as it is used under section 897 and       a trade or business is treated as so used or      nition of an interest in real property that
the regulations thereunder. The regula-         held by the partner or beneficiary. Section       would address certain licenses, permits,
tions define an “improvement” as a build-       897(c)(4)(B) and § 1.897–2(e)(2). The             franchises, or other similar rights granted
ing, any other inherently permanent struc-      proportionate ownership rules of Section          by a governmental unit (including, for pur-
ture, or the structural components of either.   897(c)(4)(B) and § 1.897–2(e)(2) apply            poses of section 897, an agency or instru-
Section 1.897–1(b)(3). For this purpose,        successively upward through a chain of            mentality thereof) that are related to the
an inherently permanent structure includes      ownership. Section 1.897–2(e)(2).                 value of the use or ownership of an inter-
any property not otherwise described in                                                           est in real property. The proposed regu-
§ 1.897–1(b)(3) that is affixed to real prop-   Explanation of Contemplated                       lations would address how the fair market
erty and that will ordinarily remain affixed    Regulations                                       value of such licenses, permits, franchises,
for an indefinite period of time. Further,                                                        or other similar rights should be taken into
§ 1.897–1(b)(3)(iii)(B) provides that an in-        The IRS and the Treasury Department           account when determining the fair market
herently permanent structure includes, for      are aware that in the transactions at issue       value of a corporation’s USRPIs and in-
example, pavements and bridges.                 taxpayers may be taking the position that         terests in real property located outside the
    The Code defines an “interest in real       for purposes of section 897 the govern-           United States under section 897(c)(2).
property” to include fee ownership and          mental permit is not a USRPI within the
co-ownership of land or improvements            meaning of section 897(c). Instead, these         Proposed Effective Date
thereon, leaseholds of land or improve-         taxpayers may take the position that the
ments thereon, options to acquire land or       governmental permit is an asset used or              The IRS and the Treasury Department
improvements thereon, and options to ac-        held for use in a trade or business. Fur-         anticipate that the proposed regulations
quire leaseholds of land or improvements        ther, these taxpayers may take the position       would apply for transactions occurring
thereon. Section 897(c)(6)(A). Section          that a significant portion of the fair mar-       on or after the date of publication in the
1.897–1(c)(1) further provides that the         ket value of a DP’s assets is allocable to        Federal Register as final or temporary
term USRPI also includes any interest,          the governmental permit rather than to the        regulations. No inference is intended as
other than an interest solely as a credi-       assets comprising the specified infrastruc-       to how these arrangements are treated or
tor, in real property located in the United     ture.                                             characterized under current law.
States or the Virgin Islands. Section               As noted in the Background section, un-
1.897–1(d)(2)(i) provides that an inter-        der section 897(c)(2), a corporation is a         Request for Comments
est in real property other than an interest     USRPHC only if the fair market value of
solely as a creditor includes any direct or     its USRPIs equals or exceeds 50 percent              Before the notice of proposed rulemak-
indirect right to share in the appreciation     of the fair market value of its USRPIs plus       ing is issued, consideration will be given
in the value, or in the gross or net proceeds   its interests in real property located out-       to any written comments (a signed origi-
or profits generated by, the real property.     side the United States, plus any other of         nal and eight (8) copies) or electronic com-
    A USRPHC is generally defined as a          its assets which are used or held for use in      ments that are timely submitted to the IRS.
corporation the fair market value of whose      a trade or business. Therefore, if the fair       All comments will be available for public
USRPIs equals or exceeds 50 percent of          market value of the governmental permit           inspection and copying.
the fair market value of its worldwide          were treated as an asset used or held for use        The IRS and Treasury Department
interests in real property, including its       in a trade or business, and not a USRPI, the      specifically request comments on:
USRPIs, plus its other assets which are         governmental permit would be taken into
used or held for use in a trade or busi-        account in the denominator, but not the           1.   The scope of this regulatory project,
ness. Section 897(c)(2). For this purpose,      numerator, of the calculation provided for             the types of licenses, permits, fran-
assets used or held for use in a trade or       in section 897(c)(2) in order to determine             chises, or other similar rights granted
business include, among other things,           whether any domestic corporation that is a             by a governmental unit with respect to
certain intangible property described in        partner in a DP is a USRPHC. Accounting                specified infrastructure that might be
§ 1.897–1(f)(1)(ii).                            for the governmental permit in this manner             treated as related to the value of the
    For purposes of determining whether         for purposes of the section 897(c)(2) cal-             lease, ownership, or use of an interest
any corporation is a USRPHC, assets             culation reduces the likelihood that a do-             in real property, and what character-

2008–48 I.R.B.                                                     1229                                            December 1, 2008
      istics should be taken into account in                  Section 108 Reduction of Tax                SUPPLEMENTARY INFORMATION:
      making that determination.                              Attributes for S Corporations;
2.    Whether this regulatory project                                                                        A notice of proposed rulemaking and
                                                              Hearing Cancellation                        a notice of public hearing that appeared
      should address the allocation of the
      consideration paid for the lease or                                                                 in the Federal Register on Wednesday,
                                                              Announcement 2008–116                       August 6, 2008 (73 FR 45656) announced
      purchase of a specified infrastructure
      and the license, permit, franchise,                     AGENCY: Internal Revenue Service            that a public hearing was scheduled for
      or other similar right to operate that                  (IRS), Treasury                             December 8, 2008, at 10 a.m. in the IRS
      specified infrastructure for purposes                                                               Auditorium, Internal Revenue Building,
      of determining the fair market value                    ACTION: Cancellation of notice of public    1111 Constitution Avenue, NW, Washing-
      of such property.                                       hearing on proposed rulemaking.             ton, DC. The subject of the public hearing
          In regard to the allocation of pur-                                                             is under section 108 of the Internal Rev-
      chase price, comments are also sought                   SUMMARY: This document cancels a            enue Code.
      as to whether, for purposes of allocat-                 public hearing on proposed rulemaking          The public comment period for the pro-
      ing the consideration paid for a lease                  (REG–102822–08, 2008–38 I.R.B. 744)         posed rulemaking expired on November 4,
      of the specified infrastructure and the                 that provides guidance on the manner in     2008. The notice of proposed rulemak-
      license, permit, franchise, or other                    which an S corporation reduces its tax      ing and notice of public hearing instructed
      similar right to operate that specified                 attributes under section 108(b) for tax-    those interested in testifying at the public
      infrastructure, the length of the lease                 able years in which the S corporation has   hearing to submit an outline of the topics to
      (including whether the lease is for the                 discharge of indebteness income that is     be addressed. As of Thursday, November
      useful life of the property) should be                  excluded from gross income under section    13, 2008, no one has requested to speak.
      taken into account.                                     108(a).                                     Therefore, the public hearing scheduled
                                                                                                          for December 8, 2008, is cancelled.
                                Linda E. Stiff,               DATES: The public hearing, originally
                     Deputy Commissioner for                  scheduled for December 8, 2008 at 10 a.m.                            LaNita Van Dyke,
                     Services and Enforcement.                is cancelled.                                                   Chief, Publications and
                                                                                                                                  Regulations Branch,
(Filed by the Office of the Federal Register on October 30,   FOR      FURTHER         INFORMATION                          Legal Processing Division,
2008, 8:45 a.m., and published in the issue of the Federal
Register for October 31, 2008, 73 F.R. 64901)                 CONTACT: Funmi Taylor of the Publica-                           Associate Chief Counsel
                                                              tions and Regulations Branch, Legal Pro-                 (Procedure and Administration).
                                                              cessing Division, Associate Chief Counsel
                                                                                                          (Filed by the Office of the Federal Register on November 19,
                                                              (Procedure and Administration) at (202)     2008, 8:45 a.m., and published in the issue of the Federal
                                                              622–7180 (not a toll-free number).          Register for November 20, 2008, 73 F.R. 70289)

December 1, 2008                                                              1230                                                       2008–48 I.R.B.
Definition of Terms
Revenue rulings and revenue procedures           and B, the prior ruling is modified because      of a prior ruling, a combination of terms
(hereinafter referred to as “rulings”) that      it corrects a published position. (Compare       is used. For example, modified and su-
have an effect on previous rulings use the       with amplified and clarified, above).            perseded describes a situation where the
following defined terms to describe the ef-          Obsoleted describes a previously pub-        substance of a previously published ruling
fect:                                            lished ruling that is not considered deter-      is being changed in part and is continued
    Amplified describes a situation where        minative with respect to future transac-         without change in part and it is desired to
no change is being made in a prior pub-          tions. This term is most commonly used in        restate the valid portion of the previously
lished position, but the prior position is be-   a ruling that lists previously published rul-    published ruling in a new ruling that is self
ing extended to apply to a variation of the      ings that are obsoleted because of changes       contained. In this case, the previously pub-
fact situation set forth therein. Thus, if       in laws or regulations. A ruling may also        lished ruling is first modified and then, as
an earlier ruling held that a principle ap-      be obsoleted because the substance has           modified, is superseded.
plied to A, and the new ruling holds that the    been included in regulations subsequently            Supplemented is used in situations in
same principle also applies to B, the earlier    adopted.                                         which a list, such as a list of the names of
ruling is amplified. (Compare with modi-             Revoked describes situations where the       countries, is published in a ruling and that
fied, below).                                    position in the previously published ruling      list is expanded by adding further names in
    Clarified is used in those instances         is not correct and the correct position is       subsequent rulings. After the original rul-
where the language in a prior ruling is be-      being stated in a new ruling.                    ing has been supplemented several times, a
ing made clear because the language has              Superseded describes a situation where       new ruling may be published that includes
caused, or may cause, some confusion.            the new ruling does nothing more than re-        the list in the original ruling and the ad-
It is not used where a position in a prior       state the substance and situation of a previ-    ditions, and supersedes all prior rulings in
ruling is being changed.                         ously published ruling (or rulings). Thus,       the series.
    Distinguished describes a situation          the term is used to republish under the              Suspended is used in rare situations to
where a ruling mentions a previously pub-        1986 Code and regulations the same po-           show that the previous published rulings
lished ruling and points out an essential        sition published under the 1939 Code and         will not be applied pending some future
difference between them.                         regulations. The term is also used when          action such as the issuance of new or
    Modified is used where the substance         it is desired to republish in a single rul-      amended regulations, the outcome of cases
of a previously published position is being      ing a series of situations, names, etc., that    in litigation, or the outcome of a Service
changed. Thus, if a prior ruling held that a     were previously published over a period of       study.
principle applied to A but not to B, and the     time in separate rulings. If the new rul-
new ruling holds that it applies to both A       ing does more than restate the substance

The following abbreviations in current use       ER—Employer.                                     PRS—Partnership.
and formerly used will appear in material        ERISA—Employee Retirement Income Security Act.   PTE—Prohibited Transaction Exemption.
                                                 EX—Executor.                                     Pub. L.—Public Law.
published in the Bulletin.
                                                 F—Fiduciary.                                     REIT—Real Estate Investment Trust.
                                                 FC—Foreign Country.                              Rev. Proc.—Revenue Procedure.
                                                 FICA—Federal Insurance Contributions Act.        Rev. Rul.—Revenue Ruling.
B—Individual.                                    FISC—Foreign International Sales Company.        S—Subsidiary.
                                                 FPH—Foreign Personal Holding Company.            S.P.R.—Statement of Procedural Rules.
                                                 F.R.—Federal Register.                           Stat.—Statutes at Large.
B.T.A.—Board of Tax Appeals.                     FUTA—Federal Unemployment Tax Act.               T—Target Corporation.
                                                 FX—Foreign corporation.                          T.C.—Tax Court.
                                                 G.C.M.—Chief Counsel’s Memorandum.               T.D. —Treasury Decision.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.                 GE—Grantee.                                      TFE—Transferee.
                                                 GP—General Partner.                              TFR—Transferor.
                                                 GR—Grantor.                                      T.I.R.—Technical Information Release.
Ct.D.—Court Decision.                            IC—Insurance Company.                            TP—Taxpayer.
                                                 I.R.B.—Internal Revenue Bulletin.                TR—Trust.
                                                 LE—Lessee.                                       TT—Trustee.
DC—Dummy Corporation.                            LP—Limited Partner.                              U.S.C.—United States Code.
                                                 LR—Lessor.                                       X—Corporation.
                                                 M—Minor.                                         Y—Corporation.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.   Nonacq.—Nonacquiescence.                         Z —Corporation.
                                                 P—Parent Corporation.
                                                 PHC—Personal Holding Company.
                                                 PO—Possession of the U.S.
E.O.—Executive Order.

2008–48 I.R.B.                                                         i                                          December 1, 2008
Numerical Finding List1                                       Announcements— Continued:                                     Notices— Continued:
                                                              2008-114, 2008-48 I.R.B. 1226                                 2008-102, 2008-45 I.R.B. 1106
Bulletins 2008–27 through 2008–48
                                                              2008-115, 2008-48 I.R.B. 1228                                 2008-103, 2008-46 I.R.B. 1156
Announcements:                                                2008-116, 2008-48 I.R.B. 1230                                 2008-105, 2008-48 I.R.B. 1208

2008-62, 2008-27 I.R.B. 74                                    Court Decisions:                                              Proposed Regulations:
2008-63, 2008-28 I.R.B. 114
                                                              2087, 2008-41 I.R.B. 845                                      REG-209006-89, 2008-41 I.R.B. 867
2008-64, 2008-28 I.R.B. 114
                                                                                                                            REG-157711-02, 2008-44 I.R.B. 1087
2008-65, 2008-31 I.R.B. 279                                   Notices:
                                                                                                                            REG-143544-04, 2008-42 I.R.B. 947
2008-66, 2008-29 I.R.B. 164
                                                              2008-55, 2008-27 I.R.B. 11                                    REG-160868-04, 2008-45 I.R.B. 1115
2008-67, 2008-29 I.R.B. 164
                                                              2008-56, 2008-28 I.R.B. 79                                    REG-161695-04, 2008-37 I.R.B. 699
2008-68, 2008-30 I.R.B. 244
                                                              2008-57, 2008-28 I.R.B. 80                                    REG-164965-04, 2008-34 I.R.B. 450
2008-69, 2008-32 I.R.B. 318
                                                              2008-58, 2008-28 I.R.B. 81                                    REG-142339-05, 2008-45 I.R.B. 1116
2008-70, 2008-32 I.R.B. 318
                                                              2008-59, 2008-29 I.R.B. 123                                   REG-143453-05, 2008-32 I.R.B. 310
2008-71, 2008-32 I.R.B. 321
                                                              2008-60, 2008-30 I.R.B. 178                                   REG-146895-05, 2008-37 I.R.B. 700
2008-72, 2008-32 I.R.B. 321
                                                              2008-61, 2008-30 I.R.B. 180                                   REG-155087-05, 2008-38 I.R.B. 726
2008-73, 2008-33 I.R.B. 391
                                                              2008-62, 2008-29 I.R.B. 130                                   REG-164370-05, 2008-46 I.R.B. 1157
2008-74, 2008-33 I.R.B. 392
                                                              2008-63, 2008-31 I.R.B. 261                                   REG-142680-06, 2008-35 I.R.B. 565
2008-75, 2008-33 I.R.B. 392
                                                              2008-64, 2008-31 I.R.B. 268                                   REG-156779-06, 2008-46 I.R.B. 1160
2008-76, 2008-33 I.R.B. 393
                                                              2008-65, 2008-30 I.R.B. 182                                   REG-120476-07, 2008-36 I.R.B. 679
2008-77, 2008-33 I.R.B. 394
                                                              2008-66, 2008-31 I.R.B. 270                                   REG-120844-07, 2008-39 I.R.B. 770
2008-78, 2008-34 I.R.B. 453
                                                              2008-67, 2008-32 I.R.B. 307                                   REG-128841-07, 2008-45 I.R.B. 1124
2008-79, 2008-35 I.R.B. 568
                                                              2008-68, 2008-34 I.R.B. 418                                   REG-129243-07, 2008-27 I.R.B. 32
2008-80, 2008-37 I.R.B. 706
                                                              2008-69, 2008-34 I.R.B. 419                                   REG-138355-07, 2008-32 I.R.B. 311
2008-81, 2008-37 I.R.B. 706
                                                              2008-70, 2008-36 I.R.B. 575                                   REG-140029-07, 2008-40 I.R.B. 828
2008-82, 2008-37 I.R.B. 708
                                                              2008-71, 2008-35 I.R.B. 462                                   REG-142040-07, 2008-34 I.R.B. 451
2008-83, 2008-37 I.R.B. 709
                                                              2008-72, 2008-43 I.R.B. 998                                   REG-142333-07, 2008-43 I.R.B. 1008
2008-84, 2008-38 I.R.B. 748
                                                              2008-73, 2008-38 I.R.B. 717                                   REG-149404-07, 2008-40 I.R.B. 839
2008-85, 2008-38 I.R.B. 749
                                                              2008-74, 2008-38 I.R.B. 718                                   REG-149405-07, 2008-27 I.R.B. 73
2008-86, 2008-40 I.R.B. 843
                                                              2008-75, 2008-38 I.R.B. 719                                   REG-100464-08, 2008-32 I.R.B. 313
2008-87, 2008-40 I.R.B. 843
                                                              2008-76, 2008-39 I.R.B. 768                                   REG-101258-08, 2008-28 I.R.B. 111
2008-88, 2008-40 I.R.B. 843
                                                              2008-77, 2008-40 I.R.B. 814                                   REG-102122-08, 2008-31 I.R.B. 278
2008-89, 2008-40 I.R.B. 844
                                                              2008-78, 2008-41 I.R.B. 851                                   REG-102822-08, 2008-38 I.R.B. 744
2008-90, 2008-41 I.R.B. 896
                                                              2008-79, 2008-40 I.R.B. 815                                   REG-103146-08, 2008-37 I.R.B. 701
2008-91, 2008-42 I.R.B. 963
                                                              2008-80, 2008-40 I.R.B. 820                                   REG-106251-08, 2008-39 I.R.B. 774
2008-92, 2008-42 I.R.B. 963
                                                              2008-81, 2008-41 I.R.B. 852                                   REG-107318-08, 2008-45 I.R.B. 1131
2008-93, 2008-41 I.R.B. 896
                                                              2008-82, 2008-41 I.R.B. 853                                   REG-115457-08, 2008-33 I.R.B. 390
2008-94, 2008-42 I.R.B. 964
                                                              2008-83, 2008-42 I.R.B. 905                                   REG-118327-08, 2008-48 I.R.B. 1218
2008-95, 2008-42 I.R.B. 964
                                                              2008-84, 2008-41 I.R.B. 855                                   REG-121698-08, 2008-29 I.R.B. 163
2008-96, 2008-43 I.R.B. 1010
                                                              2008-85, 2008-42 I.R.B. 905
2008-97, 2008-43 I.R.B. 1010                                                                                                Revenue Procedures:
2008-98, 2008-44 I.R.B. 1087                                  2008-86, 2008-42 I.R.B. 925
2008-99, 2008-44 I.R.B. 1089                                  2008-87, 2008-42 I.R.B. 930                                   2008-32, 2008-28 I.R.B. 82
2008-100, 2008-44 I.R.B. 1090                                 2008-88, 2008-42 I.R.B. 933                                   2008-33, 2008-28 I.R.B. 93
2008-101, 2008-44 I.R.B. 1090                                 2008-89, 2008-43 I.R.B. 999                                   2008-34, 2008-27 I.R.B. 13
2008-102, 2008-43 I.R.B. 1011                                 2008-90, 2008-43 I.R.B. 1000                                  2008-35, 2008-29 I.R.B. 132
2008-103, 2008-46 I.R.B. 1161                                 2008-91, 2008-43 I.R.B. 1001                                  2008-36, 2008-33 I.R.B. 340
2008-104, 2008-45 I.R.B. 1136                                 2008-92, 2008-43 I.R.B. 1001                                  2008-37, 2008-29 I.R.B. 137
2008-105, 2008-48 I.R.B. 1219                                 2008-93, 2008-43 I.R.B. 1002                                  2008-38, 2008-29 I.R.B. 139
2008-106, 2008-45 I.R.B. 1137                                 2008-94, 2008-44 I.R.B. 1070                                  2008-39, 2008-29 I.R.B. 143
2008-107, 2008-46 I.R.B. 1162                                 2008-95, 2008-44 I.R.B. 1076                                  2008-40, 2008-29 I.R.B. 151
2008-108, 2008-46 I.R.B. 1165                                 2008-96, 2008-44 I.R.B. 1077                                  2008-41, 2008-29 I.R.B. 155
2008-109, 2008-46 I.R.B. 1166                                 2008-97, 2008-44 I.R.B. 1080                                  2008-42, 2008-29 I.R.B. 160
2008-110, 2008-48 I.R.B. 1224                                 2008-98, 2008-44 I.R.B. 1080                                  2008-43, 2008-30 I.R.B. 186
2008-111, 2008-48 I.R.B. 1224                                 2008-99, 2008-47 I.R.B. 1194                                  2008-44, 2008-30 I.R.B. 187
2008-112, 2008-47 I.R.B. 1199                                 2008-100, 2008-44 I.R.B. 1081                                 2008-45, 2008-30 I.R.B. 224
2008-113, 2008-47 I.R.B. 1199                                 2008-101, 2008-44 I.R.B. 1082                                 2008-46, 2008-30 I.R.B. 238

1A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2008–1 through 2008–26 is in Internal Revenue Bulletin
2008–26, dated June 30, 2008.

December 1, 2008                                                                          ii                                                             2008–48 I.R.B.
Revenue Procedures— Continued:             Treasury Decisions— Continued:
2008-47, 2008-31 I.R.B. 272                9408, 2008-33 I.R.B. 323
2008-48, 2008-36 I.R.B. 586                9409, 2008-29 I.R.B. 118
2008-49, 2008-34 I.R.B. 423                9410, 2008-34 I.R.B. 414
2008-50, 2008-35 I.R.B. 464                9411, 2008-34 I.R.B. 398
2008-51, 2008-35 I.R.B. 562                9412, 2008-37 I.R.B. 687
2008-52, 2008-36 I.R.B. 587                9413, 2008-34 I.R.B. 404
2008-53, 2008-36 I.R.B. 678                9414, 2008-35 I.R.B. 454
2008-54, 2008-38 I.R.B. 722                9415, 2008-36 I.R.B. 570
2008-55, 2008-39 I.R.B. 768                9416, 2008-46 I.R.B. 1142
2008-56, 2008-40 I.R.B. 826                9417, 2008-37 I.R.B. 693
2008-57, 2008-41 I.R.B. 855                9418, 2008-38 I.R.B. 713
2008-58, 2008-41 I.R.B. 856                9419, 2008-40 I.R.B. 790
2008-59, 2008-41 I.R.B. 857                9420, 2008-39 I.R.B. 750
2008-60, 2008-43 I.R.B. 1006               9421, 2008-39 I.R.B. 755
2008-61, 2008-42 I.R.B. 934                9422, 2008-42 I.R.B. 898
2008-62, 2008-42 I.R.B. 935                9423, 2008-43 I.R.B. 966
2008-63, 2008-42 I.R.B. 946                9424, 2008-44 I.R.B. 1012
2008-64, 2008-47 I.R.B. 1195               9425, 2008-45 I.R.B. 1100
2008-65, 2008-44 I.R.B. 1082               9426, 2008-46 I.R.B. 1153
2008-66, 2008-45 I.R.B. 1107               9427, 2008-47 I.R.B. 1179
2008-67, 2008-48 I.R.B. 1211               9428, 2008-47 I.R.B. 1174
2008-69, 2008-48 I.R.B. 1217               9429, 2008-47 I.R.B. 1167
                                           9430, 2008-48 I.R.B. 1205
Revenue Rulings:

2008-32, 2008-27 I.R.B. 6
2008-33, 2008-27 I.R.B. 8
2008-34, 2008-28 I.R.B. 76
2008-35, 2008-29 I.R.B. 116
2008-36, 2008-30 I.R.B. 165
2008-37, 2008-28 I.R.B. 77
2008-38, 2008-31 I.R.B. 249
2008-39, 2008-31 I.R.B. 252
2008-40, 2008-30 I.R.B. 166
2008-41, 2008-30 I.R.B. 170
2008-42, 2008-30 I.R.B. 175
2008-43, 2008-31 I.R.B. 258
2008-44, 2008-32 I.R.B. 292
2008-45, 2008-34 I.R.B. 403
2008-46, 2008-36 I.R.B. 572
2008-47, 2008-39 I.R.B. 760
2008-48, 2008-38 I.R.B. 713
2008-49, 2008-40 I.R.B. 811
2008-50, 2008-45 I.R.B. 1098
2008-51, 2008-47 I.R.B. 1171

Social Security Contribution and Benefit
Base; Domestic Employee Coverage

2008-103, 2008-46 I.R.B. 1156

Treasury Decisions:

9401, 2008-27 I.R.B. 1
9402, 2008-31 I.R.B. 254
9403, 2008-32 I.R.B. 285
9404, 2008-32 I.R.B. 280
9405, 2008-32 I.R.B. 293
9406, 2008-32 I.R.B. 287
9407, 2008-33 I.R.B. 330

2008–48 I.R.B.                                                    iii       December 1, 2008
Finding List of Current Actions on                               Notices— Continued:                                            Revenue Procedures— Continued:
Previously Published Items1                                      2008-41                                                        2002-44
                                                                 Amended and supplemented by                                    Modified by
Bulletins 2008–27 through 2008–48                                Notice 2008-88, 2008-42 I.R.B. 933                             Ann. 2008-111, 2008-48 I.R.B. 1224
Announcements:                                                   Proposed Regulations:                                          2002-64
                                                                                                                                Superseded by
                                                                 REG-161695-04                                                  Rev. Proc. 2008-55, 2008-39 I.R.B. 768
Superseded by
                                                                 Corrected by
Ann. 2008-95, 2008-42 I.R.B. 964                                                                                                2004-44
                                                                 Ann. 2008-92, 2008-42 I.R.B. 963
                                                                                                                                Superseded by
                                                                 REG-143453-05                                                  Rev. Proc. 2008-67, 2008-48 I.R.B. 1211
Corrected by
                                                                 Hearing cancelled by
Ann. 2008-71, 2008-32 I.R.B. 321                                                                                                2005-29
                                                                 Ann. 2008-96, 2008-43 I.R.B. 1010
                                                                                                                                Superseded by
                                                                 REG-129243-07                                                  Rev. Proc. 2008-49, 2008-34 I.R.B. 423
Corrected by
                                                                 Corrected by
Ann. 2008-78, 2008-34 I.R.B. 453                                                                                                2006-27
                                                                 Ann. 2008-75, 2008-33 I.R.B. 392
                                                                                                                                Modified and superseded by
Notices:                                                         REG-151135-07                                                  Rev. Proc. 2008-50, 2008-35 I.R.B. 464
                                                                 Hearing scheduled by
88-80                                                                                                                           2006-29
                                                                 Ann. 2008-64, 2008-28 I.R.B. 114
Modified by                                                                                                                     Superseded by
Notice 2008-79, 2008-40 I.R.B. 815                               REG-101258-08                                                  Rev. Proc. 2008-34, 2008-27 I.R.B. 13
                                                                 Corrected by
99-48                                                                                                                           2006-34
                                                                 Ann. 2008-73, 2008-33 I.R.B. 391
Superseded by                                                                                                                   Superseded by
Rev. Proc. 2008-40, 2008-29 I.R.B. 151                           REG-102822-08                                                  Rev. Proc. 2008-44, 2008-30 I.R.B. 187
                                                                 Hearing cancelled by
2000-9                                                                                                                          2006-44
                                                                 Ann. 2008-116, 2008-48 I.R.B. 1230
Obsoleted by                                                                                                                    Modified by
Rev. Proc. 2008-41, 2008-29 I.R.B. 155                           REG-103146-08                                                  Ann. 2008-111, 2008-48 I.R.B. 1224
                                                                 Hearing scheduled by
2004-2                                                                                                                          2007-14
                                                                 Ann. 2008-102, 2008-43 I.R.B. 1011
Amplified by                                                                                                                    Superseded by
Notice 2008-59, 2008-29 I.R.B. 123                               REG-115457-08                                                  Rev. Proc. 2008-52, 2008-36 I.R.B. 587
                                                                 Hearing scheduled by
2004-50                                                                                                                         2007-19
                                                                 Ann. 2008-108, 2008-46 I.R.B. 1165
Amplified by                                                                                                                    Superseded by
Notice 2008-59, 2008-29 I.R.B. 123                               Revenue Procedures:                                            Rev. Proc. 2008-39, 2008-29 I.R.B. 143
2005-11                                                                                                                         2007-37
Superseded by                                                                                                                   Updated by
                                                                 Superseded by
T.D. 9425, 2008-45 I.R.B. 1100                                                                                                  Rev. Proc. 2008-62, 2008-42 I.R.B. 935
                                                                 Rev. Proc. 2008-41, 2008-29 I.R.B. 155
2005-91                                                                                                                         2007-42
Obsoleted by                                                                                                                    Superseded by
                                                                 Obsoleted by
T.D. 9422, 2008-42 I.R.B. 898                                                                                                   Rev. Proc. 2008-32, 2008-28 I.R.B. 82
                                                                 Rev. Proc. 2008-37, 2008-29 I.R.B. 137
2006-88                                                                                                                         2007-43
Modified and superseded by                                                                                                      Superseded by
                                                                 Section 6.02(1)(a) modified and amplified by
Notice 2008-60, 2008-30 I.R.B. 178                                                                                              Rev. Proc. 2008-33, 2008-28 I.R.B. 93
                                                                 Rev. Proc. 2008-52, 2008-36 I.R.B. 587
2007-22                                                                                                                         2007-44
Amplified by                                                                                                                    Modified by
                                                                 Superseded by
Notice 2008-59, 2008-29 I.R.B. 123                                                                                              Rev. Proc. 2008-56, 2008-40 I.R.B. 826
                                                                 Rev. Proc. 2008-39, 2008-29 I.R.B. 143
2007-36                                                                                                                         2007-49
Clarified, modified, and amplified by                                                                                           Section 3 modified and superseded by
                                                                 Clarified, modified, amplified, and superseded by
Rev. Proc. 2008-54, 2008-38 I.R.B. 722                                                                                          Rev. Proc. 2008-50, 2008-35 I.R.B. 464
                                                                 Rev. Proc. 2008-52, 2008-36 I.R.B. 587
2007-52                                                          Modified and amplified by                                      2007-50
Updated and amplified by                                         Rev. Proc. 2008-43, 2008-30 I.R.B. 186                         Superseded by
Notice 2008-96, 2008-44 I.R.B. 1077                              2002-28                                                        Rev. Proc. 2008-36, 2008-33 I.R.B. 340
2007-53                                                          Section 7.02(1)(a) modified and amplified by
Updated by                                                       Rev. Proc. 2008-52, 2008-36 I.R.B. 587
Notice 2008-97, 2008-44 I.R.B. 1080

1   A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2008–1 through 2008–26 is in Internal Revenue Bulletin 2008–26, dated June 30, 2008.

December 1, 2008                                                                            iv                                                               2008–48 I.R.B.
Revenue Procedures— Continued:            Revenue Rulings— Continued:
2007-63                                   2006-57
Superseded by                             Modified by
Rev. Proc. 2008-59, 2008-41 I.R.B. 857    Notice 2008-74, 2008-38 I.R.B. 718

2007-66                                   2008-12
Modified and superseded by                Amplified by
Rev. Proc. 2008-54, 2008-38 I.R.B. 722    Rev. Rul. 2008-38, 2008-31 I.R.B. 249
                                          Clarified by
                                          Ann. 2008-65, 2008-31 I.R.B. 279
Modified by
Ann. 2008-63, 2008-28 I.R.B. 114          Treasury Decisions:
Amplified and superseded by
                                          Corrected by
Rev. Proc. 2008-47, 2008-31 I.R.B. 272
                                          Ann. 2008-99, 2008-44 I.R.B. 1089
2008-3                                    9391
Modified and amplified by                 Corrected by
Rev. Proc. 2008-61, 2008-42 I.R.B. 934    Ann. 2008-74, 2008-33 I.R.B. 392
Modified by
                                          Corrected by
Rev. Proc. 2008-67, 2008-48 I.R.B. 1211
                                          Ann. 2008-91, 2008-42 I.R.B. 963
Modified and superseded by
                                          Corrected by
Rev. Proc. 2008-35, 2008-29 I.R.B. 132
                                          Ann. 2008-114, 2008-48 I.R.B. 1226
Modified by
Rev. Proc. 2008-52, 2008-36 I.R.B. 587

Modified by
Ann. 2008-84, 2008-38 I.R.B. 748

Revenue Rulings:

Amplified by
Rev. Rul. 2008-40, 2008-30 I.R.B. 166

Modified by
Rev. Proc. 2008-43, 2008-30 I.R.B. 186

Obsoleted by
T.D. 9414, 2008-35 I.R.B. 454

Modified by
Rev. Proc. 2008-43, 2008-30 I.R.B. 186

Obsoleted by
T.D. 9414, 2008-35 I.R.B. 454

Amplified by
Rev. Proc. 2008-41, 2008-29 I.R.B. 155
Rev. Proc. 2008-42, 2008-29 I.R.B. 160
Superseded in part by
Rev. Proc. 2008-40, 2008-29 I.R.B. 151

Amplified by
Rev. Proc. 2008-38, 2008-29 I.R.B. 139

2008–48 I.R.B.                                                   v                December 1, 2008
December 1, 2008   2008–48 I.R.B.
2008–48 I.R.B.   December 1, 2008
December 1, 2008   2008–48 I.R.B.
                                  INTERNAL REVENUE BULLETIN
   The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue
Bulletin is sold on a yearly subscription basis by the Superintendent of Documents. Current subscribers are notified by the Superin-
tendent of Documents when their subscriptions must be renewed.

                                         CUMULATIVE BULLETINS
   The contents of this weekly Bulletin are consolidated semiannually into a permanent, indexed, Cumulative Bulletin. These are
sold on a single copy basis and are not included as part of the subscription to the Internal Revenue Bulletin. Subscribers to the weekly
Bulletin are notified when copies of the Cumulative Bulletin are available. Certain issues of Cumulative Bulletins are out of print
and are not available. Persons desiring available Cumulative Bulletins, which are listed on the reverse, may purchase them from the
Superintendent of Documents.

   You may view the Internal Revenue Bulletin on the Internet at Under information for: select Businesses. Under
related topics, select More Topics. Then select Internal Revenue Bulletins.

   Internal Revenue Bulletins are available annually as part of Publication 1796 (Tax Products CD-ROM). The CD-ROM can be
purchased from National Technical Information Service (NTIS) on the Internet at (discount for online orders)
or by calling 1-877-233-6767. The first release is available in mid-December and the final release is available in late January.

                                                 HOW TO ORDER
   Check the publications and/or subscription(s) desired on the reverse, complete the order blank, enclose the proper remittance,
detach entire page, and mail to the Superintendent of Documents, P.O. Box 371954, Pittsburgh PA, 15250–7954. Please allow two to
six weeks, plus mailing time, for delivery.

                       REVENUE BULLETIN
  If you have comments concerning the format or production of the Internal Revenue Bulletin or suggestions for improving it,
we would be pleased to hear from you. You can e-mail us your suggestions or comments through the IRS Internet Home Page
( or write to the IRS Bulletin Unit, SE:W:CAR:MP:T:T:SP, Washington, DC 20224

   Internal Revenue Service
   Washington, DC 20224
   Official Business
   Penalty for Private Use, $300

To top