Internal Revenue Bulletin 2017-11 (PDF rendition): IRS Notices

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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.
EMPLOYEE PLANS
Notice 2017–20, page 1010.
The notice extends the period for an employer that provides a
qualified small employer health reimbursement arrangement
(QSEHRA) (under a new Code section added by 21st Century
Cures Act (Cures Act)) to furnish an initial written notice to its
eligible employees regarding the QESHRA. The notice extends
the period from March 13, 2017 (90 days after the Cures Act
was enacted) to at least 90 days after additional guidance
regarding the contents of the QSEHRA notice is issued. The
notice also provides transition relief from penalties under sec-
tion 6652(o) (also added to the Code by the Cures Act) for
failure to furnish such written notice until after further guidance
has been issued.
Finding Lists begin on page ii.
Bulletin No. 2017–11
March 13, 2017

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and en-
force the law with 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.
It is the policy of the Service to publish in the Bulletin all
substantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of internal
management are not published; however, statements of inter-
nal 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, identify-
ing 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.—1986 Code.
This part includes rulings and decisions based on provisions of
the Internal 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, Legisla-
tion 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 Sec-
retary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and 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 contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
March 13, 2017Bulletin No. 2017–11

Part III. Administrative, Procedural, and Miscellaneous
EXTENSION OF PERIOD
FOR FURNISHING WRITTEN
QSEHRA NOTICE TO
ELIGIBLE EMPLOYEES
Notice 2017–20
PURPOSE
This notice extends the period for an
employer to furnish an initial written no-
tice to its eligible employees regarding a
qualified small employer health reim-
bursement arrangement (QSEHRA) under
section 9831(d) of the Internal Revenue
Code (Code).
BACKGROUND
A QSEHRA is an arrangement de-
scribed in section 9831(d), which was
added to the Code by the 21st Century
Cures Act (Cures Act), Pub. L. 114–255,
130 Stat. 1033, enacted December 13,
2016. Under that section, an eligible em-
ployer (generally an employer with fewer
than 50 full-time employees, including
full-time equivalent employees, that does
not offer a group health plan to any of its
employees) may provide a QSEHRA to its
eligible employees. Under a QSEHRA,
after an eligible employee provides proof
of coverage, payments or reimbursements
may be made to that eligible employee for
expenses for medical care (as defined in
section 213(d) and including expenses for
premiums for individual health insurance
policies) incurred by the eligible em-
ployee or the eligible employee’s family
members, provided certain requirements
are satisfied. Section 9831(d)(1) provides
that a QSEHRA will not be treated as a
group health plan.
Section 9831(d)(4) generally requires
an eligible employer to furnish a written
notice to its eligible employees at least 90
days before the beginning of a year for
which the QSEHRA is provided (or, in the
case of an employee who is not eligible to
participate in the arrangement as of the
beginning of such year, the date on which
such employee is first so eligible). Section
9831(d)(4)(B)provides that the written no-
tice must include: (i) a statement of the
amount that would be the eligible employ-
ee’s permitted benefit under the arrange-
ment for the year; (ii) a statement that the
eligible employee should provide the infor-
mation described in clause (i) to any health
insurance exchange to which the employee
applies for advance payment of the pre-
mium tax credit; and (iii) a statement that if
the eligible employee is not covered under
minimum essential coverage for any month,
the employee may beliable for an indi-
vidual shared responsibility payment
under section 5000A for that month and
reimbursements under the arrangement
may be includible in gross income.
Section 6652(o), which was also added
to the Code by the Cures Act, imposes a
penalty for failing to timely furnish eligi-
ble employees with the required written
QSEHRA notice. Section 18001(a)(7) of
the Cures Act provides that this penalty
applies for years beginning after Decem-
ber 31, 2016, and further provides that
an eligible employer that provides a
QSEHRA to its eligible employees for a
year beginning in 2017 will not be
treated as failing to timely furnish the
initial written notice if the notice is fur-
nished to its eligible employees no later
than 90 days after the enactment of the
Cures Act. The 90
th
day after the enact-
ment of the Cures Act is March 13,
2017.
For more information about QSEHRAs,
see FAQs About Affordable Care Act Im-
plementation Part 35, Q 3, issued by the
Department of Labor, the Department of the
Treasury (Treasury), and the Department of
Health and Human Services (https://www.
dol.gov/sites/default/files/ebsa/about-ebsa/
our-activities/resource-center/faqs/aca-part-
35.pdf).
TRANSITION RELIEF
Treasury and the Internal Revenue Ser-
vice (IRS) understand that some eligible
employers may find it difficult to comply
with the written notice requirement absent
additional guidance concerning the con-
tents of the notice. Treasury and IRS in-
tend to issue that guidance in the near
future. In order to provide eligible em-
ployers additional time to furnish the ini-
tial required written notice to eligible em-
ployees following the issuance of such
guidance, an eligible employer that pro-
vides a QSEHRA to its eligible employees
for a year beginning in 2017 is not re-
quired to furnish the initial written notice
to those employees until after further
guidance has been issued by Treasury and
the IRS. That further guidance will spec-
ify a deadline for providing the initial
written notice that is no earlier than 90
days following the issuance of that guid-
ance.
1
No section 6652(o) penalties will
be imposed for failure to provide the ini-
tial written notice before the extended
deadline specified in that guidance. Em-
ployers that furnish the QSEHRA notice
to their eligible employees before further
guidance is issued may rely upon a rea-
sonable good faith interpretation of the
statute to determine the contents of the
notice.
DRAFTING INFORMATION
The principal author of this notice is
Ronald Rutherford-Triche of the Office
of Associate Chief Counsel (Tax Ex-
empt and Government Entities), al-
though other Treasury and IRS officials
participated in its development. For fur-
ther information regarding this notice,
contact Mr. Rutherford-Triche at (202)
317-5500 (not a toll-free number).
1
Consistent with section 18001(a)(7)(F)(iii) of the Cures Act, an application for enrollment under section 1411(b) of the Patient Protection and Affordable Care Act made before April 1,
2017, shall be treated as having met the requirement of section 1411(b)(3)(B) of such Act, if the information described therein is provided not later than 30 days after the date on which
the applicant receives the notice described in section 9831(d)(4) of the Code.
March 13, 2017Bulletin No. 2017–11
1010

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
effect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the 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 with
modified, below).
Clarifiedis used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. 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
being stated in a new ruling.
Supersededdescribes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a pe-
riod of time in separate rulings. If the new
ruling does more than restate the sub-
stance of a prior ruling, a combination of
terms is used. For example,modifiedand
supersededdescribes 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
published 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
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings 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 following abbreviations in current
use and formerly used will appear in ma-
terial published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
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—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE
—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.
Bulletin No. 2017–11March 13, 2017
i

Numerical Finding List
1
Bulletin 2017–1 through 2017–11
Action on Decision:
2017-1, 2016-7 I.R.B.868
Announcements:
2017-01, 2017-08 I.R.B.941
2017-02, 2017-10 I.R.B.1007
Notices:
2017-1, 2017-2 I.R.B.367
2017-2, 2017-4 I.R.B.539
2017-3, 2017-2 I.R.B.368
2017-4, 2017-4 I.R.B.541
2017-5, 2017-6 I.R.B.779
2017-6, 2017-3 I.R.B.422
2017-7, 2017-3 I.R.B.423
2017-8, 2017-3 I.R.B.423
2017-9, 2017-4 I.R.B.542
2017-10, 2017-4 I.R.B.544
2017-12, 2017-5 I.R.B.742
2017-13, 2017-6 I.R.B.780
2017-14, 2017-6 I.R.B.783
2017-15, 2017-6 I.R.B.783
2017-16, 2017-7 I.R.B.913
2017-18, 2017-9 I.R.B.997
2017-19, 2017-9 I.R.B.1000
2017-20, 2017-11 I.R.B.1010
Proposed Regulations:
REG-137604-07, 2017-7 I.R.B.923
REG-128276-12, 2017-2 I.R.B.369
REG-103477-14, 2017-5 I.R.B.746
REG-112324-15, 2017-4 I.R.B.547
REG-127203-15, 2017-7 I.R.B.918
REG-131643-15, 2017-6 I.R.B.865
REG-134438-15, 2017-2 I.R.B.373
REG-112800-16, 2017-4 I.R.B.569
REG-123829-16, 2017-5 I.R.B.764
REG-123841-16, 2017-5 I.R.B.766
REG-133353-16, 2017-2 I.R.B.372
REG-134247-16, 2017-5 I.R.B.744
REG-135122-16, 2017-9 I.R.B.1005
Revenue Procedures:
2017-1, 2017-1 I.R.B.1
2017-2, 2017-1 I.R.B.106
2017-3, 2017-1 I.R.B.130
2017-4, 2017-1 I.R.B.146
2017-5, 2017-1 I.R.B.230
2017-7, 2017-1 I.R.B.269
2017-12, 2017-3 I.R.B.424
2017-13, 2017-6 I.R.B.787
2017-14, 2017-3 I.R.B.426
2017-15, 2017-3 I.R.B.437
Revenue Procedures:—Continued
2017-16, 2017-3 I.R.B.501
2017-18, 2017-5 I.R.B.743
2017-19, 2017-7 I.R.B.913
2017-21, 2017-6 I.R.B.791
2017-22, 2017-6 I.R.B.863
2017-23, 2017-7 I.R.B.915
2017-24, 2017-7 I.R.B.916
Revenue Rulings:
2017-1, 2017-3 I.R.B.377
2017-2, 2017-2 I.R.B.364
2017-3, 2017-4 I.R.B.522
2017-4, 2017-6 I.R.B.776
2017-5, 2017-9 I.R.B.1000
2017-7, 2017-10 I.R.B.1009
Treasury Decisions:
9794, 2017-2 I.R.B.273
9795, 2017-2 I.R.B.326
9796, 2017-3 I.R.B.380
9801, 2017-2 I.R.B.355
9802, 2017-2 I.R.B.361
9803, 2017-3 I.R.B.384
9804, 2017-3 I.R.B.406
9806, 2017-4 I.R.B.524
9807, 2017-5 I.R.B.573
9808, 2017-5 I.R.B.580
9809, 2017-5 I.R.B.664
9810, 2017-6 I.R.B.775
9811, 2017-7 I.R.B.869
9814, 2017-7 I.R.B.878
9815, 2017-9 I.R.B.944
9817, 2017-9 I.R.B.968
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2016–27 through 2016–52 is in Internal Revenue Bulletin
2016–52, dated December 26, 2016.
March 13, 2017Bulletin No. 2017–11
ii

Finding List of Current Actions on
Previously Published Items
1
Bulletin 2017–1 through 2017–11
Notices:
2002-1
Amplified by
Notice 2017-1, 2017-2 I.R.B.367
2010-46
Obsoleted by
Notice 2017-1, 2017-2 I.R.B.367
2016-29
Modified by
Notice 2017-6, 2017-3 I.R.B.422
Revenue Procedures:
2013-22
Clarified by
Rev. Proc. 2017-18, 2017-05 I.R.B.743
2015-57
Modified by
Rev. Proc. 2017-24, 2017-07 I.R.B.916
Treasury Decisions:
2010-46
Obsoleted by
T.D. 9815 2017-09 I.R.B.944
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2016–27 through 2016–52 is in Internal Revenue Bulletin
2016–52, dated December 26, 2016.
Bulletin No. 2017–11March 13, 2017
iii

INTERNAL REVENUE BULLETIN
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