us-irs-revenue-procedures-irb-2009-22-pdf•Internal Revenue Bulletin 2009-22 (PDF rendition): IRS Revenue Procedures
Internal Revenue Bulletin 2009-22 (PDF rendition): IRS Revenue Procedures
us-irs-revenue-procedures-irb-2009-22-pdfInternal Revenue Bulletin 2009-22 (PDF rendition): IRS Revenue ProceduresGuidance
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Bulletin No. 200 9-22 June 1, 2009 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 T.D. 9449, page 1044. REG–107271–08, page 1051. Temporary and proposed regulations under section 163 of the Code provide guidance on how to determine the amount of prepaid mortgage insurance premiums that a taxpayer may deduct each taxable year under section 163(h)(4)(F). The reg- ulations also provide guidance on the information reporting requirements for premiums, including prepaid premiums, for mortgage insurance. Rev. Proc. 2009–29, page 1050. 2010 inflation adjusted amounts for Health Savings Ac- counts (HSAs).This procedure provides the 2010 inflation adjusted amounts for (HSAs) under section 223 of the Code. EMPLOYEE PLANS REG–115699–09, page 1052. Proposed regulations under section 401 of the Code contain proposed amendments to the regulations relating to certain cash or deferred arrangements and matching contributions. A public hearing is scheduled for September 23, 2009. Notice 2009–45, page 1047. 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 May 2009; the 24-month average segment rates; the funding transitional segment rates applicable for May 2009; and the minimum present value transitional rates for April 2009. ADMINISTRATIVE T.D. 9449, page 1044. REG–107271–08, page 1051. Temporary and proposed regulations under section 163 of the Code provide guidance on how to determine the amount of prepaid mortgage insurance premiums that a taxpayer may deduct each taxable year under section 163(h)(4)(F). The reg- ulations also provide guidance on the information reporting requirements for premiums, including prepaid premiums, for mortgage insurance. Actions Relating to Court Decisions is on the page following the Introduction. Finding Lists begin on page ii. The IRS Mission Provide Americ a’s taxpayers top quality service by helping them understand an d meet their tax responsibilities and by applying the tax 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 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. June 1, 20092009–22 I.R.B. Actions Relati ng to Decisions of the Tax Court It is the policy of the Internal Rev- enue Service t o announce at an early date whether it wil l follow the holdings in cer- tain cases. An Action on Decision is the document maki ng such an announcement. An Action on De cision will be issued at the discreti on of the Service only on unap- pealed issue s decided adverse to the gov- ernment. Gen erally, an Action on Decision is issued whe re its guidance would be help- ful to Servi ce personnel working with the same or simi lar issues. Unlike a Treasury Regulation or a Revenue Ruling, an Action on Decision is not an affirmative statement of Service position. It is not intended to serve as pu blic guidance and may not be cited as pr ecedent. Actions on Decisions shall be relied upon withi n the Service only as conclu- sions appl ying the law to the facts in the particul ar case at the time the Action on Decision was issued. Caution should be exercise d in extending the recommenda- tion of th e Action on Decision to similar cases whe re the facts are different. More- over, th e recommendation in the Action on Decisio n may be superseded by new legis- lation, regulations, rulings, cases, or Ac- tions on Decisions. Prior to 1991, t he Service published acquiescence or nonacquiescence only in certain regul ar Tax Court opinions. The Service has ex panded its acquiescence program to inc lude other civil tax cases where guidanc e is determined to be help- ful. Accordi ngly, the Service now may acquiesce or nonacquiesce in the holdings of memorandu m Tax Court opinions, as well as those of the United States District Courts, Cla ims Court, and Circuit Courts of Appeal. R egardless of the court decid- ing the case , the recommendation of any ActiononDe cision will be published in the Intern al Revenue Bulletin. The recomme ndation in every Action on Decisio n will be summarized as ac- quiescenc e, acquiescence in result only, or nonacqu iescence. Both “acquiescence” and “acqui escence in result only” mean that the S ervice accepts the holding of the court in a case and that the Service will foll ow it in disposing of cases with thesamec ontrolling facts. However, “ac- quiescen ce” indicates neither approval nor disa pproval of the reasons assigned by the co urt for its conclusions; whereas, “acquie scence in result only” indicates disagre ement or concern with some or all of those reason s. “Nonacquiescence” sig- nifies that, a lthough no further review was sought, the Se rvice does not agree with the holding of the court and, generally, will not follo w the decision in disposing of cases invol ving other taxpayers. In reference to an opinion of a circuit court of appeals, a “nonacquiescence” indicates that the Serv ice will not follow the hold- ingonanatio nwide basis. However, the Service wil l recognize the precedential impact of th e opinion on cases arising within the v enue of the deciding circuit. The Actions on Decisions published in the weekly I nternal Revenue Bulletin are consolidat ed semiannually and appear in the first B ulletin for July and the Cumula- tive Bulle tin for the first half of the year. A semiannua l consolidation also appears in the first B ulletin for the following January andinthe Cumulative Bulletin for the last half of th e year. The Commi ssioner does NOT ACQUI- ESCE in th e following decision: Cox v. Co mmissioner, 1 514 F.3d 1119 (10th Cir. 2008), rev’g 12 6 T.C. 237 (2006) 1 Nonacquiescence relating to the court of appeals’holding that indirect consideration of a tax liability in conjunction with evaluating collectionalternatives raised in a collection due process hearing for an earlier tax year constitutes prohibited prior involvement under section 6330(b)(3) and disqualifies an appeals officer from conducting a subsequent CDP hearing focusing on that liability. 2009–22 I.R.B.June 1, 2009 June 1, 20092009–22 I.R.B. Part I. Rulings and Decisions Under the Internal Revenue Code of 1986 Section 163.— Interest 26 CFR 1.163–11T: Allocation of certain prepaid qualified mortgage insurance premiums (temporary). T.D. 9449 DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 Allocation and Reporting of Mortgage Insurance Premiums AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Temporary regulations. SUMMARY: This document contains tem- porary regulations that explain how to al- locate prepaid qualified mortgage insur- ance premiums to determine the amount of the prepaid premium that is treated as qualified residence interest each taxable year under section 163(h)(4)(F) of the In- ternalRevenueCode(Code). Thetempo- rary regulations also provide guidance to reporting entities receiving premiums, in- cluding prepaid premiums, for mortgage insurance. The temporary regulations re- flect changes to the law made by the Tax Relief and Health Care Act of 2006 and the Mortgage Forgiveness Debt Relief Act of 2007. The text of the temporary regula- tions also serves as the text of the proposed regulations (REG–107271–08) set forth in the notice of proposed rulemaking on this subject in this issue of the Bulletin. DATES:Effective Date:These regulations are effective on May 7, 2009. Applicability Dates:For dates of applicability, see §§1.163–11T(d) and 1.6050H–3T(e). F OR FURTHER INFORMATION C ONTACT: Concerning §1.163–11T, An- g ela Warren, (202) 622–4950; concerning § 1.6050H–3T, Stephen Coleman (202) 6 22–4910 (not toll-free numbers). SUPPLEMENTAR Y INFORMATION: Background Section 419 o ftheTaxReliefand Health Care A ct of 2006, Public Law 109–432 (120 Stat. 2967) (2006 Act), added secti ons 163(h)(3)(E), (h)(4)(E), and (h)(4)( F) to the Code. Section 3 of the Mortgag e Forgiveness Debt Relief Act of 2007, Public Law 110–142 (121 Stat. 1803) (2007), amended section 163(h)(3) (E)(iv). In general, these new provision s treat certain qualified mortgage insurance premiums as qualified residence interest. This treatment applies only to certain q ualified mortgage insurance pre- miums pai d or accrued on or after January 1, 2007, a nd on or before December 31, 2010, on m ortgage insurance contracts issued on or after January 1, 2007. Section 1 63(h)(3)(E)(i) provides that premiums paid or accrued for qualified mortgag e insurance in connection with acquisi tion indebtedness for a qualified residen ce are treated as qualified resi- dence in terest for purposes of section 163. Se ction 163(h)(4)(E) definesquali- fied mo rtgage insuranceas (i) mortgage insura nce provided by the Veterans Ad- minist ration (VA), the Federal Housing Admini stration (FHA), or the Rural Hous- ing Ad ministration (Rural Housing) 1 ,and (ii) p rivate mortgage insurance (as de- fined by section 2 of the Homeowners Prote ction Act of 1998 (12 U.S.C. 4901) as in e ffect on December 20, 2006). The amou nt treated as qualified residence in- tere st may be reduced or eliminated under sect ion 163(h)(3)(E)(ii), which provides that the amount allowed as a deduction is ph ased out ratably by 10 percent for each $1,000 ($500 in the case of a married ind ividual filing a separate return) that the tax payer’s adjusted gross income exceeds $10 0,000 ($50,000 in the case of a married ind ividual filing a separate return). Sec tion 163(h)(4)(F) states that any amo unt paid by the taxpayer for quali- fie d mortgage insurance that is properly al locable to any mortgage the payment of which extends to periods that are af- ter the close o f the taxable year in which the amount is p aid shall be chargeable to capital acc ount and shall be treated as paid in the pe riods to which the amount is allocated. N o deduction shall be allowed for the unamo rtized balance of the account if the mortga ge is satisfied before the end of its term. The allocation rules in section 163(h)(4)( F) do not apply to amounts paid for qualifi ed mortgage insurance provided by the VA or R ural Housing. Additionally, section 163 (h)(3)(E)(iv)(II) disallows a deduction for amounts allocable to any period aft er December 31, 2010. Section 41 9 of the 2006 Act also added section 60 50H(h) to the Code, which generally provides that any person who, in the cour se of a trade or business, re- ceives fr om an individual premiums for mortgage insurance aggregating $600 or more for a ny calendar year, shall make an inform ationreturnintheformpre- scribed b y the Secretary. As defined in section 6050H(h)(3)(B), the termmort- gage ins urancehas the same meaning as qualifi ed mortgage insurance in section 163(h)( 4)(E). See also Tax Technical Cor- rectio ns Act of 2007, Public Law 110–172 (121 St at. 2473) §11(b)(2). On Janu ary 8, 2008, the IRS and the Tre asury Department published No- tice 20 08–15, 2008–4 I.R.B. 313, (see §601.6 01(d)(2)(ii)(b)) to provide guidance to indi vidual taxpayers in determining the am ount of prepaid qualified mort- gage i nsurance premiums that is treated as qua lified residence interest under sec- tion 1 63(h)(3)(E) that may be deducted in 2007, and to reporting entities receiving prem iums, including prepaid premiums, for m ortgage insurance in 2007. The no- tice provides that an individual taxpayer may a llocate the prepaid premium ratably over the shorter of (1) the stated term of the m ortgage, or (2) 84 months, beginning wit hthemonthinwhichtheinsurance was obtained. The notice also provides tha t reporting entities that receive mort- gag e insurance premiums of $600 or more in 2 007 may report either the portion of th e amount received that is allocable to 20 07, the amount actually received, or the 1 References in section 163(h)(4)(E)(i) to the Veterans Administration and Rural Housing Administration are interpreted to mean their respective successors, the Department of Veterans Affairs and Rural Housing Service. 2009–22 I.R.B.1044June 1, 2009 amount determined under an 84-month allocation method. The notice requested comments regarding the appropriate allo- cation method and reporting requirements that should apply to future years. Summary of Comments on Notice 2008–15 and Explanation of Provisions In response to Notice 2008–15, the Treasury Department and the IRS received several comments concerning the appro- priate allocation methodology for prepaid qualified mortgage insurance premiums that are treated as qualified residence inter- est under section 163(h)(3)(E). One com- menter recommended adopting the rule from Notice 2008–15 permitting taxpayers to allocate a prepaid premium ratably over the shorter of (1) the stated term of the mortgage, or (2) 84 months. According to this commenter, an 84-month allocation rule closely approximates the actual du- ration of the average mortgage insurance contract. Another commenter suggested adopting a three-yearallocation period to coincide with the Department of Housing and Urban Development’s (HUD) policy of refunding prepaid premiums on FHA loans. Under this policy, HUD refunds prepaid FHA mortgage insurance premi- ums if the borrower refinances the mort- gage through another FHA loan within the first three years of the original loan term. After consideration of these com- ments, the Treasury Department and the IRS are adopting the rule from Notice 2008–15 concerning allocation of pre- paid qualified mortgage insurance pre- miums based on the understanding that the average life of a mortgage insurance contract on home mortgages generally is seven years (84 months). Accordingly, the temporary regulations add a new provision to the regulations under section 163. Notwithstanding the general rules for the treatment of qualified residence interest (for example, the period over which certain points paid to refinance a mortgage are allocable), §1.163–11T provides that an individual taxpayer may allocate prepaid qualified mortgage insurance premiums that are treated as qualified residence interest under section 163(h)(3)(E) over the shorter of (a) the stated term of the mortgage, or (b) a period of 84 months. Instructions for calculating the portion of prepaid qualified mortgage insurance premiums that are deductible in a particular taxable year are in Publication 936, “Home Mortgage Interest Deduction.” The Treasury Department and the IRS received several comments in response to Notice 2008–15 concerning the appropri- ate reporting requirement. Some com- menters suggested that mortgage servicers be required to report all mortgage insur- ance premiums received during the tax- able year, including prepayments. Others suggested allowing mortgage servicers to report either (1) the amount of mortgage insurance premiums received, or (2) the amount disbursed during the taxable year to the issuer of the mortgage insurance pol- icy. After consideration of these comments, the Treasury Department and the IRS are adopting a rule requiring mortgage ser- vicers to report the amount of all mortgage insurance premiums, including prepaid mortgage insurance premiums, received in the calendar year. The temporary regu- lations accordingly add a new provision to the regulations under section 6050H. Sec- tion 1.6050H–3T provides that a reporting entity that receives mortgage insurance premiums of $600 or more from an in- dividual taxpayer during a calendar year shall make an information return set- ting forth the total amount received from that individual during the calendar year pursuant to the forms and instructions prescribed by the Secretary (currently re- portedinBox4ofForm1098“Mortgage Interest Statement”). Several commenters suggested clarify- ing that there are separate $600 thresholds for reporting mortgage interest under sec- tion 6050H(a) and mortgage insurance premiums under section 6050H(h). Sev- eral commenters also requested inclusion of a separate standard for penalty relief for reporting mortgage insurance premi- ums in compliance with section 6050H(h). Such guidance is unnecessary, as sec- tions 6050H(a) and 6050H(h) set forth separate $600 reporting thresholds for mortgage interest received and mortgage insurance premiums received, and the good faith standard for penalty relief in §301.6724–1(a)(2)(i) applies to the report- ing of mortgage insurance premiums. Special Analyses It has been determined that this Trea- sury decision is not asignificant regula- tory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. For appli- cability of the Regulatory Flexibility Act (5 U.S.C. chapter 5), please refer to the Special Analyses section in the preamble to the cross-referenced notice of proposed rulemaking published in this issue of the Bulletin. Pursuant to section 7805(f) of the Code, these regulations have been sub- mitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small busi- ness. Drafting Information The principal authors of these regu- lations are Angela Warren, Office of the Associate Chief Counsel (Income Tax and Accounting), and Stephen Coleman, Office of the Associate Chief Counsel (Procedure and Administration). How- ever, other personnel from the IRS and the Treasury Department participated in their development. ***** Amendments to the Regulations Accordingly, 26 CFR part 1 is amended as follows: PART 1—INCOME TAXES Paragraph 1. The authority citation for part 1 continues to read in part as follows: Authority: 26 U.S.C. 7805 * * * Par. 2. Section 1.163–11T is added to read as follows: §1.163–11T Allocation of certain prepaid qualified mortgage insurance premiums (temporary). (a)Allocation—(1)In general.Aspro- vided in section 163(h)(3)(E), premiums paid or accrued for qualified mortgage in- surance during the taxable year in connec- tion with acquisition indebtedness with re- spect to a qualified residence (as defined in section 163(h)(4)(A)) of the taxpayer shall be treated as qualified residence interest June 1, 200910452009–22 I.R.B. (as defined in section 163(h)(3)(A)). If an individual taxpayer pays such a premium that is properly allocable to a mortgage the payment of which extends to periods be- yond the close of the taxable year (prepaid premium), the taxpayer must allocate the premium to determine the amount treated as qualified residence interest for each tax- able year. The premium must be allocated ratably over the shorter of— (i) The stated term of the mortgage; or (ii) A period of 84 months, beginning with the month in which the insurance was obtained. (2)Limitation. If a mortgage is satis- fied before the end of its stated term, no de- duction as qualified residence interest shall be allowed for any amount of the premium that is allocable to periods after the mort- gage is satisfied. (b)Scope. The allocation requirement in paragraph (a) of this section applies only to mortgage insurance provided by the Federal Housing Administration or pri- vate mortgage insurance (as defined by section 2 of the Homeowners Protection Act of 1998 (12 U.S.C. 4901) as in effect on December 20, 2006). It does not ap- ply to mortgage insurance provided by the Department of Veterans Affairs or the Ru- ral Housing Service. Paragraph (a) of this section applies whether the qualified mort- gage insurance premiums are paid in cash or are financed, without regard to source. (c)Cross reference. For rules concern- ing the information reporting of premiums, including prepaid premiums, for mortgage insurance, see §1.6050H–3T. (d)Effective/applicability date.This section applies to prepaid qualified mort- gage insurance premiums described in paragraph (a) of this section paid or ac- crued on or after January 1, 2008, and on or before December 31, 2010, for mort- gage insurance provided by the Federal Housing Administration or private mort- gage insurers issued on or after January 1, 2007. (e)Expiration date. The applicability of this section expires on May 4, 2012. Par. 3. Section 1.6050H–3T is added to read as follows: §1.6050H–3T Information reporting of mortgage insurance premiums (temporary). (a)Information reporting requirements. Any person who, in the course of a trade or business receives premiums, including prepaid premiums, for mortgage insur- ance (as described in paragraph (b) of this section) from any individual aggregating $600 or more for any calendar year, shall make an information return setting forth the total amount received from that indi- vidual during the calendar year pursuant to the forms and instructions prescribed by the Secretary. (b)Scope. Paragraph (a) of this section applies to mortgage insurance provided by the Federal Housing Administration, De- partment of Veterans Affairs, or the Ru- ral Housing Service (or their successor or- ganizations), or to private mortgage insur- ance (as defined by section 2 of the Home- owners Protection Act of 1998 (12 U.S.C. 4901) as in effect on December 20, 2006). The rule stated in paragraph (a) of this sec- tion applies to the receipt of all payments of mortgage insurance premiums, by cash or financing, without regard to source. (c)Aggregation. Whether a person re- ceives $600 or more of mortgage insur- ance premiums is determined on a mort- gage-by-mortgage basis. A recipient need not aggregate mortgage insurance premi- ums received on all of the mortgages of an individual to determine whether the $600 threshold is met. Therefore, a recipient need not report mortgage insurance premi- ums of less than $600 received on a mort- gage, even though it receives a total of $600 or more of mortgage insurance pre- miums on all of the mortgages for an indi- vidual for a calendar year. (d)Cross reference. For rules concern- ing the allocation of certain prepaid qual- ified mortgage insurance premiums, see §1.163–11T of this chapter. (e)Effective/applicability date.This section applies to mortgage insurance pre- miums received on or after January 1, 2008. (f)Expiration date. The applicability of this section expires on May 4, 2012. LindaE.Stiff, Deputy Commissioner for Services and Enforcement. Approved April 23, 2009. Bernard J. Knight, Jr., Acting General Counsel of the Treasury. (Filed by the Office of the Federal Register on May 6, 2009, 8:45 a.m., and published in the issue of the Federal Register for May 7, 2009, 74 F.R. 21296) Section 6050H.—Returns Relating to Mortgage Interest Received in Trade or Business From Individuals Temporary and proposed regulations provide guid- ance on the information reporting requirements for premiums, including prepaid premiums, for mortgage insurance. See T.D. 9449, page 1044. Temporary and proposed regulations provide guid- ance on the information reporting requirements for premiums, including prepaid premiums, for mortgage insurance. See REG-107271-08, page 1051. 2009–22 I.R.B.1046June 1, 2009 Part III. Administrative, Procedural, and Miscellaneous Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates Notice 2009–45 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 corpo- rate bond monthly yield curve (and the corresponding spot segment rates), the 24-month average segment rates, and the funding transitional segment rates under § 430(h)(2). In addition, this 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. CORPORATE BOND WEIGHTED AVERAGE INTEREST RATE Sections412(b)(5)(B)(ii)and 412(l)(7)(C)(i), as amended by the Pen- sion Funding Equity Act of 2004 and by the Pension Protection Act of 2006 (PPA), provide that the interest rates used to cal- culate 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 conser- vatively in long term investment grade corporate bonds during the 4-year period ending on the last day before the beginning of the plan year. Notice 2004–34, 2004–1 C.B. 848, 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 April 2009 is 7.05 percent. Pursuant to No- tice 2004–34, the Service has determined this rate as the average of the monthly yields for the included corporate bond in- dices 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% May20096.43 5.78 6.43 YIELD CURVE AND SEGMENT RATES Generally for plan years beginning after 2007 (except for delayed effective dates for certain plans under sections 104, 105, and 106 of PPA), § 430 of the Code specifies the minimum funding require- ments that apply to single employer plans pursuant to § 412. Section 430(h)(2) spec- ifies 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 us- ing three 24-month average interest rates (“segment rates”), each of which applies to cash flows during specified periods. However, an election may be made under § 430(h)(2)(D)(ii) to use the monthly yield curve in place of the segment rates. For plan years beginning in 2008 and 2009, a transitional rule under § 430(h)(2)(G) pro- vides that the segment rates are blended with the corporate bond weighted average as specified above. An election may be made under § 430(h)(2)(G)(iv) to use the segment rates without applying the transi- tional rule. Notice 2007–81, 2007–44 I.R.B. 899, provides guidelines for determining the monthly corporate bond yield curve, the 24-month average corporate bond segment rates, and the funding transitional segment rates used to compute the target normal cost and the funding target. Pursuant to Notice 2007–81, the monthly corporate bond yield curve derived from April 2009 data is in Table I at the end of this notice. The spot first, second, and third segment rates for the month of April 2009 are, respectively, 5.12, 7.15, and 6.92. The three 24-month average corporate bond segment rates applicable for May 2009 under the election of § 430(h)(2)(G)(iv) are as follows: First Segment Second Segment Third Segment 5.33 6.686.82 June 1, 200910472009–22 I.R.B. The transitional segment rates under § 430(h)(2)(G) applicable for May 2009, taking into account the corporate bond weighted average of 6.43 stated above, are as follows: For Plan Years Beginning in First Segment Second Segment Third Segment 20086.06 6.516.56 2009 5.70 6.606.69 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- ble interest rate for a month is the annual 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 April 2009 is 3.76 percent. The Service has determined this rate as the monthly average of the daily determina- tion of yield on the 30-year Treasury bond maturing in February 2039. 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 Average 90%to 105% May20094.444.004.67 MINIMUM PRESENT VALUE SEGMENT RATES Generally for plan years beginning af- ter December 31, 2007, the applicable in- terest rates under § 417(e)(3)(D) are seg- ment rates computed without regard to a 24-month average. For plan years begin- ning in 2008 through 2011, the applica- ble interest rate is the monthly spot seg- ment rate blended with the applicable rate under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning in 2007. No- tice 2007–81 provides guidelines for de- termining the minimum present value seg- ment rates. Pursuant to that notice, the minimum present value transitional seg- ment rates determined for April 2009, tak- ing into account theApril 2009 30-year Treasury rate of 3.76 stated above, are as follows: For Plan Y ears Beginning in First Segment Second Segment Third Segment 20084.034.444.39 20094.30 5.125.02 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. 2009–22 I.R.B.1048June 1, 2009 Table I Monthly Yield Curve for April 2009 Maturity YieldMaturity YieldMaturity YieldMaturity YieldMaturity Yield 0.53.5520.5 7.19 40.5 6.89 60.5 6.80 80.56.75 1.04.0321.07.1741.0 6.89 61.06.8081.0 6.75 1.54.4721.57.1641.56.8861.56.8081.56.75 2.0 4.85 22.07.1442.06.8862.06.7982.0 6.75 2.55.1722.5 7.13 42.5 6.88 62.5 6.79 82.56.75 3.0 5.43 23.07.1143.06.8763.0 6.79 83.0 6.75 3.55.6623.5 7.10 43.5 6.87 63.5 6.79 83.56.75 4.0 5.85 24.0 7.09 44.06.8764.0 6.79 84.0 6.75 4.56.0324.57.0844.56.8664.5 6.79 84.56.75 5.0 6.20 25.0 7.07 45.0 6.86 65.0 6.79 85.06.75 5.56.3525.57.0545.5 6.86 65.5 6.78 85.5 6.74 6.06.4826.07.0446.06.8666.06.7886.06.74 6.5 6.61 26.5 7.04 46.56.8566.5 6.78 86.5 6.74 7.06.7227.07.0347.0 6.85 67.06.7887.06.74 7.56.8327.57.0247.56.8567.56.7887.56.74 8.06.9228.07.0148.0 6.85 68.06.7888.06.74 8.5 7.00 28.5 7.00 48.5 6.84 68.5 6.78 88.5 6.74 9.0 7.08 29.0 7.00 49.0 6.84 69.0 6.78 89.0 6.74 9.57.1429.5 6.99 49.56.8469.56.7789.56.74 10.0 7.19 30.0 6.98 50.0 6.8470.06.77 90.0 6.74 10.57.2430.5 6.98 50.56.8370.56.7790.56.74 11.07.2831.06.97 51.0 6.8371.06.7791.06.74 11.5 7.31 31.5 6.97 51.5 6.83 71.5 6.7791.56.74 12.07.3332.0 6.96 52.0 6.8372.06.77 92.0 6.74 12.57.3532.5 6.96 52.5 6.83 72.5 6.7792.56.74 13.07.3633.06.95 53.0 6.8273.06.77 93.0 6.73 13.57.3633.56.9553.56.8273.56.7793.56.73 14.07.3634.06.94 54.0 6.8274.06.7694.06.73 14.5 7.36 34.5 6.94 54.5 6.82 74.5 6.7694.56.73 15.07.3535.0 6.93 55.0 6.82 75.0 6.7695.06.73 15.5 7.34 35.5 6.93 55.5 6.81 75.5 6.7695.56.73 16.07.3336.0 6.92 56.0 6.8176.06.76 96.0 6.73 16.57.3236.5 6.92 56.56.8176.56.7696.56.73 17.07.3037.06.91 57.0 6.8177.06.7697.06.73 17.5 7.29 37.5 6.91 57.5 6.81 77.5 6.7697.56.73 18.07.2738.0 6.91 58.0 6.8178.06.76 98.0 6.73 18.5 7.26 38.5 6.90 58.5 6.80 78.5 6.7698.56.73 19.0 7.24 39.06.90 59.06.80 79.0 6.76 99.0 6.73 19.57.2239.5 6.90 59.56.8079.56.7599.56.73 20.07.2140.06.8960.06.8080.0 6.75 100.06.73 June 1, 200910492009–22 I.R.B. * This spot monthly yield curve repre- sents data from April 2009 only, and under the proposed regulations for § 430(h)(2), this table is for use by § 430(h)(2)(D)(ii) electing plans with valuation dates in May 2009. Until final regulations are effective, a reasonable interpretation of § 430(h)(2)(D)(ii) would permit plan sponsors to use this table in conjunc- tion with the applicable month rules of § 430(h)(2)(E). In such a case, this table could also be used for a valuation as of a date in April, June, July, or August of 2009. 26 CFR 601.602: Tax forms and instructions. (Also: Part 1, §§ 1, 223.) Rev. Proc. 2009–29 SECTION 1. PURPOSE This revenue procedure provides the 2010 inflation adjusted amounts for Health Savings Accounts (HSAs) as determined under § 223 of the Internal Revenue Code. SECTION 2. 2010 INFLATION ADJUSTED ITEMS Annual contribution limitation. For cal- endar year 2010, the annual limitation on deductions under § 223(b)(2)(A) for an in- dividual with self-only coverage under a high deductible health plan is $3,050. For calendar year 2010, the annual limitation on deductions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $6,150. High deductible health plan. For cal- endar year 2010, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,200 for self-only coverage or $2,400 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $5,950 for self-only coverage or $11,900 for family coverage. SECTION 3. EFFECTIVE DATE This revenue procedure is effective for calendar year 2010. SECTION 4. DRAFTING INFORMATION The principal author of this revenue procedure is Christina M. Glendening of the Office of Associate Chief Counsel (Income Tax & Accounting). For further information regarding§223andHSAs, contact Leslie Paul at (202) 622–6080 (not a toll-free call). For further infor- mation regarding the calculation of the inflation adjustments in this revenue pro- cedure, contact Ms. Glendening at (202) 622–4920 (not a toll-free call). 2009–22 I.R.B.1050June 1, 2009 Part IV. Items o fGeneralInterest Notice of Proposed Rulemaking by Cross-Reference to Temporary Regulations Allocation and Reporting of Mortgage Insurance Premiums REG–107271–08 AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking by cross-reference to temporary regula- tions. SUMMARY: In this issue of the Bulletin, the IRS is issuing temporary regulations relating to prepaid qualified mortgage in- surance premiums. The temporary reg- ulations reflect changes to the law made by the Tax Relief and Health Care Act of 2006 and the Mortgage Forgiveness Debt Relief Act of 2007. The temporary reg- ulations explain how to allocate prepaid qualified mortgage insurance premiums to determine the amount of the prepaid pre- mium that is treated as qualified residence interest each taxable year under section 163(h)(4)(F) of the Internal Revenue Code (Code). The temporary regulations also provide guidance to reporting entities re- ceiving premiums, including prepaid pre- miums, for mortgage insurance. The text of those temporary regulations (T.D. 9449) also serves as the text of these proposed regulations. DATES: Written or electronic comments and requests for a public hearing must be received by August 5, 2009. ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG–107271–08), room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washing- ton, DC 20044. Submissions may be hand delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG–107271–08), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC, or sent electronically via the Federal eRulemaking Portal athttp://www.regulations.gov(IRS REG–107271–08). FOR FURTHER INFORMATION CONTACT: Concerning the proposed reg- ulations, Angela Warren (202) 622–4950; concerning submission of comments or a request for a public hearing, Funmi Taylor at (202) 622–7180 (not toll-free numbers). SUPPLEMENTARY INFORMATION: Background and Explanation of Provisions Temporary regulations in this issue of the Bulletin amend the regulations under 26 CFR Part 1 relating to sections 163(h) and 6050H(h). The temporary regulations add rules relating to the proper allocation of prepaid qualified mortgage insurance premiums and provide guidance to report- ing entities receiving mortgage insurance premiums. The text of those temporary regulations also serves as the text of these proposed regulations. The preamble to the temporary regulationsexplains the amend- ments. Special Analyses It has been determine that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory as- sessment is not required. It also has been determined that section 553(b) of the Ad- ministrative Procedure Act (5 U.S.C. chap- ter 5) does not apply to these regulations. Because the regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to sec- tion 7805(f) of the Code, these regulations have been submitted to the Chief Counsel for Advocacy of the Small Business Ad- ministration for comment on its impact on small business. Comments and Requests for a Public Hearing Before these proposed regulations are adopted as final regulations, consideration will be given to any written (a signed origi- nal and eight (8) copies) or electronic com- ments that are submitted timely to the IRS. The IRS and the Treasury Department re- quest comments on the clarity of the pro- posed rules and how they can be made eas- ier to understand. All comments will be available for public inspection and copy- ing. A public hearing will be scheduled if requested in writing by any person that timely submits comments. If a public hear- ing is scheduled, notice of the date, time and place for the public hearing will be published in theFederal Register. Drafting Information The principal author of these regula- tions is Angela Warren, Office of the Asso- ciate Chief Counsel (Income Tax and Ac- counting). However, other personnel from the IRS and the Treasury Department par- ticipated in their development. ***** Proposed Amendments to the Regulations Accordingly, 26 CFR part 1 is proposed to be amended as follows: PART 1—INCOME TAXES Paragraph 1. The authority citation for part 1 continues to read in part as follows: Authority: 26 U.S.C. 7805 * * * Par. 2. Section 1.163–11 is added to read as follows: §1.163–11 Allocation of certain prepaid qualified mortgage insurance premiums. [The text of this section is the same as the text of §1.163–11T(a) through (d) pub- lished elsewhere in this issue of the Bul- letin]. Par. 3. Section 1.6050H–3 is added to read as follows: §1.6050H–3 Information reporting of mortgage insurance premiums. [The text of this section is the same as the text of §1.6050H–3T(a) through (e) published elsewhere in this issue of the Bulletin]. LindaE.Stiff, Deputy Commissioner for Services and Enforcement. June 1, 200910512009–22 I.R.B. (Filed by the Office of the Federal Register on May 6, 2009, 8:45 a.m., and published in the issue of the Federal Register for May 7, 2009, 74 F.R. 21295) Notice of Proposed Rulemaking and Notice of Public Hearing Suspension or Reduction of Safe Harbor Nonelective Contributions REG–115699–09 AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking and notice of public hearing. SUMMARY: This document contains pro- posed amendments to the regulations re- lating to certain cash or deferred arrange- ments and matching contributions under section 401(k) plans and section 403(b) plans. These regulations affect adminis- trators of, employers maintaining, partic- ipants in, and beneficiaries of certain sec- tion 401(k) plans and section 403(b) plans. DATES: Written or electronic comments must be received by August 17, 2009. Out- lines of the topics to be discussed at the public hearing scheduled for Wednesday, September 23, 2009, at 10 a.m. must be received by August 19, 2009. ADDRESSES: Send submissions to CC:PA:LPD:PR (REG–115699–09), room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washing- ton D.C. 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG–115699–09), Courier’s Desk, Internal Revenue Ser- vice, 1111 Constitution Avenue, N.W., Washington, D.C., 20224 or sent elec- tronically via the Federal eRulemaking Portal athttp://www.regulations.gov(IRS REG–115699–09). FOR FURTHER INFORMATION CONTACT: Concerning the regulations, R. Lisa Mojiri-Azad, Dana Barry or William D. Gibbs at (202) 622–6060; concerning the submission of com- ments or to request a public hearing, Richard.A.Hurst@irscounsel.treas.gov, (202) 622–7180 (not toll-free numbers). SUPPLEMENTARY INFORMATION: Paperwork Reduction Act The collection of information contained in this notice of proposed rulemaking has been submitted to the Office of Manage- ment and Budget for review in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)). Comments on the collection of information should be sent to theOffice of Management and Budget, Attn: Desk Officer for the Department of the Treasury, Office of Information and Regulatory Affairs, Washington, DC 20503, with copies to theInternal Rev- enue Service, Attn: IRS Reports Clear- ance Officer, SE:W:CAR:MP:T:T:SP; Washington, DC 20224. Comments on the collection of information should be received by July 17, 2009. Comments are specifically requested concerning: Whether the proposed collection of in- formation is necessary for the proper per- formance of the functions of the Internal Revenue Service, including whether the information will have practical utility; The accuracy of the estimated burden associated with the proposed collection of information; How the quality, utility, and clarity of the information to be collected may be en- hanced; How the burden of complying with the proposed collections of information may be minimized, including through the appli- cation of automated collection techniques or other forms of information technology; and Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of service to provide information. The collection of information in these proposed regulations is in §1.401(k)–3. The collection relates to the new supple- mental notice in the case of a reduction or suspension of safe harbor nonelective con- tributions. The likely recordkeepers are businesses or other for-profit institutions, nonprofit institutions, organizations, and state or local governments. Estimated total average annual record- keeping burden: 5,000 hours. Estimated average annual burden hours per recordkeeper: 1 hour. Estimated number of recordkeepers: 5,000. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by the Of- fice of Management and Budget. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103. Background This document contains proposed amendments to regulations under sections 401(k) and 401(m) of the Internal Revenue Code. Section 401(k)(1) provides that a profit-sharing, stock bonus, pre-ERISA money purchase, or rural cooperative plan will not fail to qualify under section 401(a) merely because it contains a qualified cash or deferred arrangement. Section 1.401(k)–1(a)(2) defines a cash or deferred arrangement (CODA) as an arrangement under which an eligible employee may make a cash or deferred election with re- spect to contributions to, or accruals or other benefits under, a plan that is intended to satisfy the requirements of section 401(a). Contributions that are made pur- suant to a cash or deferred election under a qualified CODA are commonly referred to as elective contributions. In order for a CODA to be a quali- fied CODA, it must satisfy a number of requirements. For example, contribu- tions under the CODA must satisfy either the nondiscrimination test set forth in section 401(k)(3), called the actual de- ferral percentage (ADP) test, or one of the design-based alternatives in section 401(k)(11), 401(k)(12), or 401(k)(13). Under the ADP test, the average percent- age of compensation deferred for eligible highly compensated employees (HCEs) is compared to the average percentage of compensation deferred for eligible non- highly compensated employees (NHCEs), and if certain deferral percentage limits are exceeded with respect to HCEs, corrective action must be taken. Section 401(k)(12) provides a de- sign-based safe harbor method under 2009–22 I.R.B.1052June 1, 2009 which a CODA is treated as satisfying the ADP test if the arrangement meets certain contribution and notice requirements. A plan satisfies this safe harbor method if the employer makes specified qualified matching contributions (QMACs) for all eligible NHCEs. The employer can make QMACs under a basic matching formula that provides for QMACs on behalf of each eligible NHCE equal to 100% of the employee’s elective contributions that do not exceed 3% of compensation and 50% of the employee’s elective contribu- tions that exceed 3% but do not exceed 5% of compensation. Alternatively, the employer can make QMACs under an en- hanced matching formula that provides, at each rate of elective contributions, for an aggregate amount of QMACs that is at least as generous as under the basic match- ing formula, but only if the rate of QMACs under the enhanced matching formula does not increase as the employee’s rate of elective contributions increases. In lieu of QMACs, the plan is permitted to pro- vide qualified nonelective contributions (QNECs) equal to 3% of compensation for all eligible NHCEs. In addition, notice must be provided to each eligible em- ployee, within a reasonable period before the beginning of the plan year, of the em- ployee’s rights and obligations under the plan. Section 401(k)(13), as added by sec- tion902ofthePensionProtectionAct of 2006, Public Law 109–280 (PPA ’06), provides an alternative design-based safe harbor for a CODA that provides for au- tomatic contributions at a specified level and meets certain employer contribution and notice requirements. Similar to the design-based safe harbor under section 401(k)(12), section 401(k)(13) provides a choice for an employer between satisfying a matching contribution requirement or a nonelective contribution requirement. Under the matching contribution require- ment, the employer can make matching contributions under a basic matching formula that provides for matching contri- butions on behalf of each eligible NHCE equal to 100% of the employee’s elective contributions that do not exceed 1% of compensation and 50% of the employee’s elective contributions that exceed 1% but do not exceed 6% of compensation. Alter- natively, the employer can make matching contributions under an enhanced match- ing formula that provides, at each rate of elective contributions, for an aggregate amount of matching contributions that is at least as generous as under the basic matching formula at such rate, but only if the rate of matching contributions under the enhanced matching formula does not increase as the employee’s rate of elective contributions increases. In addition, the plan must satisfy a notice requirement under section 401(k)(13) that is similar to the notice requirement under section 401(k)(12). Except as discussed elsewhere in this preamble, a plan that uses one of these safe harbor methods under section 401(k)(12) or (13) must specify, before the beginning of the plan year, whether the safe har- bor contribution will be the safe harbor nonelective contribution or the safe harbor matching contribution and is not permitted to provide that ADP testing will be used if the requirements for the safe harbor are not satisfied. Section 401(m) sets forth a nondis- crimination requirement that applies to a plan providing for matching contributions or employee contributions. Such a plan must satisfy either the nondiscrimination test set forth in section 401(m)(2), called the actual contribution percentage (ACP) test, or one of the design-based alterna- tives in section 401(m)(10), 401(m)(11), or 401(m)(12). The ACP test in section 401(m)(2) is comparable to the ADP test in section 401(k)(3). Under section 401(m)(11), a defined contribution plan is treated as satisfying the ACP test with respect to matching con- tributions if the plan satisfies the ADP safe harbor of section 401(k)(12) and certain other requirements are satisfied. Similarly, under section 401(m)(12), as added by sec- tion 902 of PPA ’06, a defined contribution plan that provides for automatic contribu- tions at a specified level is treated as meet- ing the ACP test with respect to matching contributions if the plan satisfies the ADP safe harbor of section 401(k)(13) and cer- tain other requirements are satisfied. Section 403(b) provides favorable tax treatment for the purchase of annuity con- tracts that satisfy certain requirements. Pursuant to sections 403(b)(1)(D) and 403(b)(12)(A)(i), the purchase of an an- nuity contract (other than a purchase by a church) is eligible for this favorable tax treatment only if it is part of a plan that meets the requirements of section 401(m), as if it were a qualified plan under section 401(a). Final regulations under sections 401(k) and 401(m) were published on Decem- ber 29, 2004. Sections 1.401(k)–3 and 1.401(m)–3 set forth the requirements for a safe harbor plan under sections 401(k)(12) and 401(m)(11), respectively. On Feb- ruary 24, 2009, these regulations were amended to reflect sections 401(k)(13) and 401(m)(12) (T.D. 9447, 2009–12 I.R.B. 694 [74 FR 8200]). Sections1.401(k)–3(e)(1)and 1.401(m)–3(f)(1) provide that subject to certain exceptions, a safe harbor plan must be adopted before the beginning of the plan year and be maintained throughout a full 12-month plan year. Accordingly, if, at the beginning of the plan year, a plan contains an allocation formula that in- cludes safe harbor matching or safe harbor nonelective contributions, then the plan may not be amended to revert to ADP or ACP testing for the plan year (except to the extent permitted under §§1.401(k)–3 and 1.401(m)–3). Sections1.401(k)–3(f)and 1.401(m)–3(g) permit a plan that provides for the use of the current year ADP or ACP testing method to be amended after the first day of the plan year to adopt the safe harbor method under §1.401(k)–3 or §1.401(m)–3 using safe harbor non- elective contributions, effective as of the first day of the plan year, if certain requirements are satisfied. In particular, the amendment must be adopted no later than 30 days before the last day of the plan year, and the plan must satisfy specified contingentand follow-up notice requirements. Under §§1.401(k)–3(f) and 1.401(m)–3(g), a plan satisfies the contingent notice requirement if the notice is provided before the plan year and specifies that the plan may be amended during the plan year to include the safe harbor nonelective contribution and that, if the plan is amended, a follow-up notice will be provided. A plan satisfies the follow-up notice requirement if, no later than 30 days before the last day of the plan year, each eligible employee is given a notice that states that the safe harbor nonelective contributions will be made for the plan year. A plan that provides for safe harbor matching contributions will not fail to sat- June 1, 200910532009–22 I.R.B. isfy section 401(k)(3) or section 401(m)(2) for a plan year merely because the plan is amended during the plan year to re- duce or suspend safe harbor matching contributions on future elective contribu- tions, as long as the requirements under §1.401(k)–3(g) or §1.401(m)–3(h) are met. Under these regulations: a notice must be provided to all eligible employees regarding the reduction or suspension of safe harbor matching contributions; the reduction or suspension of safe harbor matching contributions must be effective no earlier than the later of 30 days after eligible employees are provided the notice and the date the amendment is adopted; eligible employees must be given a rea- sonable opportunity prior to the reduction or suspension of safe harbor matching contributions to change their cash or de- ferred elections and, if applicable, their employee contribution elections; the plan must be amended to provide that the ap- plicable nondiscrimination tests will be satisfied for the entire plan year; and the plan must satisfy the requirements of §§1.401(k)–3 and 1.401(m)–3 (other than §§1.401(k)–3(g) and 1.401(m)–3(h)) with respect to amounts deferred through the effective date of the amendment. Sections1.401(k)–3(e)(4)and 1.401(m)–3(f)(4) provide that, if a plan terminates during a plan year, the plan will not fail to satisfy the requirements of §§1.401(k)–3(e)(1) and 1.401(m)–3(f)(1) merely because the final plan year is less than 12 months, provided that the plan satisfies the requirements of §§1.401(k)–3 and 1.401(m)–3 through the date of termi- nation and either (1) the plan would have satisfied the requirements applicable to a plan amendment to reduce or suspend safe harbor matching contributions (other than the requirement that employees have a reasonable opportunity to change their cash or deferred elections and, if appli- cable, employee contribution elections) or (2) the termination is in connection with a transaction described in section 410(b)(6)(C) or the employer incurs a sub- stantial business hardship (comparable to a substantial business hardship described in section 412(d) 1 ). Section 416 sets forth the rules for top-heavy plans. Section 416(g)(4)(H) provides that a top-heavy plan will not include a plan which consists solely of a cash or deferred arrangement that meets the requirements of section 401(k)(12) or 401(k)(13) and matching contributions with respect to which the requirements of section 401(m)(11) or 401(m)(12) are met. Explanation of Provisions The proposed regulations would amend §§1.401(k)–3 and 1.401(m)–3 to permit an employer sponsoring a safe harbor plan de- scribed in section 401(k)(12) or 401(k)(13) that incurs a substantial business hardship (comparable to a substantial business hard- shipdescribedinsection412(c))toreduce or suspend safe harbor nonelective contri- butions during a plan year. These proposed regulations would provide an employer an alternative to the option of terminating the employer’s safe harbor plan in such a situ- ation. The proposed regulations would allow for the reduction or suspension of safe har- bor nonelective contributions under rules generally comparable to the provisions re- latingtothereductionorsuspensionof safe harbor matching contributions. Under these rules, a plan that reduces or suspends safe harbor nonelective contributions will not fail to satisfy section 401(k)(3), pro- vided that: (1) all eligible employees are provided a supplemental notice of the re- duction or suspension; (2) the reduction or suspension of safe harbor nonelective contributions is effective no earlier than the later of 30 days after eligible employ- ees are provided the supplemental notice and the date the amendment is adopted; (3) eligible employees are given a reason- able opportunity (including a reasonable period after receipt of the supplemental no- tice) prior to the reduction or suspension of the safe harbor nonelective contributions to change their cash or deferred elections and, if applicable, their employee contri- bution elections; (4) the plan is amended to providethattheADPtestwillbesatisfied for the entire plan year in which the reduc- tion or suspension occurs, using the cur- rent year testing method; and (5) the plan satisfies the safe harbor nonelective con- tribution requirement with respect to safe harbor compensation paid through the ef- fective date of the amendment. The pro- posed regulations would also provide that the supplemental notice requirement is sat- isfied if each eligible employee is given a notice that explains: (1) the consequences of the amendment reducing or suspend- ing future safe harbor nonelective contri- butions; (2) the procedures for changing cash or deferred elections and, if applica- ble, employee contribution elections; and (3) the effective date of the amendment. The proposed regulations would further provide that these same rules that apply to safe harbor plans under §1.401(k)–3 also apply to safe harbor plans under §1.401(m)–3, except that the plan must be amended to provide that the ACP test will be satisfied for the entire plan year in which the reduction or suspension occurs using the current year testing method. Because the reduction or suspension of safe harbor contributions can be effective no earlier than the later of 30 days after the notice is provided to all eligible employees and the date the amendment is adopted, an employer that wants to reduce or suspend safe harbor contributions during a year could not implement this change by adopt- ing the amendment at the end of the plan year. In addition, a plan that is amended during the plan year to reduce or suspend safe harbor contributions (whether non- elective contributions or matching contri- butions) must prorate the otherwise ap- plicable compensation limit under section 401(a)(17) in accordance with the require- ments of §1.401(a)(17)–1(b)(3)(iii)(A). Furthermore, a plan that is amended to re- duce or suspend safe harbor contributions is no longer a plan described in section 401(k)(12), 401(k)(13), 401(m)(11), or 401(m)(12) for the entire plan year. Ac- cordingly, such a plan is not described in section 416(g)(4)(H) and, thus, will be subject to the top-heavy rules under sec- tion 416. Proposed Effective Date These regulations are proposed to be ef- fective for amendments adopted after May 18, 2009. Taxpayers may rely on these proposed regulations for guidance pending the issuance of final regulations. If, and to the extent, the final regulations are more restrictive than the guidance in these pro- posed regulations, those provisions of the 1 The definition of substantial business hardship in section 412(d) was relocated to become part of section 412(c) by section 111 of the Pension Protection Act of 2006, Public Law 109–280. 2009–22 I.R.B.1054June 1, 2009 final regulations will be applied without retroactive effect. Special Analyses It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory as- sessment is not required. It has been de- termined that 5 U.S.C. 533(b) of the Ad- ministrative Procedure Act (5 U.S.C. chap- ter 5) does not apply to these regulations. It is hereby certified that the collection of information in these proposed regulations will not have a significant economic im- pact on a substantial number of small en- tities. The proposed regulations impact on small businesses is as follows. A pension consultant or attorney must read the reg- ulation. He must then communicate this information to the small business owner. The small business owner must then de- cide if he wants to reduce nonelective con- tributions to its safe harbor plan. Once this decision is made, the pension consultant or attorney must draft the notice to employees and the small business must make sure that the employees receive the notice. We estimate that the cost to do these tasks is $500-$1000. If the small busi- ness owner can implement this program by July 1, 2009, he will save 1.5% of his payroll for 2009. A small business with an annual payroll of $1,000,000 can save $15,000 in 2009. Thus, adopting the pro- visions in these regulation will in almost all cases save the small business owner money. Therefore, an analysis under the Regulatory Flexibility Act (5 U.S.C. chap- ter 6) is not required. Pursuant to section 7805(f) of the Inter- nal Revenue Code, these regulations have been submitted to the Chief Counsel for Advocacy of the Small Business Admin- istration for comments on its impact on small business. Comments and Requests for Public Hearing Before these proposed regulations are adopted as final regulations, consideration will be given to any written (one signed and eight (8) copies) or electronic com- ments that are submitted timely to the IRS. The IRS and Treasury Department specif- ically request comments on the clarity of the proposed rules and how they can be made easier to understand. The current regulations, in describing the requirement for safe harbor plans that a notice be provided before the begin- ning of the plan year, do not address the possibility that safe harbor contributions may be reduced or suspended during the year. Since, under these regulations, safe harbor nonelective contributions, as well as safe harbor matching contributions, can be reduced or suspended during the plan year under certain circumstances, the IRS and Treasury are considering adding to the minimum content listing in §1.401(k)–3(d)(2)(ii), a requirement that the possibility of reduced or suspended safe harbor contributions be described in thenoticerequiredtobeprovidedbefore the beginning of the plan year (except in the case of a contingent notice de- scribed in §1.401(k)–3(f)). If adopted, the requirement that the notice describe the possibility of reduced or suspended safe harbor contributions would not apply for plan years beginning before January 1, 2010. The IRS and Treasury specifi- cally request comments on whether the additional content requirement should be added to the regulations. A public hearing has been scheduled for September 23, 2009, at 10 a.m. in the IRS Auditorium, Internal Revenue Build- ing, 1111 Constitution Avenue, N.W., Washington, DC. Due to building security procedures, visitors must enter at the Con- stitution Avenue entrance. In addition, all visitors must presentphoto identification to enter the building. Because of access restrictions, visitors will not be admitted beyond the immediate entrance area more than 30 minutes before the hearing starts. For information about having your name placed on the building access list to attend thehearing,seetheFORFURTHERIN- FORMATION CONTACT section of this preamble. Persons who wish to present oral com- ments at the hearing must submit written or electronic comments and submit an out- line of the topics to be discussed and the amount of time to be devoted to each topic (a signed original and eight (8) copies) by August 19, 2009. A period of 10 minutes will be allotted to each person for making comments. An agenda showing the scheduling of the speakers will be prepared after the deadline for receivingoutlines has passed. Copies of the agenda will be available free of charge at the hearing. Drafting Info rmation The principal authors of these regu- lations are Dana Barry, William Gibbs, and Lisa Mojiri-Azad, Office of Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities). How- ever, other personnel from the IRS and Treasury Department participated in the development of these regulations. ***** Proposed Amendments to the Regulations Accordingly, 26 CFR part 1 is proposed to be amended as follows: Part 1—INCOME TAXES Paragraph 1. The authority citation for part 1 is amended to read as follows: Authority: 26 U.S.C. 7805 * * * Section 1.401(k)–3 is also issued under 26 U.S.C. 401(m)(9) Par. 2. Section 1.401(k)–0 is amended by revising the entries for §1.401(k)–3(g), (g)(1) and (g)(2) to read as follows: §1.4 01(k)–0 Table of Contents. ***** §1.401(k)–3 Safe harbor requirements. ***** (g) Permissible reduction or suspension of safe harbor contributions. (1) General rule. (i) Matching contributions. (ii) Nonelective contributions. (2) Supplemental notice. ***** Par. 3. Section 1.401(k)–3 is amended by: 1. Revising paragraph (e)(4)(ii). 2. Revising paragraph (g). The revisions read as follows: §1.401(k)–3 Safe harbor requirements. ***** (e) * * * (4) * * * (ii) The plan termination is in connec- tion with a transaction described in section June 1, 200910552009–22 I.R.B. 410(b)(6)(C) or the employer incurs a sub- stantial business hardship comparable to a substantial business hardship described in section 412(c). ***** (g)Permissible reduction or suspension of safe harbor contributions—(1)General rule—(i)Matching contributions.Aplan that provides for safe harbor matching con- tributions intended to satisfy the require- mentsofparagraph(c)ofthissectionfora plan year will not fail to satisfy the require- ments of section 401(k)(3) merely because the plan is amended during the plan year to reduce or suspend safe harbor matching contributions on future elective contribu- tions (and, if applicable, employee contri- butions) provided that— (A) All eligible employees are provided the supplemental notice in accordance with paragraph (g)(2) of this section; (B) The reduction or suspension of safe harbor matching contributions is effective no earlier than the later of 30 days after eligible employees are provided the sup- plemental notice described in paragraph (g)(2) of this section and the date the amendment is adopted; (C) Eligible employees are given a rea- sonable opportunity (including a reason- able period after receipt of the supplemen- tal notice) prior to the reduction or suspen- sion of safe harbor matching contributions to change their cash or deferred elections and, if applicable, their employee contri- bution elections; (D) The plan is amended to provide that the ADP test will be satisfied for the entire plan year in which the reduction or suspen- sion occurs using the current year testing method described in §1.401(k)–2(a)(2)(ii); and (E) The plan satisfies the requirements of this section (other than this paragraph (g)) with respect to amounts deferred through the effective date of the amend- ment. (ii)Nonelective contributions.Aplan that provides for safe harbor nonelective contributions intended to satisfy the re- quirements of paragraph (b) of this sec- tion for the plan year will not fail to sat- isfy the requirements of section 401(k)(3) merely because the plan is amended dur- ing the plan year to reduce or suspend safe harbor nonelective contributions provided that— (A) The employer incurs a substantial business hardship (comparable to a sub- stantial business hardship described in sec- tion 412(c)); (B) The amendment is adopted after May 18, 2009; (C) All eligible employees are provided the supplemental notice in accordance with paragraph (g)(2) of this section; (D) The reduction or suspension of safe harbor nonelective contributions is effective no earlier than the later of 30 days after eligible employees are provided the supplemental notice described in para- graph (g)(2) of this section and the date the amendment is adopted; (E) Eligible employees are given a rea- sonable opportunity (including a reason- able period after receipt of the supplemen- tal notice) prior to the reduction or suspen- sion of nonelective contributions to change their cash or deferred elections and, if ap- plicable, their employee contribution elec- tions; (F) The plan is amended to provide that the ADP test will be satisfied for the entire plan year in which the reduction or suspen- sion occurs using thecurrent year testing method described in §1.401(k)–2(a)(2)(ii); and (G) The plan satisfies the requirements of this section (other than this paragraph (g)) with respect to safe harbor compensa- tion paid through the effective date of the amendment. (2)Supplemental notice. The supple- mental notice requirement of this para- graph (g)(2) is satisfied if each eligible em- ployee is given a notice (in writing or such other form as prescribed by the Commis- sioner) that explains— (i) The consequences of the amendment which reduces or suspends future safe har- bor contributions; (ii) The procedures for changing their cash or deferred elections and, if applica- ble, their employee contribution elections; and (iii) The effective date of the amend- ment. Par. 4. Section 1.401(m)–0 is amended by revising the entries for §1.401(m)–3(h), (h)(1) and (h)(2) in their entirety to read as follows: §1.401(m)–0 Table of Contents. ***** §1.401(m)–3 Safe Harbor Requirements. ***** (h) Permissible reduction or suspension of safe harbor contributions. (1) General rule. (i) Matching contributions. (ii) Nonelective contributions. (2) Supplemental notice. ***** Par. 5. Section 1.401(m)–3 is amended by: 1. Revising paragraph (f)(4)(ii). 2. Revising paragraph (h). The revisions read as follows: §1.401(m)–3 Safe harbor requirements. ***** (f) * * * (4) * * * (ii) The plan termination is in connec- tion with a transaction described in section 410(b)(6)(C) or the employer incurs a sub- stantial business hardship, comparable to a substantial business hardship described in section 412(c). ***** (h)Permissible reduction or suspension of safe harbor contributions—(1)General rule—(i)Matching contributions.Aplan that provides for safe harbor matching con- tributions intended to satisfy the require- ments of paragraph (c) of this section for a plan year will not fail to satisfy the re- quirements of section 401(m)(2) merely because the plan is amended during the plan year to reduce or suspend safe harbor matching contributions on future elective deferrals and, if applicable, employee con- tributions provided that— (A) All eligible employees are provided the supplementalnotice in accordance with paragraph (h)(2) of this section; (B) The reduction or suspension of safe harbor matching contributions is effective no earlier than the later of 30 days after eligible employees are provided the sup- plemental notice described in paragraph (h)(2) of this section and the date the amendment is adopted; (C) Eligible employees are given a rea- sonable opportunity (including a reason- able period after receipt of the supplemen- tal notice) prior to the reduction or suspen- sion of safe harbor matching contributions to change their cash or deferred elections 2009–22 I.R.B.1056June 1, 2009 and, if applicable, their employee contri- bution elections; (D) The plan is amended to provide that the ACP test will be satisfied for the entire plan year in which the re- duction or suspension occurs using the current year testing method described in §1.401(m)–2(a)(2)(ii); and (E) The plan satisfies the requirements of this section (other than this paragraph (h)) with respect to amounts deferred through the effective date of the amend- ment. (ii)Nonelective contributions.Aplan that provides for safe harbor nonelective contributions intended to satisfy the re- quirements of paragraph (b) of this section will not fail to satisfy the requirements of section 401(m)(2) for the plan year merely because the plan is amended during the plan year to reduce or suspend safe harbor nonelective contributions provided that— (A) The employer incurs a substantial business hardship (comparable to a sub- stantial business hardship described in sec- tion 412(c)); (B) The amendment is adopted after May 18, 2009; (C) All eligible employees are provided the supplemental notice in accordance with paragraph (h)(2) of this section; (D) The reduction or suspension of safe harbor nonelective contributions is effective no earlier than the later of 30 days after eligible employees are provided the supplemental notice described in para- graph (h)(2) of this section and the date the amendment is adopted; (E) Eligible employees are given a rea- sonable opportunity (including a reason- able period after receipt of the supplemen- tal notice) prior to the reduction or suspen- sion of nonelective contributions to change their cash or deferred elections and, if ap- plicable, their employee contribution elec- tions; (F) The plan is amended to provide that the ACP test will be satisfied for the entire plan year in which the re- duction or suspension occurs using the current year testing method described in §1.401(m)–2(a)(2)(ii); and (G) The plan satisfies the requirements of this section (other than this paragraph (h)) with respect to safe harbor compensa- tion paid through the effective date of the amendment. (2)Supplemental notice. The supple- mental notice requirement of this para- graph (h)(2) is satisfied if each eligible em- ployee is given a notice that satisfies the requirements of §1.401(k)–3(g)(2). LindaE.Stiff, Deputy Commissioner for Services and Enforcement. (Filed by the Office of the Federal Register on May 15, 2009, 8:45 a.m., and published in the issue of the Federal Register for May 18, 2009, 74 F.R. 23134) June 1, 200910572009–22 I.R.B. 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. 2009–22 I.R.B.iJune 1, 2009 Numerical Finding List 1 Bulletins 2009–1 through 2009–22 Announcements: 2009-1, 2009-1 I.R.B.242 2009-2, 2009-5 I.R.B.424 2009-3, 2009-6 I.R.B.459 2009-4, 2009-8 I.R.B.597 2009-5, 2009-8 I.R.B.569 2009-6, 2009-9 I.R.B.643 2009-7, 2009-10 I.R.B.663 2009-8, 2009-8 I.R.B.598 2009-9, 2009-9 I.R.B.643 2009-10, 2009-9 I.R.B.644 2009-11, 2009-10 I.R.B.663 2009-12, 2009-11 I.R.B.686 2009-13, 2009-11 I.R.B.686 2009-14, 2009-11 I.R.B.687 2009-15, 2009-11 I.R.B.687 2009-16, 2009-11 I.R.B.691 2009-17, 2009-12 I.R.B.714 2009-18, 2009-12 I.R.B.714 2009-19, 2009-12 I.R.B.715 2009-20, 2009-12 I.R.B.716 2009-21, 2009-13 I.R.B.730 2009-22, 2009-13 I.R.B.731 2009-23, 2009-13 I.R.B.731 2009-24, 2009-13 I.R.B.732 2009-25, 2009-14 I.R.B.755 2009-26, 2009-14 I.R.B.755 2009-27, 2009-14 I.R.B.756 2009-28, 2009-15 I.R.B.760 2009-29, 2009-14 I.R.B.757 2009-30, 2009-15 I.R.B.794 2009-31, 2009-15 I.R.B.798 2009-32, 2009-15 I.R.B.799 2009-33, 2009-15 I.R.B.799 2009-34, 2009-18 I.R.B.916 2009-35, 2009-17 I.R.B.892 2009-36, 2009-18 I.R.B.927 2009-37, 2009-19 I.R.B.940 2009-38, 2009-19 I.R.B.940 2009-39, 2009-20 I.R.B.1022 2009-40, 2009-20 I.R.B.1023 2009-41, 2009-20 I.R.B.1026 2009-42, 2009-20 I.R.B.1027 2009-45, 2009-21 I.R.B.1040 2009-46, 2009-21 I.R.B.1040 Notices: 2009-1, 2009-2 I.R.B.250 2009-2, 2009-4 I.R.B.344 2009-3, 2009-2 I.R.B.250 2009-4, 2009-2 I.R.B.251 2009-5, 2009-3 I.R.B.309 Notices— Continued: 2009-6, 2009-3 I.R.B.311 2009-7, 2009-3 I.R.B.312 2009-8, 2009-4 I.R.B.347 2009-9, 2009-5 I.R.B.419 2009-10, 2009-5 I.R.B.419 2009-11, 2009-5 I.R.B.420 2009-12, 2009-6 I.R.B.446 2009-13, 2009-6 I.R.B.447 2009-14, 2009-7 I.R.B.516 2009-15, 2009-6 I.R.B.449 2009-16, 2009-8 I.R.B.572 2009-17, 2009-8 I.R.B.575 2009-18, 2009-10 I.R.B.648 2009-19, 2009-10 I.R.B.660 2009-20, 2009-12 I.R.B.711 2009-21, 2009-13 I.R.B.724 2009-22, 2009-14 I.R.B.741 2009-23, 2009-16 I.R.B.802 2009-24, 2009-16 I.R.B.817 2009-25, 2009-15 I.R.B.758 2009-26, 2009-16 I.R.B.833 2009-27, 2009-16 I.R.B.838 2009-29, 2009-16 I.R.B.849 2009-30, 2009-16 I.R.B.852 2009-31, 2009-16 I.R.B.856 2009-32, 2009-17 I.R.B.865 2009-33, 2009-17 I.R.B.865 2009-34, 2009-17 I.R.B.876 2009-35, 2009-17 I.R.B.876 2009-36, 2009-17 I.R.B.883 2009-37, 2009-18 I.R.B.898 2009-38, 2009-18 I.R.B.901 2009-39, 2009-18 I.R.B.902 2009-40, 2009-19 I.R.B.931 2009-41, 2009-19 I.R.B.933 2009-42, 2009-20 I.R.B.1011 2009-43, 2009-21 I.R.B.1037 2009-44, 2009-21 I.R.B.1037 2009-45, 2009-22 I.R.B.1047 Proposed Regulations: REG-144615-02, 2009-7 I.R.B.561 REG-144689-04, 2009-18 I.R.B.906 REG-148568-04, 2009-5 I.R.B.421 REG-160872-04, 2009-4 I.R.B.358 REG-158747-06, 2009-4 I.R.B.362 REG-116699-07, 2009-13 I.R.B.727 REG-138326-07, 2009-9 I.R.B.638 REG-143686-07, 2009-8 I.R.B.579 REG-150670-07, 2009-4 I.R.B.378 REG-113462-08, 2009-4 I.R.B.379 REG-147636-08, 2009-9 I.R.B.641 REG-150066-08, 2009-5 I.R.B.423 REG-107271-08, 2009-22 I.R.B.1051 REG-107845-08, 2009-20 I.R.B.1014 Proposed Regulations— Continued: REG-119532-08, 2009-20 I.R.B.1017 REG-115699-09, 2009-22 I.R.B.1052 Revenue Procedures: 2009-1, 2009-1 I.R.B.1 2009-2, 2009-1 I.R.B.87 2009-3, 2009-1 I.R.B.107 2009-4, 2009-1 I.R.B.118 2009-5, 2009-1 I.R.B.161 2009-6, 2009-1 I.R.B.189 2009-7, 2009-1 I.R.B.226 2009-8, 2009-1 I.R.B.229 2009-9, 2009-2 I.R.B.256 2009-10, 2009-2 I.R.B.267 2009-11, 2009-3 I.R.B.313 2009-12, 2009-3 I.R.B.321 2009-13, 2009-3 I.R.B.323 2009-14, 2009-3 I.R.B.324 2009-15, 2009-4 I.R.B.356 2009-16, 2009-6 I.R.B.449 2009-17, 2009-7 I.R.B.517 2009-18, 2009-11 I.R.B.670 2009-19, 2009-14 I.R.B.747 2009-20, 2009-14 I.R.B.749 2009-21, 2009-16 I.R.B.860 2009-22, 2009-16 I.R.B.862 2009-23, 2009-17 I.R.B.884 2009-24, 2009-17 I.R.B.885 2009-26, 2009-19 I.R.B.935 2009-27, 2009-19 I.R.B.938 2009-28, 2009-20 I.R.B.1011 2009-29, 2009-22 I.R.B.1050 Revenue Rulings: 2009-1, 2009-2 I.R.B.248 2009-2, 2009-2 I.R.B.245 2009-3, 2009-5 I.R.B.382 2009-4, 2009-5 I.R.B.408 2009-5, 2009-6 I.R.B.432 2009-6, 2009-12 I.R.B.694 2009-7, 2009-13 I.R.B.717 2009-8, 2009-10 I.R.B.645 2009-9, 2009-14 I.R.B.735 2009-10, 2009-14 I.R.B.738 2009-11, 2009-18 I.R.B.896 2009-12, 2009-19 I.R.B.928 2009-13, 2009-21 I.R.B.1029 2009-14, 2009-21 I.R.B.1031 2009-15, 2009-21 I.R.B.1035 Tax Conventions: 2009-5, 2009-8 I.R.B.569 Treasury Decisions: 9434, 2009-4 I.R.B.339 1 A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2008–27 through 2008–52 is in Internal Revenue Bulletin 2008–52, dated December 29, 2008. June 1, 2009ii2009–22 I.R.B. Treasury Decisions— Continued: 9435, 2009-4 I.R.B.333 9436, 2009-3 I.R.B.268 9437, 2009-4 I.R.B.341 9438, 2009-5 I.R.B.387 9439, 2009-5 I.R.B.416 9440, 2009-5 I.R.B.409 9441, 2009-7 I.R.B.460 9442, 2009-6 I.R.B.434 9443, 2009-8 I.R.B.564 9444, 2009-9 I.R.B.603 9445, 2009-9 I.R.B.635 9446, 2009-9 I.R.B.607 9447, 2009-12 I.R.B.694 9448, 2009-20 I.R.B.942 9449, 2009-22 I.R.B.1044 2009–22 I.R.B.iiiJune 1, 2009 Finding List of Current Actions on Previously Published Items 1 Bulletins 2009–1 through 2009–22 Notices: 99-35 Obsoleted by Notice 2009-15, 2009-6 I.R.B.449 2001-55 Modified by Notice 2009-1, 2009-2 I.R.B.250 2002-27 Modified by Notice 2009-9, 2009-5 I.R.B.419 2005-74 Obsoleted by T.D. 9446, 2009-9 I.R.B.607 2007-26 Modified by Notice 2009-15, 2009-6 I.R.B.449 2007-52 Clarified, modified, and amplified by Notice 2009-24, 2009-16 I.R.B.817 2007-53 Clarified, modified, and ampilfied by Notice 2009-23, 2009-16 I.R.B.802 2007-54 Obsoleted by T.D. 9436, 2009-3 I.R.B.268 2008-11 Obsoleted by T.D. 9436, 2009-3 I.R.B.268 2008-12 Obsoleted by T.D. 9436, 2009-3 I.R.B.268 Rev. Proc. 2009-11, 2009-3 I.R.B.313 2008-13 Obsoleted by T.D. 9436, 2009-3 I.R.B.268 List of forms modified and superseded by Rev. Proc. 2009-11, 2009-3 I.R.B.313 Modified and clarified by Notice 2009-5, 2009-3 I.R.B.309 2008-46 Obsoleted by T.D. 9436, 2009-3 I.R.B.268 Rev. Proc. 2009-11, 2009-3 I.R.B.313 2008-100 Amplified and superseded by Notice 2009-14, 2009-7 I.R.B.516 Notices— Continued: 2008-110 Modified by Notice 2009-34, 2009-17 I.R.B.876 2009-31 Modified by Notice 2009-42, 2009-20 I.R.B.1011 Proposed Regulations: REG-144615-02 Corrected by Ann. 2009-19, 2009-12 I.R.B.715 REG-149519-03 Withdrawn by Ann. 2009-4, 2009-8 I.R.B.597 REG-148326-05 Corrected by Ann. 2009-14, 2009-11 I.R.B.687 REG-158747-06 Hearing scheduled by Ann. 2009-29, 2009-14 I.R.B.757 REG-143686-07 Corrected by Ann. 2009-40, 2009-20 I.R.B.1023 REG-150066-08 Corrected by Ann. 2009-31, 2009-15 I.R.B.798 Hearing cancelled by Ann. 2009-36, 2009-18 I.R.B.927 Revenue Procedures: 2007-17 Superseded by Rev. Proc. 2009-14, 2009-3 I.R.B.324 2007-66 Modified and superseded by Rev. Proc. 2009-21, 2009-16 I.R.B.860 2007-68 Superseded by Rev. Proc. 2009-17, 2009-7 I.R.B.517 2007-71 Modified by Notice 2009-3, 2009-2 I.R.B.250 2008-1 Superseded by Rev. Proc. 2009-1, 2009-1 I.R.B.1 2008-2 Superseded by Rev. Proc. 2009-2, 2009-1 I.R.B.87 2008-3 Superseded by Rev. Proc. 2009-3, 2009-1 I.R.B.107 Revenue Procedures— Continued: 2008-4 Superseded by Rev. Proc. 2009-4, 2009-1 I.R.B.118 2008-5 Superseded by Rev. Proc. 2009-5, 2009-1 I.R.B.161 2008-6 Superseded by Rev. Proc. 2009-6, 2009-1 I.R.B.189 2008-7 Superseded by Rev. Proc. 2009-7, 2009-1 I.R.B.226 2008-8 Superseded by Rev. Proc. 2009-8, 2009-1 I.R.B.229 2008-9 Superseded by Rev. Proc. 2009-9, 2009-2 I.R.B.256 2008-17 Obsoleted in part by Rev. Proc. 2009-18, 2009-11 I.R.B.670 2008-19 Obsoleted in part by Rev. Proc. 2009-27, 2009-19 I.R.B.938 2008-61 Superseded by Rev. Proc. 2009-3, 2009-1 I.R.B.107 2008-65 Amplified and supplemented by Rev. Proc. 2009-16, 2009-6 I.R.B.449 2008-66 Modified and superseded by Rev. Proc. 2009-21, 2009-16 I.R.B.860 2008-68 Amplified and superseded by Rev. Proc. 2009-15, 2009-4 I.R.B.356 2009-19 Modified and superseded by Rev. Proc. 2009-26, 2009-19 I.R.B.935 Revenue Rulings: 65-286 Obsoleted by T.D. 9435, 2009-4 I.R.B.333 71-381 Obsoleted in part by Rev. Rul. 2009-9, 2009-14 I.R.B.735 76-54 Obsoleted by T.D. 9435, 2009-4 I.R.B.333 1 A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2008–27 through 2008–52 is in Internal Revenue Bulletin 2008–52, dated December 29, 2008. June 1, 2009iv2009–22 I.R.B. Revenue Rulings— Continued: 92-19 Supplemented by Rev. Rul. 2009-3, 2009-5 I.R.B.382 2008-19 Modified by Rev. Rul. 2009-3, 2009-5 I.R.B.382 Treasury Decisions: 9394 Corrected by Ann. 2009-42, 2009-20 I.R.B.1027 9436 Corrected by Ann. 2009-15, 2009-11 I.R.B.687 9438 Corrected by Ann. 2009-30, 2009-15 I.R.B.794 9439 Corrected by Ann. 2009-12, 2009-11 I.R.B.686 9441 Corrected by Ann. 2009-18, 2009-12 I.R.B.714 Ann. 2009-39, 2009-20 I.R.B.1022 9442 Corrected by Ann. 2009-13, 2009-11 I.R.B.686 Ann. 2009-20, 2009-12 I.R.B.716 9446 Corrected by Ann. 2009-23, 2009-13 I.R.B.731 Ann. 2009-45, 2009-21 I.R.B.1040 2009–22 I.R.B.vJune 1, 2009 June 1, 20092009–22 I.R.B. 2009–22 I.R.B.June 1, 2009 June 1, 20092009–22 I.R.B. INTERNAL REVENUE BULLETIN The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue Bulletin is sold on a yearly subscription basis by the Superintendent of Documents. Current subscribers are notified by the Superin- tendent of Documents when their subscriptions must be renewed. 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