Internal Revenue Bulletin 2012-49 (PDF rendition): IRS Notices

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing. Whole bulletin rendition: numbered items are identified below; other legal material and publisher context remain included. This is not a new standalone advance release.

Bulletin No. 201
2-49
December 3, 2012
HIGHLIGHTS
OF THIS ISSUE
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
Rev. Rul. 2012–31, page 636.
Federal rates; adjusted federal rates; adjusted federal
long-termrateandthelong-termexemptrate.For pur-
poses of sections 382, 642, 1274, 1288, and other sections
of the Code, tables set forth the rates for December 2012.
Rev. Proc. 2012–44, page 645.
Insurance companies; loss reserves; discounting unpaid
losses.The loss payment patterns and discount factors are
set forth for the 2012 accident year. These factors will be used
for computing discounted unpaid losses under section 846 of
the Code.
Rev. Proc. 2012–45, page 656.
Insurance companies; discounting estimated salvage re-
coverable.The salvage discount factors are set forth for the
2012 accident year. These factors will be used for computing
discounted estimated salvage recoverable under section 832
of the Code.
EMPLOYEE PLANS
Notice 2012–66, page 639.
Weighted average interest rate update; corporate bond
indices; 30-year Treasury securities; segment rates.
This notice contains updates for the corporate bond weighted
average interest rate for plan years beginning in November
2012; the 24-month average segment rates; the funding tran-
sitional segment rates applicable for November 2012; and the
minimum present value transitional rates for October 2012.
The rates in this notice reflect certain changes implemented
by the Moving Ahead for Progress in the 21st Century Act,
Public Law 112–141 (MAP–21).
Announcement 2012–44, page 663.
This announcement provides relief under section 401 of the
Code to taxpayers who have been adversely affected by Hur-
ricane Sandy and have retirement assets in qualified employer
plans they would like to use to alleviate hardships caused by
Hurricane Sandy. In addition, this announcement provides re-
lief from certain verification procedures that may be required
under retirement plans with respect to loans and hardship dis-
tributions. The relief provided under this announcement is in
addition to the relief already provided by the Service pursuant
to News Release IR-2012–83 under section 7508A of the Code
for victims of Hurricane Sandy.
ADMINISTRATIVE
Rev. Proc. 2012–43, page 643.
This procedure informs the taxpayer how to request the Service
to reduce the amount of a frivolous tax submission penalty
assessed under section 6702(a) or (b) of the Code and the
criteria that the Service will apply in determining whether a
reduction would promote compliance with and administration
of Federal tax laws.
Announcements of Disbarments and Suspensions begin on page 664.
Finding Lists begin on page ii.

The IRS Mission
Provide Americ
a’s taxpayers top-quality service by helping
them understa
nd and meet their tax responsibilities and en-
force the law wi
th integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly and may be obtained from the
Superintendent of Documents on a subscription basis. Bulletin
contents are compiled semiannually into Cumulative Bulletins,
which are sold on a single-copy basis.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application of
the tax laws, including all rulings that supersede, revoke, mod-
ify, or amend any of those previously published in the Bulletin.
All published rulings apply retroactively unless otherwise indi-
cated. Procedures relating solely to matters of internal man-
agement are not published; however, statements of internal
practices and procedures that affect the rights and duties of
taxpayers are published.
Revenue rulings represent the conclusions of the Service on the
application of the law to the pivotal facts stated in the revenue
ruling. In those based on positions taken in rulings to taxpayers
or technical advice to Service field offices, identifying details
and information of a confidential nature are deleted to prevent
unwarranted invasions of privacy and to comply with statutory
requirements.
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
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—19
86 Code.
This part i
ncludes rulings and decisions based on provisions of
the Intern
al Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B, Leg-
islation and Related Committee Reports.
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
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Secre-
tary (Enforcement).
Part IV
.—Items of General Interest.
This par
t includes notices of proposed rulemakings, disbar-
ment an
d suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The c
ontents 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.
December 3, 20122012–49 I.R.B.

Part I. Rulings
and Decisions Under the Internal Revenue Code
of 1986
Section 42.—L
ow-Income
Housing Credi
t
The adjusted a
pplicable federal short-term, mid-
term, and long
-term rates are set forth for the month
of December 20
12. See Rev. Rul. 2012-31, page
636.
Section 280G.—Golden
Parachute Payments
Federal short-term, mid-term, and long-term rates
are set forth for the month of December 2012. See
Rev. Rul. 2012-31, page 636.
Section 382.—Limitation
on Net Operating Loss
Carryforwa
rds and Certain
Build-in Losses Following
Ownership Change
The adjusted applicable federal long-term rates is
set forth for the month of December 2012. See Rev.
Rul. 2012-31, page 636.
Section 412.—Minimum
Funding Standards
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of December 2012. See Rev. Rul. 2012-31, page
636.
Section 467.—Certain
Payments for the Use of
Property or Services
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of December 2012. See Rev. Rul. 2012-31, page
636.
Section 468.—Special
Rules for Mining and Solid
Waste
Reclamation and
Closi
ng Costs
The ad
justed applicable federal short-term, mid-
term,
and long-term rates are set forth for the month
of De
cember 2012. See Rev. Rul. 2012-31, page
636.
Section 482.—
Allocation
of Income and D
eductions
Among Taxpaye
rs
Federal short
-term, mid-term, and long-term rates
are set forth f
or the month of December 2012. See
Rev. Rul. 201
2-31, page 636.
Section 483.—Interest on
Certain Defered Payments
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of December 2012. See Rev. Rul. 2012-31, page
636.
Section 642.—Special
Rules for Cr
edits and
Deductions
Federal sho
rt-term, mid-term, and long-term rates
are set fort
h for the month of December 2012. See
Rev. Rul. 2
012-31, page 636.
Section 807.—Rules for
Certain Reserves
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of December 2012. See Rev. Rul. 2012-31, page
636.
Section 832.—Insurance
Company Taxable Income
26 CFR 1.832–4: Gross income.
The salvage discount factors and payment patterns
are set forth for 2012. These factors must be used
to compute discounted estimated salvage recoverable
for purposes of section 832 of the Code. See Rev.
Proc. 2012-45, page 656.
Section 8
46.—Discounted
Unpaid Lo
sses Defined
The adjus
ted applicable federal short-term, mid-
term, and
long-term rates are set forth for the month
of Decemb
er 2012. See Rev. Rul. 2012-31, page
636.
26 CFR 1.846–1: Application of discount factors.
The composite loss discount factors for Reinsur-
ance (Nonproportional Assumed Property) published
in See Rev. Proc. 2012-44, page 645.
26 CFR 1.846–1
: Application of discounted factors.
The salvage di
scount factors and payment patterns
are set forth f
or 2012. These factors must be used
to compute dis
counted estimated salvage recoverable
for purposes o
f section 832 of the Code. See Rev.
Proc. 2012-4
5, page 656.
26 CFR 1.846–1: Application of discounted factors.
The savage discounted factors are set forth for the
1998 accident year. These factors will be used for
computing estimated salvage recoverable for purpose
of section 832. See Rev. Proc. 2012-45, page 656.
Section 1274.—Determi-
nation of Issue Price in the
Case of Certain Debt Instru-
ments Issued for Property
(Also Sections 42, 280G, 382, 412, 467, 468, 482,
483, 642, 807, 846, 1288, 7520, 7872.)
Federal rates; adjusted federal rates;
adjusted federal long-term rate and the
long-term exempt rate.For purposes of
sections 382, 642, 1274, 1288, and other
sections of the Code, tables set forth the
rates for December 2012.
Rev. Rul. 2012–31
This revenue ruling provides various
prescribed rates for federal income tax
purposes for December 2012 (the current
month). Table 1 contains the short-term,
mid-term, and long-term applicable fed-
eral rates (AFR) for the current month
for purposes of section 1274(d) of the
Internal Revenue Code. Table 2 contains
the short-term, mid-term, and long-term
adjusted applicable federal rates (ad-
justed AFR) for the current month for
purposes of section 1288(b). Table 3 sets
forth the adjusted federal long-term rate
and the long-term tax-exempt rate de-
scribed in section 382(f). Table 4 contains
the appropriate percentages for deter-
mining the low-income housing credit
described in section 42(b)(1) for build-
ings placed in service during the current
month. However, under section 42(b)(2),
the applicable percentage for non-feder-
ally subsidized new buildings placed in
service after July 30, 2008, and before
December 31, 2013, shall not be less than
2012–49 I.R.B.636December 3, 2012

9%. Table 5 contains the federal rate
for determining the present value of an
annuity, an interest for life or for a term
of years, or a remainder or a reversionary
interest for purposes of section 7520.
Finally, Table 6 contains contains the 2013
interest rate for sections 846 and 807.
REV. RUL. 2012–31 TABLE 1
Applicable Federal Rates (AFR) for December 2012
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term
AFR.24%.24%.24%.24%
110% AFR.26%.26%.26%.26%
120% AFR.29%.29%.29%.29%
130% AFR.31%.31%.31%.31%
Mid-term
AFR
.95%.95%.95%.95%
110% AFR
1.05%1.05%1.05%1.05%
120% AFR1.14%1.14%1.14%1.14%
130% AFR1.24%1.24%1.24%1.24%
150% AFR
1.44%1.43%1.43%1.43%
175% AFR
1.67%1.66%1.66%
1.65%
Long-term
AFR2.40%2.39%2.38%2.38%
110% AFR
2.65%
2.63%2.62%2.62%
120% AFR2.89%2.87%2.86%
2.85%
130% AFR3.13%3.11%3.10%3.09%
REV. RUL. 2
012–31 TABLE 2
Adjusted AFR for December 2012
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term
adjusted AFR
.27%.27%27%.27%
Mid-term adjusted AFR
.95%.95%.95%.95%
Long-te
rm
adjuste
dAFR
2.83%2.81%2.80%2.79%
REV. RUL. 2012–31 TABLE 3
Rates Under Section 382 for December 2012
Adjuste
d federal long-term rate for the current month
2.83%
Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted
federal long-term rates for the current month and the prior two months.)2.87%
December 3, 20126372012–49 I.R.B.

REV. RUL. 2012–31 TABLE 4
Appropriate Percentages Under Section 42(b)(2) for December 2012
Note: Under Section 42(b)(2), the applicable percentagefor non-federally subsidized new buildings placed in
service after July 30, 2008, and before December 31, 2013, shall not be less than 9%.
Appropriate percentage for the 70% present value low-income housing credit7.38%
Appropriate percentage for the 30% present value low-income housing credit3.16%
REV. RUL. 2012–31 TABLE 5
Rate Under Section 7520 for December 2012
Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years,
or a remainder or reversionary interest1.2%
REV. RUL. 2012–31 TABLE 6
Rates Under Sections 846 and 807
Applicable rate of interest for 2013 for purposes of sections 846 and 8072.16%
Section 1288.—Treatment
of Original Issue Discount
on Tax-Exempt Obligations
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of December 2012. See Rev. Rul. 2012-31, page
636.
Section 7520.—Valuation
Tables
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of December 2012. See Rev. Rul. 2012-31, page
636.
Section 7872.—Treatment
of Loans With Below-Market
Interest Rates
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of December 2012. See Rev. Rul. 2012-31, page
636.
2012–49 I.R.B.638December 3, 2012

Part III. Administrative, Procedural, and Miscellaneous
Update for Weighted Average
Interest Rates, Yield Curves,
and Segment Rates
Notice 2012–66
This notice provides guidance as to the
corporate bond weighted average interest
rate and the permissible range of interest
rates specified under § 412(b)(5)(B)(ii)(II)
of the Internal Revenue Code as in ef-
fect for plan years beginning before 2008.
It also provides guidance on the cor-
porate bond monthly yield curve (and
the corresponding spot segment rates),
and the 24-month average segment rates
under § 430(h)(2). In addition, this no-
tice provides guidance as to the interest
rate on 30-year Treasury securities un-
der § 417(e)(3)(A)(ii)(II) as in effect for
plan years beginning before 2008, the
30-year Treasury weighted average rate
under § 431(c)(6)(E)(ii)(I), and the min-
imum present value segment rates under
§ 417(e)(3)(D) as in effect for plan years
beginning after 2007. These rates reflect
certain changes implemented by the Mov-
ing Ahead for Progress in the 21st Century
Act, Public Law 112–141 (MAP–21).
MAP–21 provides that for purposes of
§ 430(h)(2), the segment rates are limited
by the applicable maximum percentage or
the applicable minimum percentage based
on the average of segment rates over a 25
year period.
CORPORATE BOND WEIGHTED
AVERAGE INTEREST RATE
Sections412(b)(5)(B)(ii)and
412(l)(7)(C)(i) provide that the interest
rates used to calculate current liability
and to determine the required contribution
under § 412(l) for plan years beginning
in 2004 through 2007 must be within a
permissible range based on the weighted
average of the rates of interest on amounts
invested conservatively in long term in-
vestment grade corporate bonds during the
4-year period ending on the last day before
the beginning of the plan year.
Notice 2004–34, 2004–1 C.B. 848, pro-
vides guidelines for determining the cor-
porate bond weighted average interest rate
and the resulting permissible range of in-
terest rates used to calculate current liabil-
ity. That notice establishes that the corpo-
rate bond weighted average is based on the
monthly composite corporate bond rate de-
rived from designated corporate bond in-
dices. The methodology for determining
the monthly composite corporate bond rate
as set forth in Notice 2004–34 continues to
apply in determining that rate. See Notice
2006–75, 2006–2 C.B. 366.
The composite corporate bond rate for
October 2012 is 3.93 percent. Pursuant
to Notice 2004–34, the Service has de-
termined this rate as the average of the
monthly yields for the included corporate
bond indices for that month.
The following corporate bond weighted
average interest rate was determined for
plan years beginning in the month shown
below.
For Plan Years
Beginning inPermissible Range
MonthYear
Corporate
Bond Weighted
Average90%to100%
November2012
5.13
4.62
5.13
YIELD CURVE AND SEGMENT
RATES
Generally, except for certain plans
under sections 104 and 105 of the Pen-
sion Protection Act of 2006, § 430 of
the Code specifies the minimum funding
requirements that apply to single em-
ployer plans pursuant to § 412. Section
430(h)(2) specifies the interest rates that
must be used to determine a plan’s target
normal cost and funding target. Under
this provision, present value is generally
determined using three 24-month average
interest rates (“segment rates”), each of
which applies to cash flows during speci-
fied periods. To the extent provided under
§ 430(h)(2)(C)(iv), these segment rates are
adjusted by the applicable percentage of
the 25-year average segment rates for the
period ending September 30 of the year
preceding the calendar year in which the
plan year begins. However, an election
may be made under § 430(h)(2)(D)(ii) to
use the monthly yield curve in place of the
segment rates.
Notice 2007–81, 2007–44 I.R.B. 899,
provides guidelines for determining the
monthly corporate bond yield curve, and
the 24-month average corporate bond
segment rates used to compute the tar-
get normal cost and the funding target.
Pursuant to Notice 2007–81, the monthly
corporate bond yield curve derived from
October 2012 data is in Table I at the end
of this notice. The spot first, second, and
third segment rates for the month of Octo-
ber 2012 are, respectively, 0.96, 3.57, and
4.58. The three 24-month average cor-
porate bond segment rates applicable for
November 2012, without adjustment by
the applicable percentage of the 25-year
average segment rates, are as follows:
2
4-MonthSegmentRatesWithoutAdjustmentby25-YearAverageSegmentRates
First
Segment
Second
Segment
Third
Segment
1.69
4.535.60
December 3, 20126392012–49 I.R.B.

For plan years beginning in 2012, the
24-month average segment rates deter-
mined under § 430(h)(2)(C)(iv) must be
not less than 90% nor greater than 110%
of the 25-year average segment rates. Pur-
suant to Notice 2012–55, 2012–36 I.R.B.
332, the first, second, and third 25-year
segment rates applicable for plan years
beginning in 2012 are 6.15, 7.61, and
8.35, respectively. Therefore, for plan
years beginning in 2012, the three adjusted
24-month average corporate bond segment
rates applicable for November 2012, tak-
ing into account the applicable percentage
of the 25-year average segment rates, are
as follows:
Adjusted 24-Month Average Segment Rates,
U
singApplicablePercentageof25-YearAverageSegmentRates
Applicable
Month
For Plan
Years
Beginning
in
First
Segment
Second
Segment
Third
Segment
November 20122012
5.546.857.52
The 25-year average segment rates for
the period ending September 30, 2012
have not been determined yet. The Ser-
vice will issue additional guidance on the
November 2012 adjusted 24-month aver-
age segment rates applicable for plan years
beginning in 2013 when those 25-year
average segment rates are determined.
30-YEAR TREASURY SECURITIES
INTEREST RATES
Section 417(e)(3)(A)(ii)(II) (prior to
amendment by PPA) defines the appli-
cable interest rate, which must be used
for purposes of determining the minimum
present value of a participant’s benefit
under § 417(e)(1) and (2), as the annual
rate of interest on 30-year Treasury se-
curities for the month before the date
of distribution or such other time as the
Secretary may by regulations prescribe.
Section 1.417(e)–1(d)(3) of the Income
Tax Regulations provides that the applica-
bleinterestrateforamonthistheannual
rate of interest on 30-year Treasury secu-
rities as specified by the Commissioner
for that month in revenue rulings, notices
or other guidance published in the Internal
Revenue Bulletin.
The rate of interest on 30-year Treasury
securities for October 2012 is 2.90 per-
cent. The Service has determined this rate
as the average of the daily determinations
of yield on the 30-year Treasury bond ma-
turing in August 2042.
Generally for plan years beginning
after 2007, § 431 specifies the mini-
mum funding requirements that apply to
multiemployer plans pursuant to § 412.
Section 431(c)(6)(B) specifies a minimum
amount for the full-funding limitation
described in section 431(c)(6)(A), based
on the plan’s current liability. Section
431(c)(6)(E)(ii)(I) provides that the inter-
est rate used to calculate current liability
for this purpose must be no more than 5
percent above and no more than 10 percent
below the weighted average of the rates of
interest on 30-year Treasury securities dur-
ing the four-year period ending on the last
day before the beginning of the plan year.
Notice 88–73, 1988–2 C.B. 383, provides
guidelines for determining the weighted
average interest rate. The following rates
were determined for plan years beginning
in the month shown below.
For Plan Years
Beginning inPermissible Range
MonthYear
30-Year
Treasury
Weighted
Average90%to105%
November20123.663.303.84
MINIMUM PRESENT VALUE
SEGMENT RATES
In general, the applicable interest rates
under § 417(e)(3)(D) are segment rates
computed without regard to a 24-month
average. For plan years beginning in
2008 through 2011, the applicable inter-
est rates are the monthly spot segment
rates blended with the applicable rate un-
der § 417(e)(3)(A)(ii)(II) as in effect for
plan years beginning in 2007. Notice
2007–81 provides guidelines for determin-
ing the minimum present value segment
rates. Pursuant to that notice, the mini-
mum present value transitional segment
rates determined for October 2012, taking
into account the October 2012 30-year
Treasury rate of 2.90 stated above, are as
follows:
2012–49 I.R.B.640December 3, 2012

For Plan
Years
Beginning in
First
Segment
Second
Segment
Third
Segment
2011
1.35
3.444.24
20120.96
3.574.58
20130.96
3.574.58
DRAFTING INFORMATION
The principal author of this notice is
Tony Montanaro of the Employee Plans,
Tax Exempt and Government Entities Di-
vision. Mr. Montanaro may be e-mailed at
RetirementPlanQuestions@irs.gov.
December 3, 20126412012–49 I.R.B.

Table I
Monthly Yield Curve for October 2012
Derived from October 2012 Data
Maturity YieldMaturity YieldMaturity YieldMaturity YieldMaturity Yield
0.5
0.32
20.5
4.39
40.5
4.60
60.5
4.69
80.5
4.73
1.0
0.51
21.04.4041.04.6161.04.6981.04.73
1.5
0.68
21.5
4.41
41.5
4.61
61.5
4.69
81.5
4.73
2.00.8222.04.4142.04.6162.04.6982.04.73
2.5
0.94
22.5
4.42
42.5
4.62
62.5
4.69
82.5
4.73
3.01.0423.04.4343.04.6263.04.7083.04.74
3.5
1.14
23.5
4.43
43.5
4.62
63.5
4.70
83.5
4.74
4.0
1.25
24.04.4444.04.6264.04.7084.04.74
4.5
1.38
24.54.4544.5
4.63
64.5
4.70
84.5
4.74
5.01.5425.04.4545.0
4.63
65.0
4.70
85.0
4.74
5.5
1.70
25.5
4.46
45.5
4.63
65.5
4.70
85.5
4.74
6.01.8826.04.4646.04.6366.04.7086.04.74
6.5
2.07
26.5
4.47
46.5
4.64
66.5
4.70
86.5
4.74
7.02.2627.04.4847.04.6467.04.7187.04.74
7.52.4527.5
4.48
47.5
4.64
67.5
4.71
87.5
4.74
8.02.6428.04.4948.04.6468.04.7188.04.74
8.5
2.82
28.54.5048.54.6568.5
4.71
88.5
4.74
9.02.9929.04.5049.04.6569.04.7189.04.74
9.53.1529.54.5149.54.6569.5
4.71
89.5
4.74
10.03.3030.0
4.5150.04.65
70.04.7190.0
4.75
10.5
3.44
30.54.5250.54.6570.5
4.71
90.54.75
11.0
3.56
31.0
4.5351.0
4.6671.04.7191.0
4.75
11.5
3.67
31.54.5351.5
4.66
71.5
4.72
91.54.75
12.03.7732.04.5452.04.6672.04.7292.04.75
12.5
3.86
32.54.5452.5
4.66
72.5
4.72
92.54.75
13.03.9433.0
4.5553.0
4.6673.04.7293.0
4.75
13.5
4.01
33.54.5553.5
4.67
73.5
4.72
93.54.75
14.04.0734.0
4.5554.0
4.6774.04.7294.0
4.75
14.5
4.12
34.54.5654.5
4.67
74.5
4.72
94.54.75
15.04.1735.04.5655.04.6775.04.7295.04.75
15.5
4.21
35.54.5755.5
4.67
75.5
4.72
95.54.75
16.04.2436.0
4.5756.0
4.6876.04.7296.0
4.75
16.5
4.27
36.54.5856.5
4.68
76.5
4.72
96.54.75
17.04.2937.0
4.5857.0
4.6877.04.7397.0
4.75
17.5
4.31
37.54.5857.5
4.68
77.5
4.73
97.54.75
18.04.3338.04.5958.04.6878.04.7398.04.75
18.5
4.34
38.54.5958.5
4.68
78.5
4.73
98.5
4.76
19.04.3639.0
4.5959.0
4.6879.04.7399.04.76
19.5
4.37
39.5
4.60
59.5
4.69
79.5
4.73
99.5
4.76
20.04.3840.04.6060.04.6980.04.73100.04.76
2012–49 I.R.B.642December 3, 2012

26 C.F.R. 601.105: Examination of returns and
claims for refund, credit or abatement; determination
of correct tax liability.
Rev. Proc. 2012–43
SECTION 1. PURPOSE
Section 6702(d) of the Internal Revenue
Code authorizes the Internal Revenue Ser-
vice (IRS) to reduce the amount of the
frivolous tax submission penalty assessed
under section 6702(a) or (b) if the IRS de-
termines that a reduction would promote
compliance with and administration of the
Federal tax laws. This revenue proce-
dure describes the limited circumstances
in which a person may be eligible for a
one-time reduction of any unpaid section
6702 penalty liabilities. This revenue pro-
cedure also prescribes how a person may
request a reduction and the eligibility re-
quirements for reduction. Generally, if
a person satisfies all eligibility criteria of
section 4 of this revenue procedure, includ-
ing filing all tax returns and paying all out-
standing taxes, penalties (other than un-
der section 6702) and related interest, the
IRS will reduce all unpaid section 6702
penalties assessed against that person to
$500. After experience with the applica-
tion of this revenue procedure, the IRS
and the Treasury Department plan to as-
sess whether the revenue procedure is suc-
cessfully promoting compliance with and
administration of the Federal tax laws and
may revise this revenue procedure as nec-
essary to further those goals.
SECTION 2. BACKGROUND
.01 Section 326(a) of the Tax Equity
and Fiscal Responsibility Act of 1982,
Pub. L. No. 97–248 (96 Stat. 324, 617),
added section 6702 to the Code to provide
for a civil penalty for frivolous income
tax returns. Specifically, section 6702(a)
imposed a penalty in the amount of $500
against any individual who files what
purports to be a return of income tax if
(1) the purported return does not contain
information on which the substantial cor-
rectness of the self-assessment may be
judged or contains information that on its
face indicates that the self-assessment is
substantially incorrect, and (2) the filing
of the purported return is due to either a
position that is frivolous or a desire (which
appears on the purported return) to delay
or impede the administration of Federal
income tax laws. Section 6702(b) pro-
vided that the penalty was in addition to
anyotherpenaltyprovidedbylaw.
.02 Section 407(a) of Division A of
the Tax Relief and Health Care Act of
2006, Pub. L. No. 109–432 (120 Stat.
2922, 2960), amended section 6702(a) by
increasing the amount of the penalty from
$500 to $5,000, changing its application
from “individual[s]”to “person[s],” ex-
panding its scope from “purported income
tax returns” to “purported returns of tax,”
and substituting the term “a position which
the Secretary has identified as frivolous”
for “a position which is frivolous” as one
of the bases for conduct subject to the
penalty.
.03 The 2006 amendments also added
the following provisions to section 6702:
(1) Revised section 6702(b) imposes a
$5,000 penalty on any person who submits
a “specified frivolous submission.” (The
prior version of 6702(b) was re-designated
as section 6702(e).) A “specified frivolous
submission” is defined as a “specified sub-
mission” that is based on a position that the
IRS has identified as frivolous or that re-
flects a desire to delay or impede the ad-
ministration of the Federal tax laws. A
“specified submission” means a request
for a collection due process hearing un-
dersection6320or6330oranapplication
for an installment agreement under section
6159, an offer-in-compromise under sec-
tion 7122, or a taxpayer assistance order
under section 7811.
(2) New section 6702(c) requires the
IRS to prescribe and periodically revise a
list of positions that the IRS has identified
as frivolous for purposes of the penalty
under section 6702(a) or (b).
(3) New section 6702(d) provides dis-
cretionary authority to the IRS to reduce
the amount of a penalty imposed under
section 6702(a) or (b) if the IRS deter-
mines a reduction would promote compli-
ance with and administration of the Fed-
eral tax laws. As authorized by Congress,
this revenue procedure describes the lim-
ited circumstances in which a person may
be eligible for a one-time reduction of any
unpaid section 6702 penalty liabilities. To
be eligible for the one-time penalty reduc-
tion, a person must abandon any frivolous
positions regarding the Federal tax laws
and must meet the specific eligibility re-
quirements detailed in section 4 of this
revenue procedure, which include filing
all tax returns and paying all outstanding
taxes, penalties (other than those under
section 6702) and related interest. Consis-
tent with section 6702(d) and the IRS’ pub-
lished policy statement on penalties (Pol-
icy Statement 20–1),these requirements
will promote voluntary compliance with
and administration of the Federal tax laws.
.04 The 2006 amendments apply to
submissions made and issues raised after
March 16, 2007, the date the IRS issued
Notice 2007–30, 2007–1 C.B. 883, pre-
scribing a list of frivolous positions under
section 6702(c). The IRS subsequently
revised the list in Notice 2008–14, 2008–1
C.B. 310, effective January 15, 2008, and
Notice 2010–33, 2010–17 I.R.B. 609, ef-
fective April 8, 2010. The IRS may make
additional updates to the list in the future.
SECTION 3. SCOPE
This revenue procedure applies to any
person who has not fully paid a $5,000
penalty assessed by the IRS under section
6702 and who seeks a reduction of that
penalty pursuant to section 6702(d). This
revenue procedure does not apply to per-
sons who seek to challenge the merits of
a section 6702 penalty assessment. Other
procedures may be available to challenge
the merits, such as paying the penalty and
filing a refund claim or raising the issue in
a Collection Due Process hearing.
SECTION 4. ELIGIBILITY
.01 A request for reduction must com-
ply with the requirements of this section.
A person whose request does not comply
with these requirements will not be eligible
for a reduction of a section 6702 penalty.
(1)Form of request.Apersonmust
make a written request for reduction on
IRS Form 14402, “IRC 6702(d) Frivolous
Tax Submissions Penalty Reduction,” (or
successor form) or as prescribed by the
Form’s instructions. The person must also
sign the form or written statement under
penalties of perjury, and file it with the IRS
in accordance with instructions to the form
or other guidance. A person may file a
single Form 14402 or written statement to
December 3, 20126432012–49 I.R.B.

request reduction of more than one section
6702 penalty.
(2)Partial payment.TheIRSwillre-
duce an eligible person’s total outstanding
section 6702 liabilities to $500, regardless
of the number of section 6702 penalties as-
sessed. A person must pay this $500 bal-
ance in one of two ways:
(a)Payment submitted with request for
reduction. Except as provided in section
4.01(2)(b), a person must submit a pay-
ment of at least $250 with the request for
reduction even if that person has, prior to
filing a request for reduction, paid either
voluntarily or by an overpayment offset,
a portion of the section 6702 penalty lia-
bilities that are the subject of the request.
This payment will be applied to the per-
son’s assessed section 6702 penalty lia-
bilities without regard to whether the IRS
grants the reduction request. A person who
chooses to pay $250 or more but less than
$500 and who is granted the penalty re-
duction will remain liable for the remain-
ing balance of the reduced penalties (i.e.,
the difference between the amount of the
payment and $500) until the balance is sat-
isfied, but this remaining liability will not
preclude the requested reduction of the as-
sessed and unpaid section 6702 penalties.
If the person pays $250 or more but less
than $500, interest will continue to accrue
on the remaining balance of the reduced
penalties from the date the IRS assessed
the earliest unpaid section 6702 penalty
falling under these procedures. The person
granted the penalty reduction must pay the
remaining balance of the reduced penalties
(plus interest); if the person granted the
penalty reduction fails to pay the remain-
ing balance, the IRS may use any available
remedy to collect the balance (plus inter-
est). If a person chooses to submit the full
$500 with the request for reduction and the
IRS grants the request, any interest that has
accrued on the outstanding section 6702 li-
abilities will be abated.
(b)Installment agreement.Ifaper-
son has entered into and is in compliance
with an approved fullpayment installment
agreement with the IRS under section 6159
for all assessed Federal tax liabilities not
fully paid and for which the period for col-
lection under section 6502 remains open,
then the person may pay the reduced sec-
tion 6702 penalty of $500 as part of the in-
stallment agreement. If, at the time the IRS
receives a request for reduction, the per-
son has already paid more than $500 to-
wards the section 6702 penalty under the
installment agreement,that person will not
be required to pay any additional amount
towards the section 6702 penalty in or-
der to become eligible. If the person pays
the $500 penalty as part of an installment
agreement, any interest that has accrued on
the outstanding section 6702 liabilities will
be abated.
.02Time limits. A person must file a
request for a reduction before the United
States files suit against the person either
for collection of the penalty or to reduce
any assessment of the penalty to judgment.
The IRS will deny any request for re-
duction of a section 6702 penalty that does
not meet these time limits. If a request
seeks reduction of multiple penalties but
the request falls within the time limits with
respect to only some of the penalties, the
IRS will treat the request as timely only
for those penalties. Any person who has
voluntarily paid a portion of any section
6702 penalty liabilities will be eligible for
reduction of the remaining amount of those
liabilities. Similarly, any person who has
had an overpayment offset against any sec-
tion 6702 penalty liabilities will be eligible
for a reduction of the remaining amount of
those liabilities, if any.
.03Full compliance with all Federal tax
filing and payment requirements.
(1)In general. Prior to requesting a re-
duction, a person must have filed all tax re-
turns due and paid (or arranged to pay, as
described in paragraph (3) of this subsec-
tion) all taxes due, other than the section
6702 penalty or penalties for which reduc-
tion is requested. Unless these filing and
payment requirements have been met, re-
duction of a section 6702 penalty would
not promote compliance with and admin-
istration of the Federal tax laws and the re-
quest for reduction will be denied.
(2)Filing compliance.Apersonre-
questing reduction must file with the IRS
valid tax returns required to be filed under
the Code for any type of tax and for all tax-
able periods for six years before the date of
the request. This requirement means a per-
son must file all individual returns and all
returns for any entity in which the person
has a controlling interest. This includes,
for example, any returns of a partnership
or limited liability company for which the
person is a general partner or managing
member, any returns of a subchapter C or
subchapter S corporation in which the per-
son holds a greater than 50 percent inter-
est, and any returns of a trust for which
the person serves as trustee. A document
other than a return that permits assessment
of Federal income tax will not satisfy the
requirements of this section.
(3)Payment compliance. A person re-
questing reduction must either:
(a) have fully paid all assessed tax lia-
bilities, including interest, penalties (other
than the section 6702 penalty or penalties
that are the subject of the request), and ad-
ditions to tax for all types of tax and for
all taxable periods for which the period
for collection under section 6502 remains
open (for purposes of this subsection, the
granting of relief under the provisions of
section 6015 or section 66(c) will be con-
sidered payment of an assessed tax liability
to the extent of the granted relief); or
(b) have entered into and be in com-
pliance with an approved full payment in-
stallment agreement with the IRS under
section 6159 for all assessed Federal tax li-
abilities not fully paid and for which the
period for collection under section 6502
remains open.
.04Deposit requirements. If the person
requesting reduction is an employer, that
person must, at the time of filing the re-
quest, have made all required deposits of
Federal employment taxes under subtitle C
of the Code for the current quarter and the
prior two quarters.
.05Disqualifying events.
(1)Prior reduction. Any person who
previously received a reduction of a sec-
tion 6702 penalty is ineligible for another
reduction of a section 6702 penalty.
(2)Offer-in-compromise. Any person
who has submitted an offer-in-compro-
mise to the IRS under section 7122 that
includes any section 6702 penalty is ineli-
gible for a reduction of the penalty unless
the person has withdrawn the offer in writ-
ing, the IRS has returned the offer to the
taxpayer without accepting it, or the offer
was rejected by the IRS and the taxpayer
is not pursuing an administrative appeal of
the rejection. All of a person’s outstand-
ing Federal tax liabilities, including any
outstanding section 6702 penalties, will be
considered as part of the offer-in-compro-
mise determination.
(3)Partial payment installment agree-
ments. Any person who has entered into
a partial payment installment agreement
2012–49 I.R.B.644December 3, 2012

with the IRS under section 6159 is ineli-
gible for a reduction of any section 6702
penalty included in the partial payment
installment agreement because the person
will be paying less than the full amount of
Federal tax liabilities.
(4)Closing agreement. Any person
who has entered into a closing agreement
with the IRS under section 7121 is ineli-
gible for a reduction of any section 6702
penalty included in the closing agreement.
(5)New frivolous filing. Any person
who files a frivolous return or makes a
frivolous submission after filing a request
for reduction but before the IRS grants the
reduction is ineligible for reduction of a
section 6702 penalty whether or not the
person withdraws the frivolous return or
submission.
(6)Bankruptcy. A person is ineligible
for a reduction of any section 6702 penalty
under this revenue procedure if the penalty
is dischargeable under an open bankruptcy
case. Furthermore, a person is ineligible
to apply for any penalty reduction while
a bankruptcy case is open, regardless of
whether the person is seeking discharge of
the penalty for which reduction is sought.
SECTION 5. CONSIDERATION OF
REDUCTION REQUEST
.01 Generally, if a person satisfies all el-
igibility criteria of section 4 of this revenue
procedure, the IRS will reduce all section
6702 penalties assessed against that per-
son to $500. If the person submitted $500
with the request for reduction, the IRS
will abate any remaining unpaid amount of
those penalty liabilities, including interest.
If the person has submitted at least $250,
but less than $500, with the request for
reduction, the IRS will apply the amount
submitted against thesection 6702 penalty
or penalties that the person seeks to re-
duce and will abate all but the difference
between the payment submitted and $500
(i.e., the remaining unpaid amount of those
penalty liabilities). If the person granted
the reduction fails to pay the remaining
balance of the $500 reduced penalty (plus
interest as described above), the IRS may
use any available remedy to collect the bal-
ance. The IRS will not refund any por-
tion of the section 6702 penalty or penal-
ties paid prior to the date the IRS received
the request for reduction. In the case of
a person who has entered into a full pay-
ment installment agreement, the section
6702 penalty or penalties will be reduced
only upon completionof all payments re-
quired to satisfy all outstanding tax liabil-
ities other than the section 6702 penalties
that are the subject of the request for reduc-
tion. If the person defaults on the install-
ment agreement, the section 6702 penalty
or penalties will not be reduced.
.02 If a person fails to satisfy any of
the eligibility criteria of section 4 of this
revenue procedure, the IRS will deny the
request for reduction. The IRS will ap-
ply any payment received with the request
for reduction against unpaid section 6702
penalties before applying any remaining
portion of the payment to any other out-
standing tax liabilities of the person. A
person may not designate the manner in
which the IRS will apply the payment.
.03 The IRS will give a person written
notice of whether the person’s request has
been granted or denied. The IRS’s denial
of a request for any reason will not be sub-
ject to an administrative appeal.
SECTION 6. EFFECTIVE DATE
This revenue procedure is effective
November 5, 2012, the date this revenue
procedure was released to the public.
SECTION 7. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Skyler K. Bradbury of the
Office of the Associate Chief Counsel,
Procedure and Administration. For further
information regarding this revenue pro-
cedure, contact Elizabeth Cowan at (202)
622–4940 (not a toll-free call).
26 CFR 601.201: Rulings and determination letters.
(Also: Part I, Sections 846; 1.846–1.)
Rev. Proc. 2012–44
SECTION 1. PURPOSE
This revenue procedure prescribes the
loss payment patterns and discount factors
for the 2012 determination year. These
factors will be used to compute discounted
unpaid losses under § 846 of the Internal
Revenue Code.
SECTION 2. BACKGROUND
.01 Section 846 provides that dis-
counted unpaid losses must be separately
determined for each accident year of each
line of business by applying an interest
rate determined under § 846(c) and the
appropriate loss payment pattern to the
amount of unpaid losses as measured at
the end of the tax year.
Section 846(d) directs the Secretary to
use the most recent aggregate loss pay-
ment data of property and casualty insur-
ance companies to determine and publish a
loss payment patternfor each line of busi-
ness every five years. This payment pat-
tern is used to discount unpaid losses for
the accident year ending with a determina-
tion year and for each of the four succeed-
ing accident years.
Section 846(e) allows a taxpayer to
make an election in each determination
year to use its own historical payment
pattern instead of the Secretary’s tables.
This election does not apply to any inter-
national insurance or reinsurance line of
business.
Section 846(f)(4) defines the term “line
of business” as a category for the report-
ing of loss payment patterns on the annual
statement for property and casualty com-
panies approved by the National Associa-
tion of Insurance Commissioners (NAIC),
except that the multiple peril lines shall be
treated as a single line of business. Sec-
tion 846(f)(5) states that the term “multiple
peril lines” means the lines of business re-
lating to farmowners multiple peril, home-
owners multiple peril, commercial multi-
ple peril, ocean marine, aircraft (all perils),
and boiler and machinery.
.02 Pursuant to § 846(d), the Secretary
has determined a loss payment pattern for
each property and casualty line of busi-
ness for the 2012 determination year that,
pursuant to § 846(d)(1), must be applied
through the 2016 accident year.
.03 The loss payment patterns for the
2012 determination year are based on the
aggregate loss payment information re-
ported on the 2010 annual statements of
property and casualty insurance compa-
nies and compiled by A.M. Best and Co.
The tables are arranged in alphabetical
December 3, 20126452012–49 I.R.B.

order. Following is anadditional explana-
tion of some of the tables and changes to
the tables.
(1)NAIC Changes in Lines of Busi-
ness. The NAIC has changed the report-
ing of unpaid loss experience on the annual
statement for warranty companies. These
changes are reflected in the lines of busi-
ness set forth below.
(2)Format of the Tables. To simplify
the tables, the columns entitled Tax Year
provide the actual tax years, rather than
AY+0,AY+1,andsoon.
(3)Accident Years Not Separately Re-
ported on the NAIC Annual Statement.
Section V of Notice 88–100, 1988–2 C.B.
439, sets forth a composite method for
computing discounted unpaid losses for
accident years that are not separately re-
ported on the annual statement. The tables
separately provide discount factors for
taxpayers who elect to use the composite
method of section V of Notice 88–100.
SeeRev. Proc. 2002–74, 2002–2 C.B.
980.
SECTION 3. SCOPE
This revenue procedure applies to any
taxpayer that is required to discount unpaid
losses under § 846 for a line of business
using the discount factors published by the
Secretary.
SECTION 4. TABLES OF DISCOUNT
FACTORS
.01 The following tables present sepa-
rately for each line of business the discount
factors under § 846 for accident year 2012.
All the discount factors presented in this
section were determined using the appli-
cable interest rate under § 846(c) for 2012,
2.89 percent, and by assuming all loss pay-
ments occur in the middle of the calendar
year.
.02 If the groupings of individual
lines of business on the annual statement
change, taxpayers must discount unpaid
losses on the resulting line of business in
accordance with the discounting patterns
that would have applied to those unpaid
losses based on their classification on the
2012 annual statement.
.03 Tables.
Accident and Health
(Other Than Disability Income or Credit Disability Insurance)
Taxpayers that do not use the composite method of Notice 88–100 should use 98.5856 percent to discount unpaid losses incurred
in this line of business in the 2012 accident year and that are outstanding at theend of the 2012 and later taxable years.
Taxpayers that use the composite method of Notice 88–100 should use 98.5856 percent to discount all unpaid losses in this line of
business that are outstanding at the end of the 2012 taxable year.
Auto Physical Damage
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
2012
90.265790.2657
9.7343
9.5863
98.4790
201399.74789.4822
0.25220.2451
97.2010
Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount unpaid losses
incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2014 and later years0.12610.12610.1243
98.5856
Taxpayers t
hat use the composite method of Notice 88–100 should use 98.5856 percent to discount unpaid losses incurred in this
line of busi
ness in 2012 and prior years and that are outstanding at the end of the 2014 taxable year.
2012–49 I.R.B.646December 3, 2012

Commercial Auto/Truck Liability/Medical
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
2012
25.703425.7034
74.296669.8790
94.0541
201348.2664
22.562951.7336
49.011994.7389
201467.883419.617132.1166
30.529895.0593
2015
82.0630
14.1795
17.937017.029194.9384
201690.4161
8.35329.5839
9.048394.4114
201794.62934.2132
5.37075.0362
93.7708
201897.02032.39102.9797
2.756492.5056
201998.22831.20811.77171.6107
90.9135
2020
98.6653
0.43701.33471.2140
90.9566
2021
98.8635
0.1982
1.1365
1.048092.2160
Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount unpaid losses
incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
20220.19820.93820.877293.4963
20230.19820.7400
0.701594.7956
20240.1982
0.54170.5207
96.1082
2025
0.1982
0.3435
0.334697.4146
2026 and later years0.1982
0.1453
0.1432
98.5856
Taxpayers that use the composite method of Notice 88–100 shoulduse 94.9072 percent to discount unpaid losses incurred in this
line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Composite
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounte
d
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
2012
39.528139.5281
60.4719
55.7933
92.2631
201362.026722.498637.9733
34.584391.0753
201473.7017
11.6750
26.298323.741390.2768
2015
80.08466.3830
19.915417.952990.1459
2016
85.78185.6971
14.218212.692989.2717
201790.28094.49929.71918.4960
87.4154
2018
91.9588
1.67788.04127.0396
87.5436
201992.97221.01347.0278
6.215188.4353
2020
94.0835
1.1113
5.91655.267489.0295
202194.74690.6634
5.2531
4.746890.3608
Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount unpaid losses
incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
December 3, 20126472012–49 I.R.B.

Composite
20220.6634
4.5898
4.211191.7492
20230.66343.9264
3.6599
93.2124
20240.66343.26313.092894.7824
2025
0.6634
2.59972.509396.5231
2026 and later years0.66341.93641.9090
98.5856
Taxpayers that use the composite method of Notice 88–100 should use 93.7821 percent to discount unpaid losses incurred in this
line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Fidelity/Surety
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
201222.844922.8449
77.155174.247596.2315
2013
55.8585
33.0137
44.1415
42.906097.2010
Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount unpaid losses
incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2014 and later years22.070722.0707
21.758698.5856
Taxpayers tha
t use the composite method of Notice 88–100 should use 98.5856 percent to discount unpaid losses incurred in this
line of busine
ss in 2012 and prior years and that are outstanding at the end of the 2014 taxable year.
Financial Guaranty/Mortgage Guaranty
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
2012
6.25156.251593.7485
90.0777
96.0845
2013
43.0154
36.7639
56.984655.3896
97.2010
Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount unpaid losses
incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2014 and later years28.492328.492328.0893
98.5856
Taxpayers that use the composite method of Notice 88–100 shoulduse 98.5856 percent to discount unpaid losses incurred in this
line of business in 2012 and prior years and that are outstanding at the end of the 2014 taxable year.
International (Composite)
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
2012
39.528139.5281
60.4719
55.7933
92.2631
201362.026722.498637.9733
34.584391.0753
201473.7017
11.6750
26.298323.741390.2768
2015
80.08466.3830
19.915417.952990.1459
2012–49 I.R.B.648December 3, 2012

International (Composite)
2016
85.78185.6971
14.218212.692989.2717
201790.28094.49929.71918.4960
87.4154
2018
91.9588
1.67788.04127.0396
87.5436
201992.97221.01347.0278
6.215188.4353
2020
94.0835
1.1113
5.91655.267489.0295
202194.74690.6634
5.2531
4.746890.3608
Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount unpaid losses
incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
20220.6634
4.5898
4.211191.7492
20230.66343.9264
3.6599
93.2124
20240.66343.26313.092894.7824
2025
0.6634
2.59972.509396.5231
2026 and later years0.66341.93641.9090
98.5856
Taxpayers that use the composite method of Notice 88–100 should use 93.7821 percent to discount unpaid losses incurred in this
line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Medical Professional Liability— Claims-Made
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
20126.34626.3462
93.653885.6244
91.4266
2013
23.0958
16.749676.904271.1091
92.4645
201441.6827
18.586858.317354.310693.1295
201556.5267
14.844043.473340.823293.9041
201671.2882
14.7615
28.711827.0298
94.1415
201782.302311.014117.697716.6387
94.0165
2018
86.5143
4.2120
13.4857
12.8472
95.2653
201991.14224.6279
8.85788.524296.2335
202094.86643.7242
5.1336
4.9929
97.2591
2021
97.54082.67452.4592
2.4244
98.5856
Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount unpaid losses
incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2022 and later years
2.4592
––
98.5856
Taxpayers that use the composite method of Notice 88–100 shoulduse 98.5856 percent to discount unpaid losses incurred in this
line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Medical Professional Liability— Occurrence
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
20121.20441.2044
98.7956
86.170987.2213
20134.33763.1332
95.662485.483089.3591
201411.8161
7.4785
88.183980.3677
91.1365
2015
24.708812.8928
75.2912
69.6126
92.4579
December 3, 20126492012–49 I.R.B.

Medical Professional Liability— Occurrence
201642.386317.6774
57.613753.693493.1954
2017
57.1600
14.773842.8400
40.2594
93.9762
201868.979711.819631.020329.4337
94.8851
201982.4247
13.445017.5753
16.6464
94.7145
202086.70844.283713.291612.782396.1682
202191.67014.96178.32998.1188
97.4659
Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount unpaid losses
incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2022 and later years4.96173.36833.3206
98.5856
Taxpayers tha
t use the composite method of Notice 88–100 should use 93.6211 percent to discount unpaid losses incurred in this
line of busine
ss in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Miscellaneous Casualty
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
201269.073169.073130.9269
29.893596.6586
2013
85.5169
16.443814.483114.077797.2010
Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount unpaid losses
incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2014 and later years
7.24157.2415
7.1391
98.5856
Taxpayers that use the composite method of Notice 88–100 shoulduse 98.5856 percent to discount unpaid losses incurred in this
line of business in 2012 and prior years and that are outstanding at the end of the 2014 taxable year.
Multiple Peril Lines
(Homeowners/Farmowners, Commercial Multiple Peril, and Special Liability
(Ocean Marine, Aircraft (All Perils), Boiler and Machinery))
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
201260.971960.971939.028137.0187
94.8513
2013
82.9059
21.934117.0941
15.8398
92.6624
201489.27836.372410.72179.833791.7181
201591.5605
2.2822
8.4395
7.8029
92.4579
2016
94.4255
2.8649
5.57455.1224
91.8898
2017
96.5899
2.16443.4101
3.0750
90.1726
201897.60231.01242.39772.1369
89.1235
201998.00340.40111.99661.791889.7436
202098.34100.3376
1.65901.501290.4859
2021
98.5727
0.23171.42731.309691.7483
Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount unpaid losses
incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2012–49 I.R.B.650December 3, 2012

Multiple Peril Lines
(Homeowners/Farmowners, Commercial Multiple Peril, and Special Liability
(Ocean Marine, Aircraft (All Perils), Boiler and Machinery))
20220.2317
1.1957
1.112493.0370
20230.23170.96400.9096
94.3539
20240.23170.73240.7009
95.7035
2025
0.2317
0.5007
0.4862
97.0975
2026 and later years0.23170.2691
0.265398.5856
Taxpayers that use the composite method of Notice 88–100 shoulduse 93.1358 percent to discount unpaid losses incurred in this
line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Other (Including Credit)
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
2012
54.658954.658945.341144.050997.1546
201384.2314
29.572515.768615.3272
97.2010
Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount unpaid losses
incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2014 and later years7.88437.88437.7728
98.5856
Taxpayers that use the composite method of Notice 88–100 shoulduse 98.5856 percent to discount unpaid losses incurred in this
line of business in 2012 and prior years and that are outstanding at the end of the 2014 taxable year.
Other Liability — Claims-Made
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
20127.42707.4270
92.5730
84.138790.8891
2013
25.280817.8538
74.719268.460491.6236
201444.210818.9301
55.789251.2373
91.8409
201556.4956
12.2848
43.504440.257192.5355
201669.283812.788330.716228.448792.6181
201777.66628.382322.333820.768392.9904
2018
83.15725.4910
16.8428
15.7987
93.8010
201988.1777
5.0205
11.822311.162894.4213
2020
93.13154.95396.86856.460594.0597
202192.9490-0.1826
7.0510
6.832496.8986
Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount unpaid losses
incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
20223.26393.78713.719198.2030
2023 and later years3.2639
0.52320.515898.5856
Taxpayers
that use the composite method of Notice 88–100 should use 98.2239 percent to discount unpaid losses incurred in this
line of bus
iness in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
December 3, 20126512012–49 I.R.B.

Other Liability — Occurrence
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
201210.072110.072189.9279
79.650988.5720
2013
24.3995
14.3274
75.6005
67.419989.1791
201437.336612.937262.6634
56.245689.7583
201552.414215.077647.585842.577189.4745
201664.3437
11.929535.6563
31.706988.9239
2017
73.79509.451226.205023.036587.9085
2018
79.77565.9807
20.2244
17.635787.2005
201984.09634.3206
15.9037
13.7628
86.5381
2020
85.68781.5915
14.3122
12.5462
87.6607
202186.92241.234613.0776
11.6565
89.1329
Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount unpaid losses
incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
20221.234611.843110.7411
90.6950
20231.2346
10.6085
9.799292.3713
20241.23469.37408.830294.1988
2025
1.23468.13947.8331
96.2365
2026 and later years1.23466.90486.8072
98.5856
Taxpayers that use the composite method of Notice 88–100 shoulduse 92.6009 percent to discount unpaid losses incurred in this
line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Private Pa
ssenger Auto Liability/Medical
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounte
d
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
201242.988142.9881
57.011954.606195.7801
201371.9931
29.0051
28.006926.7630
95.5587
2014
84.8250
12.8318
15.175014.520595.6868
201592.35007.52517.6500
7.3071
95.5183
2016
96.26653.91653.73353.5456
94.9681
201797.98801.72142.01201.9019
94.5282
2018
98.7958
0.80781.2042
1.137594.4596
2019
99.2445
0.4487
0.75550.7152
94.6679
2020
99.4543
0.2097
0.54570.523195.8548
202199.63700.18270.3630
0.352997.2105
Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount unpaid losses
incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2022 and later years0.18270.18030.1777
98.5856
Taxpayers that use the composite method of Notice 88–100 shoulduse 98.5029 percent to discount unpaid losses incurred in this
line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
2012–49 I.R.B.652December 3, 2012

Products Liability — Claims-Made
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
2012
4.52704.527095.4730
83.833087.8080
201316.0134
11.4865
83.9866
74.6045
88.8291
2014
45.1313
29.1179
54.8687
47.224986.0690
201539.2459-5.885460.754154.5596
89.8039
2016
44.83575.589855.164350.4663
91.4837
2017
72.161527.325827.8385
24.2070
86.9550
201880.44488.2834
19.555216.5044
84.3991
2019
73.2957
-7.149126.704324.2330
90.7459
202087.482414.1866
12.517610.5432
84.2267
2021
87.7500
0.2677
12.250010.5764
86.3381
Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount unpaid losses
incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
20220.267711.982310.6106
88.5517
20230.267711.7147
10.645790.8750
20240.267711.447010.6819
93.3158
2025
0.267711.179310.7191
95.8828
2026 and later years0.267710.9117
10.757398.5856
Taxpayers that use the composite method of Notice 88–100 shoulduse 92.8642 percent to discount unpaid losses incurred in this
line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Products L
iability — Occurrence
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounte
d
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
20127.19367.193692.806480.942987.2170
2013
16.9555
9.7619
83.0445
73.3802
88.3625
201428.362411.406971.637663.930489.2413
201539.7945
11.4321
60.205554.1818
89.9948
2016
54.390614.596145.6094
40.942289.7670
201760.9060
6.5154
39.0940
35.5165
90.8490
201867.77606.870032.2240
29.574491.7775
2019
75.71197.9359
24.288122.379392.1411
2020
79.5966
3.884720.4034
19.085693.5415
202183.94304.3464
16.057015.2285
94.8401
Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount unpaid losses
incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
December 3, 20126532012–49 I.R.B.

Products Liability — Occurrence
20224.346411.7107
11.259996.1507
20234.34647.36437.1766
97.4508
2024 and later years4.34643.0179
2.975298.5856
Taxpayers that use the composite method of Notice 88–100 shoulduse 96.3135 percent to discount unpaid losses incurred in this
line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Reinsurance — Nonproportional Assumed Property
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
201220.100320.100379.8997
75.458594.4415
2013
59.2833
39.183040.716737.894193.0676
201473.086713.803426.913324.9877
92.8453
201580.3675
7.2808
19.6325
18.324693.3382
201687.72787.360312.272211.388392.7976
2017
94.44546.71755.55464.9035
88.2774
2018
96.5143
2.0689
3.4857
2.9466
84.5335
201997.94681.4326
2.05321.5786
76.8884
2020
97.4560
-0.4909
2.5440
2.122283.4180
2021
97.0652
-0.39082.9348
2.5799
87.9068
Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount unpaid losses
incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
20220.1836
2.7512
2.468289.7139
20230.1836
2.56752.353391.6537
20240.18362.3839
2.235093.7531
2025
0.18362.20032.113396.0476
2026 and later years0.18362.01661.9881
98.5856
Taxpayers that use the composite method of Notice 88–100 shoulduse 89.7139 percent to discount unpaid losses incurred in this
line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Reinsuran
ce — Nonproportional Assumed Liability
Tax Year
Estimated
Cumulativ
e
Losses
Paid
(%)
Estimated
Losses Pai
d
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounte
d
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
20123.49873.4987
96.5013
84.409187.4694
201323.217019.718376.783066.847487.0601
201443.7483
20.531356.251747.953485.2478
2015
38.9131
-4.8352
61.0869
54.2434
88.7977
201647.92989.0167
52.070246.6654
89.6201
2017
80.0315
32.1017
19.968515.451777.3805
2018
76.5053-3.5292
23.4947
19.4751
82.8913
201978.17011.664921.829918.3492
84.0554
202080.0717
1.9015
19.9283
16.950785.0580
202179.8791-0.192620.1209
17.6359
87.6494
2012–49 I.R.B.654December 3, 2012

Reinsurance — Nonproportional Assumed Liability
Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount unpaid losses
incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
20221.124618.996317.0048
89.5164
20231.124617.8717
16.355591.5162
20241.124616.7471
15.6875
93.6726
2025
1.1246
15.622515.000196.0158
2026 and later years1.124614.497914.2928
98.5856
Taxpayers that use the composite method of Notice 88–100 shoulduse 91.3700 percent to discount unpaid losses incurred in this
line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Reinsurance — Nonproportional Assumed Financial Lines
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
2012
1.54231.542398.4577
88.802090.1930
201320.9273
19.3850
79.0727
71.7053
90.6827
2014
30.47059.543369.5295
64.097492.1873
2015
46.3043
15.833753.6957
49.888992.9103
2016
51.84645.542148.153645.7090
94.9234
201772.7869
20.9405
27.2131
25.7890
94.7671
201882.09679.309717.903317.0911
95.4629
201989.26307.166410.7370
10.3158
96.0773
2020
95.3692
6.10624.63084.4201
95.4510
2021
96.7995
1.4303
3.2005
3.097096.7682
Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount unpaid losses
incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
20221.43031.7702
1.735798.0539
2023 and later years1.43030.3399
0.335198.5856
Taxpayers that use the composite method of Notice 88–100 shoulduse 98.0539 percent to discount unpaid losses incurred in this
line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Special Property
(Fire, Allied Lines, Inland Marine, Earthquake, Burglary and Theft)
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
2012
55.614555.614544.3855
43.3187
97.5967
201389.332833.718210.667210.368797.2010
Taxpayers t
hat do not use the composite method of Notice 88–100 should use the following factor to discount unpaid losses
incurred in
this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2014 and lat
er years
5.33365.33365.258298.5856
Taxpayers that use the composite method of Notice 88–100 shoulduse 98.5856 percent to discount unpaid losses incurred in this
line of business in 2012 and prior years and that are outstanding at the end of the 2014 taxable year.
December 3, 20126552012–49 I.R.B.

Warranty
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
2012
85.410185.410114.589914.364598.4555
2013
99.5388
14.12870.46120.448397.2010
Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount unpaid losses
incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2014 and later years0.23060.23060.2273
98.5856
Taxpayers that
use the composite method of Notice 88–100 should use 98.5856 percent to discount unpaid losses incurred in this
line of busines
s in 2012 and prior years and that are outstanding at the end of the 2014 taxable year.
Workers’ Compensation
Tax Year
Estimated
Cumulative
Losses
Paid
(%)
Estimated
Losses Paid
Each Year
(%)
Unpaid
Losses at
Year End
(%)
Discounted
Unpaid
Losses at
Year End
(%)
Discount
Factors
(%)
201221.897321.897378.102768.3810
87.5527
201343.4962
21.598956.503848.448585.7437
2014
56.006112.5099
43.9939
37.1592
84.4646
201563.55447.548236.445630.576683.8965
201668.9880
5.4337
31.0120
25.9486
83.6730
2017
73.9567
4.968726.0433
21.6586
83.1638
2018
76.0580
2.101323.9420
20.1531
84.1746
2019
77.63651.578522.3635
19.1344
85.5607
202080.11942.482819.880617.1689
86.3597
2021
81.3456
1.2262
18.6544
16.421288.0286
Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount unpaid losses
incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
20221.226217.4281
15.6519
89.8084
20231.226216.201914.860491.7203
20241.2262
14.9757
14.046193.7927
2025
1.226213.749413.2082
96.0635
2026 and later years1.2262
12.5232
12.3460
98.5856
Taxpayers that use the composite method of Notice 88–100 shoulduse 92.3332 percent to discount unpaid losses incurred in this
line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
SECTION 5. DRAFTING
INFORMATION
The principal author of this rev-
enue procedure is David Remus of
the Office of Associate Chief Counsel
(Financial Institutions & Products). For
further information regarding this revenue
procedure, contact Mr. Remus on (202)
622–3970 (not a toll-free call).
26 CFR 601.201: Rulings and determination letters.
(Also: Part I, Section 832, 846; 1.832–4, 1.846–1.)
Rev. Proc. 2012–45
SECTION 1. PURPOSE
This revenue procedure prescribes the
salvage discount factors for 2012. These
2012–49 I.R.B.656December 3, 2012

factors must be used to compute dis-
counted estimated salvage recoverable
under § 832 of the Internal Revenue Code.
SECTION 2. BACKGROUND
Section 832(b)(5)(A) requires that all
estimated salvage recoverable (including
that which cannot be treated as an asset
for state accounting purposes) be taken
into account in computing the deduction
for losses incurred. Under § 832(b)(5)(A),
paid losses are reduced by salvage and
reinsurance recovered during the taxable
year. This amount is adjusted to reflect
changes in discounted unpaid losses on
nonlife insurance contracts and in unpaid
losses on life insurance contracts. An
adjustment is then made to reflect any
changes in discounted estimated salvage
recoverable and in reinsurance recover-
able.
Pursuant to § 832(b), the amount of es-
timated salvage is determined on a dis-
counted basis in accordance with proce-
dures established by the Secretary.
SECTION 3. SCOPE
This revenue procedure applies to any
taxpayer that is required to discount esti-
mated salvage recoverable under § 832.
SECTION 4. TABLES OF DISCOUNT
FACTORS
.01 The following tables present sep-
arately for each line of business the dis-
count factors under § 832 for 2012. All
the discount factors presented in this sec-
tion were determined using the applicable
interest rate under § 846(c) for 2012, which
is 2.89 percent, and by assuming all esti-
mated salvage is recovered in the middle
of the calendar year.
.02 Section V of Notice 88–100,
1988–2 C.B. 439, sets forth a composite
method for computing discounted unpaid
losses for accident years that are not sep-
arately reported on the annual statement.
Rev. Proc. 2002–74, section 3.03, 2002–2
C.B. 980, provides that an insurance com-
pany that elects to use the composite
method of Notice 88–100 must use the
same method to compute discounted esti-
mated salvage recoverable. Accordingly,
the tables separately provide discount fac-
tors for taxpayers who elect to use the
composite method of section V of Notice
88–100.
.02 These tables must be used by tax-
payers irrespective of whether they elected
to discount unpaid losses using their own
experience under § 846(e).
.03 Tables.
Accident and Health
(Other Than Disability Income or
Credit Disability Insurance)
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
98.5856 percent to discount salvage re-
coverable with respect to losses incurred
in this line of business in the 2012 acci-
dent year as of the end of the 2012 and
later taxable years.
Taxpayers that use the composite
method of Notice 88–100 should use
98.5856 percent to discount all salvage
recoverable in this line of business as of
the end of the 2012 taxable year.
Auto Physical Damage
Tax Year
Discount
Factors
(%)
201297.9926
201397.2010
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2012 accident
year.
2014 and later
years
98.5856
Taxpayers that use the composite
method of Notice 88–100 should use
98.5856 percent to discount salvage
recoverable as of the end of the 2014
taxable year with respect to losses in-
curred in this line of business in 2012
and prior years.
Commercial Auto/Truck
Liability/Medical
Tax Year
Discount
Factors
(%)
201294.8601
201394.3170
201494.7640
2015
94.1089
201694.6321
201794.3280
2018
90.0593
201988.2417
2020
91.0508
202192.3107
Taxpayers t
hat do not use the compos-
ite method o
f Notice 88–100 should use
the followi
ng factors to discount salvage
recoverab
le as of the end of the tax year
shown with
respect to losses incurred in
this line o
f business in the 2012 accident
year.
2022
93.5910
202394.8890
202496.1977
2025
97.4916
2026 and later
years
98.5856
Taxpayers that use the composite
method of Notice 88–100 should use
93.5910 percent to discount salvage
recoverable as of the end of the 2022
taxable year with respect to losses in-
curred in this line of business in 2012
and prior years.
Compos
ite
Tax Year
Discou
nt
Factors
(%)
2012
94.5210
201394.2990
2014
94.5290
2015
92.9773
201693.4682
2017
93.0095
December 3, 20126572012–49 I.R.B.

Composite
2018
92.8551
2019
93.5193
2020
93.5262
2021
94.8250
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factors to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2012 accident
year.
202296.1362
202397.4384
2024 and later
years
98.5856
Taxpayers that use the composite
method of Notice 88–100 should use
96.1362 percent to discount salvage
recoverable as of the end of the 2022
taxable year with respect to losses in-
curred in this line of business in 2012
and prior years.
Fidelity/
Surety
Tax Year
Discount
Factors
(%)
2012
95.5378
201397.2010
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2012 accident
year.
2014 and later
years
98.5856
Fidelity/Surety
Taxpayers that use the composite
method of Notice 88–100 should use
98.5856 percent to discount salvage
recoverable as of the end of the 2014
taxable year with respect to losses in-
curred in this line of business in 2012
and prior years.
Financial Guaranty/Mortgage
Guaranty
Tax Year
Discount
Factors
(%)
2012
95.0291
201397.2010
Taxpayers tha
t do not use the compos-
ite method of N
otice 88–100 should use
the following
factor to discount salvage
recoverable a
s of the end of the tax year
shownwithre
spect to losses incurred in
this line of b
usiness in the 2012 accident
year.
2014 and late
r
years
98.5856
Taxpayers t
hat use the composite
method of No
tice 88–100 should use
98.5856 per
cent to discount salvage
recoverabl
e as of the end of the 2014
taxable yea
r with respect to losses in-
curred in t
his line of business in 2012
and prior y
ears.
International (Composite)
Tax Year
Discount
Factors
(%)
2012
94.5210
201394.2990
2014
94.5290
2015
92.9773
201693.4682
2017
93.0095
2018
92.8551
2019
93.5193
International (Composite)
2020
93.5262
2021
94.8250
Taxpayers that
do not use the composite
method of Notic
e 88–100 should
use the followi
ng factors to discount
salvage recove
rable as of the end of the
tax year shown
with respect to losses
incurred in th
is line of business in the
2012 accident
year.
202296.1362
202397.4384
2024 and later
years
98.5856
Taxpayers that use the composite
method of Notice 88–100 should use
96.1362 percent to discount salvage
recoverable as of the end of the 2022
taxable year with respect to losses
incurred in this line of business in 2012
and prior years.
Medical Malpractice —
Claims-Made
Tax Year
Discount
Factors
(%)
201293.7912
201394.6803
201492.2134
201595.0710
2016
95.3003
2017
95.7832
2018
96.7165
2019
97.3503
2020
97.3252
2021
98.5856
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2012 accident
year.
2012–49 I.R.B.658December 3, 2012

Medical Malpractice —
Claims-Made
2022 and later
years
98.5856
Taxpayers that use the composite
method of Notice 88–100 should use
98.5856 percent to discount salvage
recoverable as of the end of the 2022
taxable year with respect to losses in-
curred in this line of business in 2012
and prior years.
Medical Malpractice — Occurrence
Tax Year
Discount
Factors
(%)
201294.4161
2013
96.5442
2014
95.9802
2015
97.2713
201696.2322
201797.6681
201897.0089
201997.0932
2020
95.2155
2021
96.5222
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factors to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2012 accident
year.
202297.7949
2023 and later
years
98.5856
Taxpayers that use the composite
method of Notice 88–100 should use
97.7949 percent to discount salvage
recoverable as of the end of the 2022
taxable year with respect to losses in-
curred in this line of business in 2012
and prior years.
Miscellaneous Casualty
Tax Year
Discount
Factors
(%)
201296.1880
201397.2010
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2012 accident
year.
2014 and later
years
98.5856
Taxpayers that use the composite
method of Notice 88–100 should use
98.5856 percent to discount salvage
recoverable as of the end of the 2014
taxable year with respect to losses in-
curred in this line of business in 2012
and prior years.
Multiple Per
il Lines (Homeown-
ers/Farmown
ers, Commercial
Multiple Pe
ril, and Special Liability
(Ocean Mari
ne, Aircraft (All Perils),
Boiler and M
achinery))
Tax Year
Discount
Factors
(%)
2012
95.2320
2013
95.1821
2014
95.7186
2015
93.7419
2016
95.3602
2017
95.8534
2018
96.0053
2019
95.8968
2020
95.5350
2021
98.5856
Multiple Peril Lines (Homeown-
ers/Farmowners, Commercial
Multiple Peril, and Special Liability
(Ocean Marine, Aircraft (All Perils),
Boiler and Machinery))
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2012 accident
year.
2022 and later
years
98.5856
Taxpayers that use the composite
method of Notice 88–100 should use
98.5856 percent to discount salvage
recoverable as of the end of the 2022
taxable year with respect to losses in-
curred in this line of business in 2012
and prior years.
Other (Including Credit)
Tax Year
Discount
Factors
(%)
201296.9381
201397.2010
Taxpayers t
hat do not use the compos-
ite method o
f Notice 88–100 should use
the followi
ng factor to discount salvage
recoverabl
e as of the end of the tax year
shown with
respect to losses incurred in
this line o
f business in the 2012 accident
year.
2014 and la
ter
years
98.5856
Taxpayer
s that use the composite
method of
Notice 88–100 should use
98.5856 p
ercent to discount salvage
recovera
ble as of the end of the 2014
taxable y
ear with respect to losses in-
curred in
this line of business in 2012
and prio
r years.
December 3, 20126592012–49 I.R.B.

Other Liability — Claims-Made
Tax Year
Discount
Factors
(%)
2012
93.5677
201393.9483
201493.9860
201595.1734
2016
95.2144
2017
95.3785
2018
96.5322
2019
96.4985
202096.7811
202198.0683
Taxpayers t
hat do not use the compos-
ite method o
f Notice 88–100 should use
the followi
ng factor to discount salvage
recoverabl
e as of the end of the tax year
shown with
respect to losses incurred in
this line o
f business in the 2012 accident
year.
2022 and la
ter
years
98.5856
Taxpayers
that use the composite
method of N
otice 88–100 should use
98.5856 p
ercent to discount salvage
recovera
ble as of the end of the 2022
taxable y
ear with respect to losses in-
curred in
this line of business in 2012
and prior
years.
Other Liability — Occurrence
Tax Year
Discount
Factors
(%)
201290.3389
201391.4894
2014
92.7055
2015
93.3713
201694.1617
2017
95.2667
2018
95.4478
2019
95.3361
202097.2714
2021
98.5856
Other Liability — Occurrence
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2012 accident
year.
2022 and later
years
98.5856
Taxpayers that use the composite
method of Notice 88–100 should use
98.5856 percent to discount salvage
recoverable as of the end of the 2022
taxable year with respect to losses in-
curred in this line of business in 2012
and prior years.
Private Passenger Auto
Liability/Medical
Tax Year
Discount
Factors
(%)
2012
96.1315
2013
95.9985
2014
95.9758
201595.3522
2016
95.3346
2017
95.4812
2018
95.2304
2019
95.5517
202096.8469
202198.1429
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2012 accident
year.
2022 and later
years
98.5856
Private Passenger Auto
Liability/Medical
Taxpayers that use the composite
method of Notice 88–100 should use
98.5856 percent to discount salvage
recoverable as of the end of the 2022
taxable year with respect to losses in-
curred in this line of business in 2012
and prior years.
Products Liability — Claims-Made
Tax Year
Discount
Factors
(%)
201289.8196
201391.4110
2014
89.5038
201595.0117
201692.8700
201798.1820
2018
96.3577
2019
85.3703
2020
98.2509
2021
98.5856
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2012 accident
year.
2022 and later
years
98.5856
Taxpayers that use the composite
method of Notice 88–100 should use
97.2650 percent to discount salvage
recoverable as of the end of the 2022
taxable year with respect to losses
incurred in this line of business in 2012
and prior years.
Product
s Liability — Occurrence
Tax Year
Discoun
t
Factors
(%)
2012–49 I.R.B.660December 3, 2012

Products Liability — Occurrence
201290.7468
2013
90.8255
201491.6861
201593.0159
201693.6033
2017
94.5013
201894.4114
201996.6942
202096.0812
202197.3920
Taxpayers t
hat do not use the compos-
ite method o
f Notice 88–100 should use
the followi
ng factor to discount salvage
recoverab
le as of the end of the tax year
shown with
respect to losses incurred in
this line o
f business in the 2012 accident
year.
2022 and la
ter
years
98.5856
Taxpayer
s that use the composite
method of
Notice 88–100 should use
98.5856 p
ercent to discount salvage
recovera
ble as of the end of the 2022
taxable y
ear with respect to losses in-
curred i
n this line of business in 2012
and prio
r years.
Reinsurance — Nonproportional
Assumed Property
Tax Year
Discount
Factors
(%)
201292.8721
2013
95.2410
201493.0843
2015
91.7774
2016
94.0583
201792.9687
201896.9437
2019
90.0756
2020
95.94
21
202197.2787
Reinsurance — Nonproportional
Assumed Property
Taxpayers that do not use the composite
method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred
in this line of business in the 2012
accident year.
2022 and later
years
98.5856
Taxpayers that use the composite
method of Notice 88–100 should use
95.1349 percent to discount salvage
recoverable as of the end of the 2022
taxable year with respect to losses in-
curred in this line of business in 2012
and prior years.
Reinsurance — Nonproportional
Assumed Liability
Tax Year
Discount
Factors
(%)
2012
87.4545
201389.8069
201484.2710
201585.5707
2016
91.5781
201794.6877
201893.8198
201994.3842
2020
92.5740
2021
96.6295
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factors to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2012 accident
year.
2022
97.904
5
2023 and later
years
98.5856
Reinsurance — Nonproportional
Assumed Liability
Taxpayers that use the composite
method of Notice 88–100 should use
97.9045 percent to discount salvage
recoverable as of the end of the 2022
taxable year with respect to losses in-
curred in this line of business in 2012
and prior years.
Reinsurance — Nonproportional
Assumed Financial Lines
Tax Year
Discount
Factors
(%)
201288.2387
201389.9441
2014
93.6256
201593.7540
2016
95.1568
201793.2046
2018
95.1579
2019
95.0763
202098.3612
2021
98.5856
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2012 accident
year.
2022 and later
years
98.5856
Taxpayers that use the composite
method of Notice 88–100 should use
98.5856 percent to discount salvage
recoverable as of the end of the 2022
taxable year with respect to losses in-
curred in this line of business in 2012
and prior years.
December 3, 20126612012–49 I.R.B.

Special Property (Fire, Allied Lines,
Inland Marine, Earthquake, Glass,
Burglary and Theft)
Tax Year
Discount
Factors
(%)
2012
96.3560
201397.2010
Taxpayers that do not use the compos-
ite method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred in
this line of business in the 2012 accident
year.
2014 and later
years
98.5856
Taxpayers that use the composite
method of Notice 88–100 should use
98.5856 percent to discount salvage
recoverable as of the end of the 2014
taxable year with respect to losses in-
curred in this line of business in 2012
and prior years.
Warranty
Tax Year
Discount
Factors
(%)
201296.8733
Warranty
201397.2010
Taxpayers that do not use the composite
method of Notice 88–100 should use
the following factor to discount salvage
recoverable as of the end of the tax year
shown with respect to losses incurred
in this line of business in the 2012
accident year.
2014 and later
years
98.5856
Taxpayers that use the composite
method of Notice 88–100 should use
98.5856 percent to discount salvage
recoverable as of the end of the 2014
taxable year with respect to losses
incurred in this line of business in 2012
and prior years.
Workers’ Compensation
Tax Year
Discount
Factors
(%)
201291.4448
201393.0206
201493.8697
2015
92.3671
2016
91.7503
2017
91.0454
201891.6474
201993.0907
Workers’ Compensation
2020
93.3550
2021
94.6576
Taxpayers that
do not use the compos-
ite method of No
tice 88–100 should use
the following f
actors to discount salvage
recoverable as
of the end of the tax year
shownwithres
pect to losses incurred in
this line of bu
siness in the 2012 accident
year.
2022
95.9786
202397.3078
2024 and later
years
98.5856
Taxpayers that use the composite
method of Notice 88–100 should use
96.5709 percent to discount salvage
recoverable as of the end of the 2022
taxable year with respect to losses in-
curred in this line of business in 2012
and prior years.
SECTION 5.
DRAFTING
INFORMATI
ON
The principal author of this revenue
procedure is David Remus of the Office
of Associate Chief Counsel (Financial
Institutions & Products). For further infor-
mation regarding this revenue procedure,
contact Mr. Remus on (202) 622–3970
(not a toll-free call).
2012–49 I.R.B.662December 3, 2012

Part IV. Items o
fGeneralInterest
Hurricane San
dy Relief
Announcement
2012–44
Purpose
This announce
ment provides relief
to taxpayers
who have been adversely
affected by H
urricane Sandy and have
retirement a
ssets in qualified employer
plans they wo
uld like to use to alleviate
hardships c
aused by Hurricane Sandy. In
addition, t
his announcement provides re-
lief from ce
rtain verification procedures
that may be r
equired under retirement
plans with
respect to loans and hardship
distribut
ions. The relief provided under
this annou
ncement is in addition to the
relief alr
eady provided by the Service pur-
suant to Ne
ws Release IR–2012–83 under
§ 7508A of
the Internal Revenue Code
(“Code”)
for victims of Hurricane Sandy.
(See the r
egulations under § 7508A and
Section 8
of Rev. Proc. 2007–56, 2007–2
C.B. 388
, for a listing of employee bene-
fit-rel
ated acts currently postponed until
Februar
y 1, 2013, because of the disaster.)
Backgro
und
The laws
relating to qualified em-
ployer
plans impose various limitations
on the p
ermissibility of loans and distri-
bution
s from those plans. For example,
§401(k
)(2)(B)(i) of the Code provides that
in the c
aseofa§401(k)planthatispart
of a pr
ofit-sharing or stock bonus plan,
elect
ive deferrals may be distributed only
in cer
tain situations, one of which is on
accou
nt of hardship. Section 403(b)(11)
provi
des similar rules with respect to
elec
tive deferrals under a § 403(b) plan.
Sect
ion 457(d)(1)(A) provides that a plan
desc
ribed in § 457(b) may not permit dis-
trib
utions before the occurrence of certain
enum
erated events, one being when the
part
icipant is faced with an unforeseeable
eme
rgency. Certain other types of plans
or a
ccounts are not permitted to make
in-
service distributions (distributions to
apa
rticipant who is still an employee)
eve
n if there is a hardship. For example,
in
-service hardship distributions are gen-
er
ally not permitted from pension plans or
fr
om accounts holding qualified nonelec-
ti
ve contributions (“QNECs”) described
in § 401(m)(4)
(C) or qualified matching
contribution
s (“QMACs”) described in
§ 401(k)(3)(D
)(ii)(I). However, Rev. Rul.
2004–12, 2004
–2 C.B. 478, holds that if
amounts attri
butable to rollover contribu-
tions are sep
arately accounted for within
a plan, those
amounts may be distributed
at any time, p
ursuant to the employee’s
request. Sec
tion 72(p) imposes certain re-
quirements
relating to plan loans. Unless
those requi
rements are satisfied, a loan is
treated as a
distribution under the plan.
In order to m
ake a loan or distribution
(including
a hardship distribution), a plan
must contai
n language authorizing the loan
or distrib
ution. Also, except to the ex-
tent a dist
ribution consists of already-taxed
amounts, t
he distribution will be includible
in gross in
come and generally subject to
the 10-per
cent additional tax under § 72(t).
Similar r
ules relating to income inclusion
and taxat
ion apply to a distribution from an
IRA.
Plan prov
isions and regulations under
certain C
ode sections establish verification
procedur
es that a plan must follow before
loans or
distributions can be made from
the plan
. For example, the regulations un-
der § 401
(k) set forth certain criteria an
employe
e must meet in order to receive
ahardsh
ip distribution. A plan may con-
tain pr
ocedures designed to confirm that
the cri
teria have been satisfied.
Relief
As desc
ribed below, a qualified em-
ployer
plan will not be treated as failing
to sati
sfy any requirement under the Code
or regu
lations merely because the plan
makes
a loan, or a hardship distribution
for a n
eed arising from Hurricane Sandy,
to an e
mployee or former employee whose
princ
ipal residence on October 26, 2012,
was lo
cated in one of the counties or
Trib
al Nations that have been identified
as co
vered disaster areas because of the
deva
station caused by Hurricane Sandy or
whos
e place of employment was located
in on
e of these counties or Tribal Nations
on th
at date or whose lineal ascendant or
des
cendant, dependent or spouse had a
pri
ncipal residence or place of employ-
men
t in one of these counties or Tribal
Nat
ions on that date. Covered disaster
are
as are identified as federally declared
disaster area
s in the News Releases is-
sued by the IRS
forVictimsofHurricane
Sandy, which a
re found on IRS.gov at: —
http://www.i
rs.gov/uac/Newsroom/Help-
for-Victims-
of-Hurricane-Sandy.Planad-
ministrator
s may rely upon representations
from the empl
oyee or former employee as
to the need fo
r and amount of a hardship
distributio
n, unless the plan administrator
has actual k
nowledge to the contrary, and
the distrib
ution is treated as a hardship dis-
tribution f
or all purposes under the Code
and regulat
ions.
For purpose
s of this announcement, a
“qualified
employer plan” means a plan
or contrac
t meeting the requirements of
§ 401(a), 4
03(a) or 403(b), and, for pur-
poses of th
e hardship relief, which could, if
it contain
ed enabling language, make hard-
ship distr
ibutions. For purposes of this
paragrap
h, a “qualified employer plan”
also mean
s a plan described in § 457(b)
maintain
ed by an eligible employer de-
scribed i
n § 457(e)(1)(A), and any hard-
ship ari
sing from Hurricane Sandy is
treated
as an “unforeseeable emergency”
for purp
oses of distributions from such
plans. F
or example, a profit-sharing
or stock
bonus plan that currently does
not pro
vide for hardship or other in-ser-
vice di
stributions may nevertheless make
Sandy-
related hardship distributions pur-
suant t
o this announcement, except from
QNEC or
QMAC accounts or from earn-
ings o
n elective contributions (see below
for pl
an amendment requirements). A
defin
ed benefit or money purchase plan,
which
generally cannot make in-service
hards
hip distributions, may not make
hard
ship distributions pursuant to this an-
noun
cement, other than from a separate
acco
unt, if any, within the plan containing
eith
er employee contributions or rollover
amou
nts.
The a
mount available for hardship
dist
ribution is limited to the maximum
amo
unt that would be permitted to be
ava
ilable for a hardship distribution under
the
plan under the Code and regulations.
How
ever, the relief provided by this an-
nou
ncement applies to any hardship of the
emp
loyee, not just the types enumerated
in
the regulations, and no post-distribution
co
ntribution restrictions are required. For
ex
ample, regulations under § 401(k) pro-
December 3, 20126632012–49 I.R.B.

vide safe harbor hardship distribution stan-
dards under which a hardship is deemed to
exist only for certain enumerated events,
and after receipt of the hardship amount,
the employee is prohibited from making
contributions for at least 6 months. Plans
need not follow these rules with respect to
hardship distributions for which relief is
provided under this announcement.
To make a loan or hardship distribution,
a qualified employer plan that does not
provide for them must be amended to pro-
vide for loans or hardship distributions no
later than the end of the first plan year be-
ginning after December 31, 2012. To qual-
ify for the relief under this announcement,
a hardship distribution must be made on
account of a hardship resulting from Hurri-
cane Sandy and be made on or after Octo-
ber 26, 2012, and no later than February 1,
2013. Plan loans made pursuant to this an-
nouncement must satisfy the requirements
of § 72(p).
In addition, a retirement plan will not
be treated as failing to follow procedural
requirements for plan loans (in the case
of retirement plans other than IRAs) or
distributions (in the case of all retirement
plans, including IRAs) imposed by the
terms of the plan merely because those
requirements are disregarded for any pe-
riod beginning on or after October 26,
2012, and continuing through February 1,
2013, with respect to distributions to
individuals describedin the first paragraph
under “Relief”, above, provided the plan
administrator (or financial institution
in the case of distributions from IRAs)
makes a good-faith diligent effort under
the circumstances to comply with those
requirements. However, as soon as
practicable, the planadministrator (or
financial institution in the case of IRAs)
must make a reasonable attempt to
assemble any forgone documentation. For
example, if spousal consent is required
for a plan loan or distribution and the
plan terms require production of a death
certificate if the employee claims his or
her spouse is deceased, the plan will not
be disqualified for failure to operate in
accordance with its terms if it makes a loan
or distribution to an individual described
in the first paragraph under “Relief”
in the absence of a death certificate if
it is reasonable to believe, under the
circumstances, that the spouse is deceased,
the loan or distribution is made no later
than February 1, 2013, and the plan
administrator makes reasonable efforts
to obtain the death certificate as soon as
practicable. Taxpayers are reminded that
in general the normal spousal consent
rules continue to apply. For purposes of
this announcement, “retirement plan” has
the same meaning as “eligible retirement
plan” under § 402(c)(8)(B).
The Department of Labor has advised
Treasury and the Internal Revenue Service
that it will not treat any person as hav-
ing violated the provisions of Title I of
the Employee Retirement Income Security
Act solely because that person complied
with the provisionsof this announcement.
Drafting Information
The principal author of this announce-
ment is Eric Slack of the Employee Plans,
Tax Exempt and Government Entities
Division. Questions regarding this an-
nouncement may be sent via e-mail to
RetirementPlanQuestions@irs.gov.
Announcement of Disciplinary Sanctions From the Office
of Professional Responsibility
Announcement 2012-47
TheOfficeofProfessionalResponsi-
bility (OPR) announcesrecent disciplinary
sanctions involving attorneys, certified
public accountants, enrolled agents, en-
rolled actuaries, enrolled retirement plan
agents, and appraisers. These individuals
are subject to the regulations governing
practice before the Internal Revenue Ser-
vice (IRS), which are set out in Title 31,
Code of Federal Regulations, Part 10, and
which are published in pamphlet form as
Treasury Department Circular No. 230.
The regulations prescribe the duties and
restrictions relating to such practice and
prescribe the disciplinary sanctions for
violating the regulations.
The disciplinary sanctions to be im-
posed for violation of the regulations are:
Disbarred from practice before the
IRS—An individual who is disbarred is
not eligible to represent taxpayers before
the IRS.
Suspended from practice before the
IRS—An individual who is suspended is
not eligible to represent taxpayers before
the IRS during the term of the suspension.
Censured in practice before the
IRS—Censure is a public reprimand. Un-
like disbarment or suspension, censure
does not affect an individual’s eligibility
to represent taxpayers before the IRS, but
OPR may subject the individual’s future
representations to conditions designed to
promote high standards of conduct.
Monetary penalty—A monetary
penalty may be imposed on an individual
who engages in conduct subject to sanc-
tion or on an employer, firm, or entity
if the individual was acting on its behalf
and if it knew, or reasonably should have
known, of the individual’s conduct.
Disqualification of appraiser—An
appraiser who is disqualified is barred
from presenting evidence or testimony in
any administrative proceeding before the
Department of the Treasury or the IRS.
Under the regulations, attorneys, cer-
tified public accountants, enrolled agents,
enrolled actuaries, and enrolled retirement
plan agents may not assist, or accept assis-
tance from, individuals who are suspended
or disbarred with respect to matters consti-
tuting practice (i.e., representation) before
the IRS, and they maynot aid or abet sus-
pended or disbarred individuals to practice
before the IRS.
Disciplinary sanctions are described in
these terms:
Disbarred by decision after hearing,
Suspended by decision after hearing,
Censured by decision after hearing,
Monetary penalty imposed after hear-
ing, and Disqualified after hearing—An
administrative law judge (ALJ) conducted
an evidentiary hearing upon OPR’s com-
plaint alleging violation of the regulations
2012–49 I.R.B.664December 3, 2012

and issued a decision imposing one of
these sanctions. After 30 days from the
issuance of the decision, in the absence of
an appeal, the ALJ’s decision became the
final agency decision.
Disbarred by default decision, Sus-
pended by default decision, Censured by
default decision, Monetary penalty im-
posed by default decision, and Disqual-
ified by default decision—An ALJ, after
findingthatnoanswertoOPR’scomplaint
had been filed, granted OPR’s motion for a
default judgment and issued a decision im-
posing one of these sanctions.
Disbarment by decision on appeal,
Suspended by decision on appeal, Cen-
sured by decision on appeal, Monetary
penalty imposed by decision on ap-
peal, and Disqualified by decision on
appeal—The decision of the ALJ was
appealed to the agency appeal authority,
acting as the delegate of the Secretary
of the Treasury, and the appeal authority
issued a decision imposing one of these
sanctions.
Disbarred by consent, Suspended by
consent, Censured by consent, Mone-
tary penalty imposed by consent, and
Disqualified by consent—In lieu of a
disciplinary proceeding being instituted
or continued, an individual offered a con-
sent to one of these sanctions and OPR
accepted the offer. Typically, an offer
of consent will provide for: suspension
for an indefinite term; conditions that the
individual must observe during the sus-
pension; and the individual’s opportunity,
after a stated number of months, to file
with OPR a petition for reinstatement af-
firming compliance with the terms of the
consent and affirming current eligibility
to practice (i.e., an active professional
license or active enrollment status). An
enrolled agent or an enrolled retirement
plan agent may also offer to resign in order
to avoid a disciplinary proceeding.
Suspended by decision in expedited
proceeding, Suspended by default de-
cision in expedited proceeding, Sus-
pended by consent in expedited pro-
ceeding—OPR instituted an expedited
proceeding for suspension (based on cer-
tain limited grounds, including loss of a
professional licenseand criminal convic-
tions).
OPR has authority to disclose the
grounds for disciplinary sanctions in these
situations: (1) an ALJ or the Secretary’s
delegate on appeal has issued a decision
on or after September 26, 2007, which was
the effective date of amendments to the
regulations that permit making such deci-
sions publicly available; (2) the individual
has settled a disciplinary case by signing
OPR’s “consent to sanction” form, which
requires consenting individuals to admit to
one or more violations of the regulations
and to consent to the disclosure of the in-
dividual’s own return information related
to the admitted violations (for example,
failure to file Federal income tax returns);
or (3) OPR has issued a decision in an
expedited proceeding for suspension.
Announcements of disciplinary sanc-
tions appear in the Internal Revenue Bul-
letin at the earliest practicable date. The
sanctions announced below are alphabet-
ized first by the names of states and sec-
ond by the last names of individuals. Un-
less otherwise indicated, section numbers
(e.g., §10.51) refer to the regulations.
City & StateNameProfessionalDisciplinary SanctionEffective Date(s)
Designation
Arizona
PhoenixEverett, James J.AttorneyDisbarred by ALJ for
violation of §10.51
(conviction under
18 U.S.C. §157
(bankruptcy fraud); §152
(3) (false declaration);
§1956 (money
laundering/concealment))
August 21, 2010
Arkansas
ProctorDonaldson, Bryan D.Attorney48 month suspension
by ALJ for violation of
§10.51 (failed to file
Federal individual income
tax returns for tax years
2003 and 2004; failed
to timely file Federal
individual income tax
returns for tax years 2001
and 2002; failed to timely
pay tax liabilities for tax
years 2001 and 2002)
From August 23,
2009 until
reinstated by
Director, OPR
December 3, 20126652012–49 I.R.B.

City & StateNameProfessionalDisciplinary SanctionEffective Date(s)
Designation
California
CarlsbadAnson, Ronald I.CPASuspended by default
decision in expedited
proceeding under
§10.82 (conviction
under 18 U.S.C. §371,
conspiracy)
From
November 19,
2010 until
reinstated by
Director, OPR
La MesaFinch, Mark D.CPADisbarred by ALJ for
violation of §10.51
(giving false or
misleading information
to the Department of the
Treasury; failure to timely
file Federal individual
income tax returns for tax
years 2006 and 2007)
May 2, 2010
PowayReed, Michael J.AttorneySuspended by default
decision in expedited
proceeding under §10.82
(suspension of attorney
license)
From
November 19,
2010 until
reinstated by
Director, OPR
C
olorado
DenverLevine, Alan L.CPAPublic censure for
admitted violation of
§10.51 (failed to file
Federal individual income
tax returns for tax years
2001, 2002, 2003, 2004
and 2005)
August 11, 2009
Florida
Panama CityWeeks, Gregory K.AttorneySuspended by default
decision in expedited
proceeding under
§10.82 (conviction under
26 U.S.C. §7206(1), filing
false Federal income tax
returns)
From June 18,
2012, until
reinstated by
Director, OPR
Georgia
DawsonCraft, C. WesleyCPASuspended, on appeal, by
Appellate Authority for
violation of §10.51 (failed
to timely file Federal
income tax returns, and
timely pay Federal tax
liabilities for tax years
2001, 2002, 2003, 2004,
2005, 2006, and 2007)
From October 12,
2011 until
reinstated by
Director, OPR
2012–49 I.R.B.666December 3, 2012

City & StateNameProfessionalDisciplinary SanctionEffective Date(s)
Designation
Georgia (Continued)
TiftonWalker-Lanier, BettyAttorneySuspended by default
decision in expedited
proceeding under §10.82
(suspension of attorney
license)
From March 25,
2011 until
reinstated by
Director, OPR
Illinois
ChicagoHorwich, Arnold S.CPAPublic censure for
admitted violation of
§10.22 (diligence as to
accuracy)
June 17, 2011
Kansas
Prairie VillageBarr, James E.CPA40 month suspension
imposedbyAppellate
Authority (failure to
timely file a Federal
income tax return for tax
years 2001, 2002, 2003,
and 2004; and failure to
file a Federal income tax
return for tax years 2005
and 2006)
From July 16,
2011 until
reinstated by
Director, OPR
Maryland
BethesdaFox, David E.AttorneySuspended by default
decision in expedited
proceeding under §10.82
(attorney disbarment)
June 7, 2011
Massachusetts
ScituateSullivan, Brian B.AttorneySuspended by default
decision in expedited
proceeding under §10.82
(suspension of attorney
license)
From March 25,
2011 until
reinstated by
Director, OPR
Michigan
Ann ArborLee, Lily Y.Enrolled Agent36 month suspension
by Appellate Authority
(failure to timely file a
Federal income tax return
for tax years 2004 and
2005; and failure to file a
Federal income tax return
for tax years 2006 and
2007)
From June 13,
2011 until
reinstated by
Director, OPR
December 3, 20126672012–49 I.R.B.

City & StateNameProfessionalDisciplinary SanctionEffective Date(s)
Designation
Minnesota
PlymouthVolstad, Paul S.CPA
Enrolled Agent
Suspended for breach
ofOfferofConsentto
Public Censure, which
required timely filing of
all required tax returns
From August 10,
2011 until
reinstated by
Director, OPR
Missouri
CassvilleDivers, Robert D.Enrolled AgentPublic censure for
admitted violation of
§10.22 (diligence as to
accuracy)
August 3, 2009
Nevada
Las VegasMoore, Michael J.CPASuspended by default
decision in expedited
proceeding under §10.82
(revocation of CPA
license)
June 9, 2011
North Carolina
CharlotteRoss, Walter H.CPASuspended by ALJ for
violation of §10.51
(suspension of CPA
license)
From July 7, 2011
until reinstated by
Director, OPR
Ohio
ColumbianaKaufman, Gregory B.CPASuspended by default
decision in expedited
proceeding under §10.82
(revocation of CPA
license)
From
November 14,
2011 until
reinstated by
Director, OPR
ColumbusSmith, Patrick E.CPASuspended by default
decision in expedited
proceeding under §10.82
(revocation of CPA
license)
From July 6, 2011
until reinstated by
Director, OPR
Oregon
Grants PassCronin, ValerieEnrolled AgentDisbarred by ALJ for
violation of §10.51
(failure to timely file
Federal individual income
tax returns for tax years
2001 and 2002, and
failure to file individual
income tax returns for
years 2004, 2005, 2006
and 2007)
From
September 16,
2010 until
reinstated by
Director, OPR
2012–49 I.R.B.668December 3, 2012

City & StateNameProfessionalDisciplinary SanctionEffective Date(s)
Designation
Pennsylvania
PhiladelphiaMaslo, William R.CPAConsent suspension for
admitted violation of
§10.51 (failure to timely
file and pay Federal
income and employment
taxes)
From April 16,
2009 until
reinstated by
Director, OPR
Tennessee
KnoxvilleGee Jr., Edgar H.CPADisbarment by ALJ
upheld on appeal for
violation of §10.51
(failure to pay Federal
income taxes for tax years
1997, 1998, 1999, 2000,
2001, 2002, 2003, 2004
and 2005)
Indefinite from
August 8, 2011,
but not less than 5
years
MemphisSiegfried, Russell A.CPA48 month consent
suspension for admitted
violation of §10.51
(failure to file a Federal
income tax return for tax
years 2001, 2002, 2003,
2004, 2005 and 2006, and
failure to file Form 941,
Employer’s Quarterly
Federal Tax Return,
beginning December
2002 to December 2006)
From April 23,
2009 until
reinstated by
Director, OPR
Texas
DentonGraves, John P.CPAConsent suspension for
admitted violation of
§10.51 (failure to timely
file and pay taxes)
From April 28,
2009 until
reinstated by
Director, OPR
Virginia
NorfolkCoston, Dwayne H.CPADisbarment by ALJ
upheld on appeal for
violation of §10.51
(failure to timely file a
Federal income tax return
for tax year 2005; and
failure to file a Federal
income tax return for tax
years 2007, 2008 and
2009)
Indefinite from
October 14, 2011,
but not less than 5
years
December 3, 20126692012–49 I.R.B.

City & StateNameProfessionalDisciplinary SanctionEffective Date(s)
Designation
West Virginia
BeaverReusing Jr., Matthew J.AttorneySuspended by default
decision in expedited
proceeding under §10.82
(conviction under
26 U.S.C. §7206(2),
assisting in false tax
returns and conviction
under 26 U.S.C. §7203,
failure to file tax returns)
From June 9, 2011
until reinstated by
Director, OPR
Wisconsin
MilwaukeePurnell, Jeffrey W.AttorneyDisbarred by ALJ for
violation of §10.51
(failure to timely file
individual Federal income
tax returns for tax years
2002, 2003, 2004, 2005,
2006, 2007 and 2008)
Indefinite from
October 4, 2010,
but not less than 5
years
2012–49 I.R.B.670December 3, 2012

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the ef-
fect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is be-
ingextendedtoapplytoavariationofthe
fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that the
same principle also applies to B, the earlier
ruling is amplified. (Compare withmodi-
fied,below).
Clarifiedis used in those instances
where the language in a prior ruling is be-
ing made clear because the language has
caused, or may cause, some confusion.
It is not used where a position in a prior
ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modifiedis used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
withamplifiedandclarified, above).
Obsoleteddescribes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used in
a ruling that lists previously published rul-
ings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.
Revokeddescribes situations where the
position in the previously published ruling
is not correct and the correct position is
beingstatedinanewruling.
Supersededdescribes a situation where
the new ruling does nothing more than re-
state the substance and situation of a previ-
ously published ruling (or rulings). Thus,
the term is used to republish under the
1986 Code and regulations the same po-
sition published under the 1939 Code and
regulations. The term is also used when
it is desired to republish in a single rul-
ing a series of situations, names, etc., that
were previously published over a period of
time in separate rulings. If the new rul-
ing does more than restate the substance
of a prior ruling, a combination of terms
is used. For example,modifiedandsu-
persededdescribes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is self
contained. In this case, the previously pub-
lished ruling is first modified and then, as
modified, is superseded.
Supplementedis used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names in
subsequent rulings. After the original rul-
ing has been supplemented several times, a
new ruling may be published that includes
the list in the original ruling and the ad-
ditions, and supersedes all prior rulings in
the series.
Suspendedis used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of cases
in litigation, or the outcome of a Service
study.
Abbreviations
The fol
lowing abbreviations in current use
and for
merly used will appear in material
publis
hedintheBulletin.
A—Individual.
Acq.—A
cquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank
.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cu
mulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Coo
perative.
Ct.D.—Court Decision.
CY—County.
D—Decede
nt.
DC—Dummy Corporation.
DE—Donee.
Del. Order
—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Emp
loyer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduc
iary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Fo
reign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Fed
eral Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grante
e.
GP—General Partner.
GR—Grantor.
IC—Insura
nce Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited
Partner.
LR—Lessor.
M—Minor.
Nonacq.—No
nacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Persona
l Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Pa
rtnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Re
al Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsi
diary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target
Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Trans
feree.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpay
er.
TR—Trust.
TT—Trustee.
U.S.C.—Uni
ted States Code.
X—Corporation.
Y—Corporation.
Z—Corporat
ion.
December 3, 2012i2012–49 I.R.B.

Numerical Finding List
1
Bulletins 2012–27 through 2012–49
Announcements:
2012-26, 2012-27 I.R.B.8
2012-27, 2012-27 I.R.B.10
2012-28, 2012-27 I.R.B.10
2012-29, 2012-42 I.R.B.500
2012-30, 2012-34 I.R.B.314
2012-31, 2012-34 I.R.B.315
2012-32, 2012-35 I.R.B.325
2012-33, 2012-35 I.R.B.325
2012-34, 2012-36 I.R.B.334
2012-35, 2012-38 I.R.B.356
2012-36, 2012-46 I.R.B.547
2012-37, 2012-45 I.R.B.543
2012-38, 2012-43 I.R.B.527
2012-39, 2012-48 I.R.B.635
2012-40, 2012-47 I.R.B.556
2012-41, 2012-44 I.R.B.532
2012-42, 2012-47 I.R.B.561
2012-44, 2012-49 I.R.B.663
2012-47, 2012-49 I.R.B.664
Notices:
2012-2, 2012-45 I.R.B.538
2012-39, 2012-31 I.R.B.95
2012-44, 2012-28 I.R.B.45
2012-45, 2012-29 I.R.B.59
2012-46, 2012-30 I.R.B.86
2012-47, 2012-31 I.R.B.98
2012-48, 2012-31 I.R.B.102
2012-49, 2012-31 I.R.B.119
2012-50, 2012-31 I.R.B.121
2012-51, 2012-33 I.R.B.150
2012-52, 2012-35 I.R.B.317
2012-53, 2012-35 I.R.B.317
2012-55, 2012-36 I.R.B.332
2012-56, 2012-39 I.R.B.370
2012-57, 2012-40 I.R.B.424
2012-58, 2012-41 I.R.B.436
2012-59, 2012-41 I.R.B.443
2012-60, 2012-41 I.R.B.445
2012-61, 2012-42 I.R.B.479
2012-62, 2012-42 I.R.B.489
2012-63, 2012-42 I.R.B.496
2012-64, 2012-44 I.R.B.528
2012-66, 2012-49 I.R.B.639
2012-68, 2012-48 I.R.B.574
Proposed Regulations:
REG-126770-06, 2012-38 I.R.B.347
REG-138367-06, 2012-40 I.R.B.426
REG-101812-07, 2012-34 I.R.B.311
REG-134042-07, 2012-27 I.R.B.5
Proposed Regulations— Continued:
REG-140668-07, 2012-43 I.R.B.501
REG-153627-08, 2012-29 I.R.B.60
REG-136491-09, 2012-35 I.R.B.321
REG-138489-09, 2012-38 I.R.B.355
REG-125570-11, 2012-30 I.R.B.93
REG-130266-11, 2012-32 I.R.B.126
REG-134935-11, 2012-29 I.R.B.64
REG-141832-11, 2012-28 I.R.B.54
REG-107889-12, 2012-28 I.R.B.53
REG-113738-12, 2012-29 I.R.B.66
REG-134974-12, 2012-47 I.R.B.553
Revenue Procedures:
2012-28, 2012-27 I.R.B.4
2012-29, 2012-28 I.R.B.49
2012-30, 2012-33 I.R.B.165
2012-31, 2012-33 I.R.B.256
2012-32, 2012-34 I.R.B.267
2012-33, 2012-34 I.R.B.272
2012-34, 2012-34 I.R.B.280
2012-35, 2012-37 I.R.B.341
2012-36, 2012-39 I.R.B.374
2012-37, 2012-41 I.R.B.449
2012-38, 2012-48 I.R.B.575
2012-39, 2012-41 I.R.B.470
2012-40, 2012-40 I.R.B.424
2012-41, 2012-45 I.R.B.539
2012-42, 2012-46 I.R.B.545
2012-43, 2012-49 I.R.B.643
2012-44, 2012-49 I.R.B.645
2012-45, 2012-49 I.R.B.656
Revenue Rulings:
2012-19, 2012-28 I.R.B.16
2012-20, 2012-27 I.R.B.1
2012-21, 2012-32 I.R.B.123
2012-22, 2012-48 I.R.B.565
2012-23, 2012-39 I.R.B.359
2012-24, 2012-36 I.R.B.329
2012-25, 2012-37 I.R.B.337
2012-26, 2012-39 I.R.B.358
2012-27, 2012-41 I.R.B.435
2012-28, 2012-42 I.R.B.476
2012-29, 2012-42 I.R.B.475
2012-30, 2012-45 I.R.B.534
2012-31, 2012-49 I.R.B.636
Treasury Decisions:
9591, 2012-28 I.R.B.32
9592, 2012-28 I.R.B.41
9593, 2012-28 I.R.B.17
9594, 2012-29 I.R.B.57
9595, 2012-30 I.R.B.71
9596, 2012-30 I.R.B.84
9597, 2012-34 I.R.B.258
Treasury Decisions— Continued:
9598, 2012-38 I.R.B.343
9599, 2012-40 I.R.B.417
9600, 2012-47 I.R.B.548
1
A cumulative list of all revenue rulings, revenueprocedures, Treasury decisions, etc., publishedin Internal Revenue Bulletins 2012–1 through 2012–26 is in Internal Revenue Bulletin
2012–26, dated June 25, 2012.
2012–49 I.R.B.iiDecember 3, 2012

Finding List of Current Actions on
Previously Published Items
1
Bulletins 2012–27 through 2012–49
Announcements:
83-196
Superseded by
Rev. Proc. 2012-31, 2012-33 I.R.B.256
85-141
Superseded by
Rev. Proc. 2012-31, 2012-33 I.R.B.256
2008-105
Modified and superseded by
Ann. 2012-34, 2012-36 I.R.B.334
2012-29
Corrected by
Ann. 2012-41, 2012-44 I.R.B.532
2012-38
Corrected by
Ann. 2012-41, 2012-44 I.R.B.532
Notices:
2009-24
Amplified by
Notice 2012-51, 2012-33 I.R.B.150
2011-81
Superseded by
Notice 2012-63, 2012-42 I.R.B.496
2012-51
Amplified by
Notice 2012-51, 2012-33 I.R.B.150
Proposed Regulations:
REG-100276-97
Withdrawn by
Ann. 2012-27, 2012-27 I.R.B.10
REG-136491-09
Hearing cancelled by
Ann. 2012-39, 2012-48 I.R.B.635
REG-130266-11
Hearing scheduled by
Ann. 2012-29, 2012-42 I.R.B.500
Ann. 2012-38, 2012-43 I.R.B.527
Hearing rescheduled by
Ann. 2012-41, 2012-44 I.R.B.532
Revenue Procedures:
94-22
Modified and superseded by
Rev. Proc. 2012-35, 2012-37 I.R.B.341
95-15
Superseded by
Rev. Proc. 2012-31, 2012-33 I.R.B.256
Revenue Procedures— Continued:
97-27
Modified by
Rev. Proc. 2012-39, 2012-41 I.R.B.470
98-32
Modified and superseded by
Rev. Proc. 2012-33, 2012-34 I.R.B.272
2007-38
Modified and superseded by
Rev. Proc. 2012-32, 2012-34 I.R.B.267
2011-14
Clarified and modified by
Rev. Proc. 2012-39, 2012-41 I.R.B.470
2011-40
Superseded by
Rev. Proc. 2012-30, 2012-33 I.R.B.165
2011-50
Superseded by
Rev. Proc. 2012-36, 2012-39 I.R.B.374
2011-60
Superseded by
Rev. Proc. 2012-38, 2012-48 I.R.B.575
2012-30
Corrected and clarified by
Ann. 2012-36, 2012-46 I.R.B.547
Treasury Decisions:
9752
Corrected by
Ann. 2012-35, 2012-38 I.R.B.356
1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2012–1 through 2012–26 is in Internal Revenue Bulletin 2012–26, dated June 25, 2012.
December 3, 2012iii2012–49 I.R.B.

Internal Revenue Service
W
ashington,DC20224
Official Business
Penalty for Private Use, $300
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 andare notincluded as part of the subscription to the Internal Revenue Bulletin. For the foreseeable future,
the IRS will not create Cumulative Bulletins after the 2008–2 edition. 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.
ACCESS THE INTERNAL REVENUE BULLETIN ON THE INTERNET
You may view the Internal Revenue Bulletin on the Internet at www.irs.gov. Select Businesses. Under Businesses Topics, select
More Topics. Then select Internal Revenue Bulletins.
INTERNAL REVENUE BULLETINS ON CD-ROM
Internal Revenue Bulletins are available annually as partof Publication 1796 (Tax Products CD-ROM). The CD-ROM can be
purchased from National Technical Information Service (NTIS) on the Internet at www.irs.gov/cdorders (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 979050, St. Louis, MO 63197–9000. Please allow two to
six weeks, plus mailing time, for delivery.
WE WELCOME COMMENTS ABOUT THE INTERNAL
REVENUE BU
LLETIN
If you have
comments concerning the format or production of the Internal Revenue Bulletin or suggestions for improving it, we
would be p
leased to hear from you. You can email us your suggestions orcomments through the IRS Internet Home Page (www.irs.gov)
or write t
o the IRS Bulletin Unit, SE:W:CAR:MP:T:M:S, Washington, DC 20224.